WorldCom whistleblowers speak in ethics/leadership series at Johnson School

By Linda Myers

Cynthia Cooper and Glyn Smith were part of an internal team that blew the whistle in 2002 on massive fraudulent accounting practices at WorldCom, the telecommunications giant. The two will give a talk at Cornell, "Navigating the Storm: Lessons from WorldCom," Thursday, April 22, at 6 p.m. in Cornell's Statler Auditorium.

The talk, which is free and open to the public, is sponsored by the Johnson Graduate School of Management and is part of the school's Ethics and Leadership Series, which is supported by a Leadership Initiatives Grant from Citigroup. The series is being coordinated by Dana Radcliffe, a visiting assistant professor at the Johnson School for the past four years, who teaches a course on ethics and leadership.

"The story of Cynthia Cooper and Glyn Smith is truly a profile in courage -- not to mention integrity and tenacity," said Radcliffe. "As they defied orders to stop, their secret investigation brought to light monumental deception at WorldCom, whose rapid growth in the 1990s made its stock the most widely held in the country."

As vice president of internal audit at WorldCom, Cooper was the first to spot accounting irregularities that led to the scandal. Smith served on Cooper's investigative team. The company was found to have inflated its income figures by as much as $11 billion. Shareholders lost billions as a result, soon after the news broke. Following an investigation, and an obstruction of justice conviction of Andersen, the firm's former auditor, WorldCom was heavily fined by the U.S. Securities and Exchange Commission and compelled to change its practices and operate under stricter scrutiny. It threw out its top leadership -- many of them indicted for fraud -- filed for bankruptcy, reorganized and is now doing business as MCI, a firm it had acquired in the late 1990s. Cooper, who today holds the same internal audit executive post at the renamed company, was one of Time magazine's "Persons of the Year" in 2002 for her role in helping to uncover what is now considered to be the largest accounting fraud in U.S. corporate history. Smith is a director of MCI's internal audit department.

Radcliffe, whose students are meeting with Cooper and Smith as well as others in the ethics series, commented, "Through these talks, our students are being exposed to the perspectives of individuals who have a special -- and sometimes hard-won -- understanding of the ethical issues that confront business decision-makers.

The next public speaker in the series is Buzz McCoy, former managing director at Morgan Stanley and author of the classic Harvard Business Review article "The Parable of the Sadhu," a frequently anthologized and discussed article in business ethics. His talk, which takes place April 29 from 4:30 to 6 p.m. in B09 Sage Hall, is also part of the Roy H. Park Distinguished Speaker series at the school.