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WorldCom's CEO unaware of woes — witness

/ Source: The Associated Press

The former chairman of WorldCom Inc. testified Thursday that finance chief Scott Sullivan told him in 2002 that chief executive Bernard Ebbers did not know about the accounting problems at the company.

Bert Roberts said he questioned Sullivan on June 20, 2002, as WorldCom’s massive accounting fraud was beginning to come to light.

“I asked Scott if Bernie knew,” Roberts said. “And Scott’s answer to me was that Bernie did not know of the journal entries.”

Roberts, who held the honorary title of chairman of the board at the time, testified as a defense witness at Ebbers’ federal fraud trial.

Sullivan testified that Ebbers was aware of the fraud and that he repeatedly told the CEO he thought the accounting was improper.

Earlier Thursday, the woman credited with blowing the whistle on the fraud, Cynthia Cooper, said Sullivan flew into a rage when she questioned him about accounting in April 2002.

She said Sullivan was furious that she had taken some questions to the Arthur Andersen firm, WorldCom’s outside auditor, and not to internal officials.

“He started screaming at me that ’This is all your fault,”’ Cooper testified. “Just went into a tirade.” She said she was afraid she would lose her job.

Ebbers, 63, is accused of fraud, conspiracy and making seven false filings to the Securities and Exchange Commission. The charges carry up to 85 years in prison.

WorldCom was forced into bankruptcy in the summer of 2002 when the fraud came to light. It has since re-emerged under the name MCI Inc., which is being bought by Verizon Communications for $6.7 billion in cash and stock.