WorldCom Exec Urged Not To TalkAug 2, 2002 | USA Today
An executive at the center of WorldCom's accounting scandal tried twice in less than two years to discourage a colleague from asking Arthur Andersen about WorldCom's books, congressional investigators said Monday.
Former WorldCom controller David Myers, who was charged Aug. 1 with fraud for allegedly helping to hide billions in expenses, told WorldCom executive Steven Brabbs, based in London, not to talk "for any reason" to audit firm Andersen. "I do not want to hear an excuse, just stop," Myers wrote in a Jan. 22 e-mail. "Don't make me ask you again."
The e-mail messages were released Monday by the House Financial Services Committee, which is investigating WorldCom. It says the exchange speaks to the climate inside a company that has revealed more than $7 billion in improper accounting and that last month filed the biggest bankruptcy case in history. "It shows you the opposition that (Brabbs) ran into and the intimidation he encountered," panel spokeswoman Peggy Peterson says.
In another e-mail released weeks ago, Brabbs said he was rebuked for questioning WorldCom's accounting in 2000. He says he questioned an entry that reduced expenses by $33.6 million. He was told that ex-CFO Scott Sullivan, also charged with fraud, ordered the entry. Brabbs said Myers wasn't happy that he discussed it with Andersen, which was replaced as WorldCom's auditor in May.
Brabbs' recent query focused on asset impairment charges that reflect the rise and fall in value of company assets. WorldCom plans an earnings restatement for 2000, 2001 and early 2002. Asset write-offs could erase $51 billion in good will and prompt other charges.
Myers' attorney couldn't be reached. WorldCom, which has been charged with fraud by the Securities and Exchange Commission, says it is cooperating with all probes. The House committee is also investigating possible conflicts of interest between WorldCom and investment bank Salomon Smith Barney.