For Cynthia Cooper, speaking up came at the price of 50,000 jobs and an $11 billion hit to the credibility of America’s second largest company, WorldCom, now known as MCI. Cooper told the story of how she discovered the false recording of capital expenditures — and got herself named one of Time’s “Persons of the Year” in 2002 — last night at the Statler.
Cooper, vice president of internal audit at WorldCom, along with a team of internal auditors including fellow speaker Glyn Smith, discovered a gaping hole in the corporation’s financial record-keeping.
Their investigation was triggered by a nervous executive within the company who reportedly had $400 million removed from his account. The finding that operating costs, which should have been paid in full at the end of each year, were being stretched out and going to be paid in the future is what lead to the “massive storm that sank the telecommunications industry,” said Prof. Dana Radcliff, ethics.
Cooper described the impact of her own actions, saying she discovered “the largest fraud in corporate history,” and killed a “behemoth.”
Trying to advise the students in the audience, Cooper and Smith together explained that they “found [themselves] at a crossroads and there was only one path to take, and [they would] take it again.” “The aftermath was the … difficult part,” Cooper went on to say. Her town of Clinton, Miss. has felt the impact of the plummeting stock prices as half of the 100,000 former WorldCom workers are now unemployed.
In the office, things are not the same. All of the paper shredders have been removed. Coffee machines have been designated a waste of money, and there is little sense of intra-office camaraderie. As for Cooper, she is known as the “whistleblower.” When asked how she felt about the title, Cooper said that she found it “not-so-flattering.”
Cooper has been receiving attention from the FBI, the SEC and high-level government officials. At one point, Cooper was even told that she and Smith would be court marshaled if they did not leave Clinton and arrive in New York City at 10 a.m. the next morning.
In explaining how he resisted the pressure, Smith explained his “three S’s of decision making — scrutinize, socialize and sanitize.”
The first question to ask oneself in scrutinizing a question is “Is this against the law?”
“If the answer to that one’s yes, then you can put your pen down, put your head on the desk and stop,” said Smith.
Given Smith’s standard, steadfastly holding to his findings was an easy judgment call. Smith also suggested to future business leaders the ‘Wall Street Journal’ test.
“You have to ask yourself, ‘if this appears on the cover of the Wall Street Journal tomorrow, would that be okay with me?'”
Cooper and Smith’s work makes for “a great lecture,” said Kara Christian JGSM ’04.
Cooper, however, felt that since the investigation, the “company [has been] floating at sea without a captain.”
Archived article by Erica Fink
Sun Staff Writer