WASHINGTON, July 8 (UPI) -- By T.K.Maloy, UPI Deputy Business Editor
WASHINGTON, July 8 (UPI) -- WorldCom Inc. former CEO Bernard Ebbers, along with both former and current company officials appeared before a congressional panel Monday investigating the company's massive earnings misstatement of nearly $4 billion, with Ebbers refusing to testify, invoking the Fifth Amendment to the Constitution.
The hearing came as the company is battling bankruptcy and federal investigations.
The House Financial Services Committee, chaired by Rep. Michael Oxley, R-Oh, also heard from WorldCom's former chief financial officer Scott Sullivan, who was fired recently after the earnings inflation came to light, current CEO John Sidgmore, chairman of the board Bert Roberts and Salomon Smith Barney telecommunications stock analysts Jack Grubman, who had highly touted the company's stock.
Sullivan also pleaded the Fifth.
Tktktk Oxley, Sidgmore quote.
On June 25, WorldCom stunned Wall Street and Washington with the announcement it had overstated earnings by $3.8 billion, which prompted the Securities and Exchange Commission to file civil fraud charges against the telecom giant.
The SEC's legal maneuver was followed by the Justice Department launching its own investigation and plans by at least two congressional committees to hold hearings after the Fourth of July holiday recess. At issue is WorldCom's booking of operational expenses on the capital accounts side of the company balance sheet for 2001 and the first quarter of 2002, which had the effect of massively inflating cash flow and earnings.
Tktktk Oxley or Ebbers quote.
WorldCom, the nation's No. 2 long distance telephone and data services company, carries about half of all e-mail in the world and 70 percent of all e-mail messages sent in the United States.
