Tuesday, August 27, 2002

WorldCom controller tried to silence concerns




The Associated Press

        WASHINGTON — The former controller for bankrupt WorldCom Inc., charged with improperly concealing billions in company expenses, tried to silence a colleague who raised concerns about accounting, company e-mails indicate.

        David Myers sent a harsh warning to Steven Brabbs, who managed the company's European and Asian accounts, according to e-mails released Monday by the House Financial Services Committee. The panel is investigating WorldCom.

        “Do not have any more meetings with AA for any reason,” Myers wrote to Brabbs in January, referring to accounting firm Arthur Andersenen. “I do not want to hear an excuse just stop. ... Don't make me ask you again.”

        Brabbs had contacted Andersen about an improper $33 million reduction of expenses in WorldCom's international division in the spring of 2000.

        In an e-mail to another WorldCom employee, Myers referred to Brabbs' dealings with Andersen, saying, “Not that I was looking for another reason to have him executed.”

        Peggy Peterson, a spokeswoman for the House committee, said that while no action was taken against Brabbs, the e-mails show “the opposition and intimidation he ran into from David Myers when he tried to raise accounting issues.”

        The committee requested the e-mails from WorldCom as part of its investigation.

        Myers and former WorldCom chief financial officer Scott Sullivan were arrested Aug. 1 and released on bail.

        Sullivan is accused of directing Myers to falsify the company's balance sheet by about $3.8 billion. That enabled WorldCom to continue reporting profits when it was losing money.

        The two could get up to 65 years in prison if convicted on charges of securities fraud, conspiracy and filing false statements with the Securities and Exchange Commission. However, federal sentencing guidelines call for 10 years or less.

        WorldCom, which owns MCI, the nation's second-largest long-distance company, filed for Chapter 11 bankruptcy July 21 after disclosing its accounting problems. It was the biggest such filing in U.S. history.

        On Aug. 8, WorldCom said it uncovered another $3.3 billion in improper accounting, bringing the total to about $7.1 billion.

       



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