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MCI Officers Quit After WorldCom Revelations

Jun 11, 2003 | www.ft.com

Two senior officers at MCI, formerly known as WorldCom, resigned on Tuesday in the wake of two damning reports on WorldCom's $9bn accounting fraud and its subsequent collapse.

MCI on Tuesday night announced the resignations of Susan Mayer, senior vice president and treasurer, and Michael Salsbury, executive vice president and general counsel.

A recent court filing showed that Ms Mayer signed loan agreements and asserted the company had sufficient cash just weeks before it filed for the world's largest corporate bankruptcy.

On Monday, two reports into WorldCom's collapse said that senior executives orchestrated a massive fraud that went unchallenged across the company for years.

Ms Mayer served under Bernie Ebbers former chief executive. The reports on Monday indicated Mr Ebbers may have known of the fraud and it is still unclear whether the revelations will lead to criminal charges being filed against Mr Ebbers.

Ms Mayer asserted in June 2002 in a statement related to a credit agreement application, that WorldCom had "plenty of cash on hand." The company revealed the first details of the fraud just a week later and filed for Chapter 11 bankruptcy the following month with just $200m cash and debts of more than $40bn.

MCI declined to comment on Tuesday night.

Last year, Ms Mayer was sued by 22 banks that gave WorldCom a $2.65bn credit line in 2001. The banks contended that she misrepresented the company's financial position when she signed the loan agreements.

One of the two reports filed this week, by former U.S. Attorney General Richard hornburgh, outlined how Ms Mayer and top executives knew about WorldCom's true financial health while preparing loan documents for the banks.


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