Ebbers Linked To Over $4M In Farm SubsidiesNov 11, 2002 | USA Today
Former WorldCom CEO Bernie Ebbers, under increasing fire for the $408 million in personal loans he got from the company, also harvested millions in farm subsidies from U.S. taxpayers.
Three farms owned in part by Ebbers or linked to him got more than $4 million in U.S. Department of Agriculture aid from at least 1998 through 2001, say USDA records obtained by the Environmental Working Group (EWG).
Recipients, on average, got about $36,000 from 1996 through 2001, the non-profit says.
The subsidies aren't illegal. They are guaranteed for certain crops, or are spurred by price crashes or disasters â€” no matter the wealth of the farm owners. Media mogul Ted Turner, basketball star Scottie Pippen, Charles Schwab and former Enron chief Kenneth Lay have received them.
"It's not illegal. It's outrageous," says EWG President Ken Cook.
Sen. Byron Dorgan, D-N.D., has pushed for limitations on payments to wealthy individuals and large farms, but most of his efforts fell short this year.
Ebbers could not be reached. His attorney didn't respond to a request for comment.
Although Ebbers was No. 174 on Forbes' list of the 400 richest Americans in 1999, his fortune has cratered. His WorldCom shares, valued at about $286 million in December, are nearly worthless now that WorldCom has filed for Chapter 11 bankruptcy protection.
What's more, WorldCom is in the process of seizing some of his assets, many of which were pledged as collateral for the loans. His farms include:
Angelina Plantation. The 21,000-acre property in Monterey, La., got about $3.9 million in aid since 1998. Ebbers and his brother, John Ebbers, have owned it since early 1998, according to Farm Service Agency records. It produces wheat, rice, oats, corn, sorghum, cotton and soybeans.
In 2001, Angelina Plantation got almost $1.4 million in aid. That ranked No. 24 out of nearly 1.9 million recipients. USDA records show the farm has nearly 20 "other producers" on it, but it is unclear how much of a cut they get from subsidies. Calls to Angelina Plantation were not returned.
Pine Ridge Farm. This Mississippi farm got nearly $220,000 in aid since 1996. Ebbers is shown as an official of the farm in a 1997 state filing. The USDA aid was sent to the Brookhaven, Miss., address of Ebbers' brother, John, who has a farming background.
Pine Ridge received funds for wheat, sorghum, cotton, corn and livestock. Calls to Pine Ridge Farm were not returned.
Joshua Timber. It got $38,670 from 1996 through 2001, mostly in conservation funds. It's unclear if Ebbers was the owner for all of those years.
Joshua Timber filed its articles of incorporation with the Mississippi Secretary of State in 1996. Its Mississippi post office box on file with the USDA has been used in state filings by Bernie Ebbers and Joshua Holdings, which is helping to secure his WorldCom loans.
Joshua Holdings is the parent of Joshua Timberlands, which paid $400 million in 1999 for 460,000 acres in Alabama, Tennessee and Mississippi. Joshua Timberlands is cited in a shareholder lawsuit against Ebbers and others. Joshua Timber could not be reached.
In July, WorldCom filed the biggest-ever bankruptcy case after disclosing accounting misdeeds that have grown to $9 billion.
Ebbers faces scrutiny because he was CEO when the alleged fraud occurred and because of questions about his loans.
A recent bankruptcy court report questioned whether all of the loans were properly approved by the WorldCom board. Also, there are questions about how all of the money was used.
The compensation committee that approved Ebbers' loans, at the time, said they were in the best interests of shareholders. The premise for that was the concern that, if Ebbers sold shares to cover other debts, the price of WorldCom's stock would fall.
But more than $27 million was used by Ebbers for other personal reasons, the report alleges.