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WorldCom Chief Invokes Fifth Amendment Right at Hearing
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| Melvin Dick
testifies as Bernard Ebbers sits nearby |
WASHINGTON
, July 9 (IslamOnline & News Agencies) - Former WorldCom chief
executive Bernie Ebbers invoked his constitutional right against
self-incrimination Monday, July 8, at a congressional hearing into
accounting irregularities at the telecom giant.
But
Ebbers, reading a brief statement to the House Financial Services
Committee, said he believed his conduct would be exonerated, Agence
France-Presse (AFP) reported.
“When
all of the activities at WorldCom are fully aired ... I believe that
no one will conclude that I engaged in any criminal or fraudulent
conduct during my tenure at WorldCom,” he said at the hearing into
the massive $3.8 billion profit restatement at WorldCom.
WorldCom
disclosed last month that it improperly disguised expenses as profits,
CNN reported.
Former
WorldCom chief financial officer Scott Sullivan also invoked his Fifth
Amendment right, which allows witnesses to decline to give testimony
on the grounds that they may incriminate themselves.
Ebbers,
who headed WorldCom for 17 years before being forced to resign earlier
this year, said he opted to refuse to answer questions on the advice
of his lawyer,
Washington
attorney Reid Weingarten.
“Although
I would like more than you know to answer the questions you and your
colleagues have on WorldCom, I have been instructed by my counsel not
to testify based on my Fifth Amendment constitutional rights,” he
said.
“After
careful consideration, I have decided to follow my counsel’s
instructions even though I do not believe I have anything to hide in
these or any other proceedings.”
Ebbers
said one reason he would decline to answer questions is that “the
investigations appear to be open-ended ... [and] details of [the
probes] have not been provided to me.”
He
added, “I have not been advised of the specific conduct of mine that
has been called into question.”
Ebbers
came under scrutiny earlier this year because of the $400 million in
loans he received from the company while he was CEO.
He
has not commented publicly on his role in the accounting affair,
although WorldCom’s new CEO, John Sidgemore, who has blamed the
company’s former management for the accounting problems, said that
Ebbers has enough private capital to repay the loans.
In
prepared testimony Sidgmore said, “WorldCom uncovered this problem
internally…The kind of initiative demonstrated by our internal audit
group is to be applauded and will continue to be encouraged,” news
agencies reported.
WorldCom
Chairman Bert Roberts called the accounting improprieties “an
outrage to me,” and said auditor Arthur Andersen was responsible.
“To my mind, the failure of our outside auditors to uncover them is
inconceivable,” he said.
Arthur
Andersen is also involved in accounting irregularities with other
clients, including Enron.
Ebbers’
use of the Fifth Amendment to avoid to testifying to Congress follows
similar moves by former Enron Corp CEO Ken Lay and former Enron CFO
Andrew Fastow.
The
lawmakers had wanted to question Sullivan - who signed off all of
WorldCom's financial statements as its CFO - about WorldCom’s
accounting practices.
Sullivan
was dismissed by WorldCom’s board of directors a day before its
profit restatement on June 25.
WorldCom,
whose interests include No. 2 long-distance telephone company MCI, is
the latest major corporation to face allegations of executive
wrongdoing and accounting irregularities, reports new agencies.
U.S.
President George W. Bush is proposing tougher penalties - including
jail time - for corporate officials who lie on financial statements,
an administration official said Monday.
Rep.
Michael Oxley, R-Ohio, House committee chairman, said that of all the
companies in the recent wave of corporate scandals, “none has yet
shown the audacity to commit fraud on the scale that has been alleged
here.”
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