How brave are you? Are you brave enough to stand up for what you know is right even when what is right is not what is popular? Would you have the stones to confront your employer after you discovered inappropriate business practices, even if your employer was an aggressive, multi-billion dollar telecommunications company? Cynthia Cooper had the stones. She’s the woman who blew the whistle in 2000 and ultimately brought down MCI/WorldCom for fraudulent accounting. Extraordinary Circumstances: The Journey of a Corporate Whistleblower is her story in her own words.
A Mississippi native and lifelong Southerner, Cooper was already making her family proud: the first to go to college; getting an undergraduate degree in Accounting from Mississippi State, a Master’s in Accounting at the University of Alabama at Tuscaloosa and passing the CPA exam. Her first job was as an auditor for Price Waterhouse in Atlanta; after a stint at another prominent public accounting firm and then with a private client, she moved back to Mississippi in the early 1990s and, after some time, got a position at the company that will become WorldCom in just a few years. She quickly moved up the corporate ladder, adding to her credentials and building the Internal Audit department for the company.
Meanwhile, WorldCom was growing like crazy during this time. During its heyday, the company employed around 100,000 people, a good number of them in employment-sparse Mississippi. Lots of people owned a lot of stock in WorldCom; lots of WorldCom employees placed the bulk of their savings into the company’s retirement plan; and the WorldCom executives made oodles of money. Cooper says that when she started there in 1996 annual revenues were around $1.5 billion; in 2000, annual revenues “[were] tracking toward $40 billion.” Unfortunately for all involved, this was also when the trouble started. The government nixed the WorldCom/Sprint merger, the stock price took a tumble and Cynthia Cooper, in a seemingly routine internal audit investigation into the company’s capital expenditures, found a trail of numbers that led her and her team to discover approximately $3.8 billion worth of fraud, covered by revenue inflation and the underreporting of line costs.
WorldCom’s CFO, Scott Sullivan, and layers of management below him threw as many roadblocks in Cooper’s way as they could: refusing to cooperate with the internal audit, withholding documents, intimidation. Supportive family fortunately surrounded Cooper and she hired a good team of lawyers to protect herself. Finally, in late 2002, succumbing to the massive investigation initiated by Cooper and then taken over by multiple agencies (the FBI, the Justice Department, the SEC, a congressional committee), WorldCom filed for bankruptcy. Its stock price had fallen to $0.83 from a high of $64. However, as Cooper notes, “[n]either the fraud nor the discovery of the fraud caused the downfall of WorldCom … Deregulation, Internet mania, conflicts of interest, delusions of quick riches, and low interest rates created the perfect storm.” She was just there as the ship went down.
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