WORLDCOM Reports detail officials' tactics

The reports say WorldCom's chairman knew about financial gimmicks.
McLEAN, Va. (AP) -- The record collapse of WorldCom was marked by imperious top executives who browbeat underlings for questioning their authority, according to two reports with an insider's look into the corporate culture that fueled an $11 billion accounting scandal.
In one case investigators cited, accounting executive Buford Yates warned an underling who questioned the company's books to not show auditors the numbers or "I'll throw you out the [expletive] window."
The outlines of WorldCom's financial wrongdoing have been known for a year, but the reports released Monday -- exceeding more than 500 pages -- offered some of the most explicit details yet.
WorldCom's accounting scandal led to the largest bankruptcy filing in U.S. history last July.
Portions of one of the reports emerged last week, revealing that former Chairman Bernard Ebbers had been in meetings in which company officials discussed ways to artificially inflate revenue.
Knowledge
The report, produced by lawyer William McLucas at the request of the company's new board, faulted Ebbers for fostering a poisonous corporate culture and said he was "aware, at a minimum, that WorldCom was meeting revenue expectations through financial gimmickry."
Ebbers' lawyer, Reid Weingarten, said despite the thorough investigation, "the best the investigators can do is nitpick about the process and substance of isolated business decisions." He said the conclusion that Ebbers must have known about the wrongdoing makes a leap in logic that would be insufficient for a criminal case.
A message left for Sullivan's attorney, Irv Nathan, after business hours Monday was not immediately returned.
The McLucas report offered searing accounts about how ex-chief financial officer Scott Sullivan and other key finance executives cooked WorldCom's books to hide that the real numbers were falling short of Wall Street's expectations.
A voicemail Sullivan left for Ebbers on June 19, 2001, more than a year before WorldCom acknowledged its accounting fraud, described monthly revenue reports as "getting worse and worse. ... copy that you and I have already has accounting fluff in it ... all one-time stuff or junk."
A second report released Monday, prepared by former Attorney General Richard Thornburgh for a bankruptcy judge in New York, describes a corporate culture dominated by Ebbers and Sullivan, "with virtually no checks or restraints placed on their actions by the board of directors or other management."
Sullivan has been charged with fraud in federal court; Ebbers has not been charged. Yates and three other ex-WorldCom executives have pleaded guilty and are helping prosecutors.