On the Firing Line

Melvin Dick, former Andersen audit partner for Worldcom, testified in today’s Congressional hearings on C-SPAN that Worldcom’s financial statements were “management’s responsibility” and that information “was not provided to me” re: the $3.8 billion of capitalized costs that did not — but should have — hit earnings.Congressmen were incredulous, and lambasted Dick. There seemed to be genuine anger in the room, not the usual political grandstanding.

Dick’s answers came across as weak and feeble. He probably would have been better off taking the 5th along with Bernard Ebbers and Scott Sullivan, Worldcom’s former CEO and CFO.

Even Jack Grubman, at one time a celebrated telecom analyst, was nervous and defensive, especially when asked point blank, “did Worldcom executives lie to you?”

Grubman was speechless for several seconds, and then gave a semi-coherent reply, with little conviction.

Read more.

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