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WorldCom lawyers: Ebbers aware of practices
Associated Press
Date: Thursday Jul. 11, 2002 10:33 PM ET
WASHINGTON WorldCom's former chief executive was aware that hundreds of millions of dollars were shifted as part of nearly $4 billion in accounting irregularities, company lawyers have told a House of Representatives investigative panel.
The telecommunications company's founder and former CEO, Bernard Ebbers, invoked his Fifth Amendment right against self-incrimination at a congressional hearing Monday and refused to answer questions, citing ongoing investigations by the Justice Department and the Securities and Exchange Commission. The SEC has filed civil fraud charges against WorldCom, one of the latest major corporations to face allegations of executive wrongdoing and accounting dodges, driving down public confidence in business and the stock market.
Attorneys for WorldCom have told investigators with the House energy and commerce committee that "Bernie was aware that hundreds of millions of dollars had been moved," committee spokesman Ken Johnson said Thursday.
The lawyers said this information came to them from Scott Sullivan, WorldCom's former chief financial officer, who also refused to testify on Monday.
"This is the first evidence that we've seen that the muddy little footprints may lead back to Bernie Ebbers' doorstep," Johnson said.
"Clearly there's evidence that some people at WorldCom knew someone was cooking the books."
The Edmonton-born Ebbers, in an interview with lawyers conducting an internal investigation for WorldCom, denied Sullivan's assertion that he was aware of the transactions, Johnson noted.
When he invoked his constitutional privilege before the House financial services committee, Ebbers said: "I do not believe I have anything to hide."
When all the facts are known, he said, "I believe that no one will conclude that I engaged in any criminal or fraudulent conduct."
The energy and commerce committee has been investigating WorldCom's massive misstatement since the company disclosed last month that it disguised $3.9 billion of expenses as capital expenditures to appear more profitable.
Johnson said the committee received five boxes of documents from WorldCom on Thursday, the deadline set by the panel in its request for records - including those related to a WorldCom internal audit and minutes of the company's board and audit committee.
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