September 26, 2006
Mike Stepanovich, 661/654-2456, firstname.lastname@example.org,
or Jaclyn Loveless, 661/654-2138, email@example.com
Cynthia Cooper's life ambition wasn't to destroy a corporate giant. In fact, she was a loyal and dedicated employee of WorldCom, Inc., vice president of internal auditing.
But she was and is the sort of person to whom ethics are important. And she knew that what was going on at WorldCom back in 2002 was not right. Her report to WorldCom's board of directors in June 2002 detailing WorldCom's fraudulent accounting practices uncovered the largest accounting fraud in history $11 billion to date and brought down what was then the 25th largest company in America.
Cooper will share her story and the ethical considerations that prompted her to blow the whistle on WorldCom during the Kegley Institute of Ethics' fall lecture at California State University, Bakersfield, titled, "WorldCom Warnings: What Went Wrong and Corporate Governance Lessons Learned." The lecture, which is free and open to the public, is scheduled on Thursday, Oct. 12, at 7 p.m. in the Dore Theater on the CSUB campus.
"Cynthia Cooper's story is remarkable, not only because of its magnitude, but also because of her courage," said Christopher Meyers, CSUB philosophy professor and director of The Kegley Institute of Ethics. "She brings a rare wisdom, based on direct experience, of the ethical corruption that can occur in major corporations and of corruption's many harmful ramifications."
The lecture is sponsored by the Bakersfield accounting firms of Barbich Longcrier Hooper & King, Brown Armstrong, and Daniells Phillips Vaughan & Bock; also sponsoring are San Joaquin Valley Bank, and the Greater Bakersfield Chamber of Commerce.
A certified public accountant, Cooper landed a job at WorldCom in 1994 as director of internal audits. The company had moved its headquarters to her hometown of Clinton, Miss. "I loved it," she told Time magazine writer Amanda Ripley in a story titled "The Night Detective," published in December 2002. "It was a very exciting place to be. We were moving and shaking and acquiring companies."
Eight years later, however, it was not as exciting. The telecommunications industry had plenty of competition, and corporate earnings had gone slack. As so often happens, it was a fluke that Cooper found out about the creative accounting going on inside WorldCom: a colleague alerted her that the books might be cooked.
That led her and her team on a weeks-long investigation that uncovered a scheme so fraudulent that WorldCom no longer exists as a brand, corporate officers are in prison, and the largest public pension fund, CalPERS, is suing to recover some of the millions it lost in WorldCom's collapse.
In an address earlier this year at California Polytechnic State University, San Luis Obispo, Cooper told her audience that she was no different than them, and that she was simply doing the right thing. "I am every person sitting in this audience today," she said. "We all face ethical decisions every day. It's the small decisions that matter. No one wakes up wanting to be a criminal.
You have to ask yourself, Does what I am going to do go against my values? Would I be comfortable with my parents or my professors reading about my decision in the newspaper?'"
What has been the fallout from Cooper's revelations?
- She was named one of Time magazine's Persons of the Year in 2002. She has also started her own firm, Cynthia Cooper Consulting, which specializes in training in internal auditing, controls, governance and ethics. She is also writing a book about her experiences.
- WorldCom's chief financial officer, Scott Sullivan, once the golden boy among CFOs, is serving a five-year prison sentence.
- Company founder Bernard Ebbers is to report to federal authorities today (Sept. 26) to begin serving his 25-year sentence after exhausting his appeals.
- WorldCom is now known as MCI Inc., ironically one of the companies it purchased before its bankruptcy.
For more information about the lecture or the Kegley Institute of Ethics, please call (661) 654-2555, or visit www.csub.edu/kie.