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WorldCom Whistleblower Will Not Testify


July 9, 2002 (The Daily Telegraph London) The whistleblower in the $3.8 billion WorldCom accounting scandal has been excused from testifying in front of a US Congressional committee.



Cynthia Cooper, the vice-president for internal auditing who first noticed the problems in the telecommunications company's accounts, was due to take the stand on Monday.

She was dropped from the witness list along with Max Bobbitt, WorldCom audit committee chairman, after the Congressional committee "became concerned that testimony from these two individuals could potentially compromise other inquiries".

The Securities and Exchange Commission and the Department of Justice are looking into the scandal at the Mississippi-based company.

The SEC has filed a writ accusing the company of widespread fraud and preventing the company from destroying documents. A provisional date for the SEC case to be heard has been set for March 31 next year.

In the meantime, US District Judge Jed Rakoff has ordered WorldCom not to make any payment over $100,000 to any current or former employee or any other large payment that is not contractually required.

Ms Cooper, a 37-year-old auditor, is said to have been outside the company's inner circle and often a target for former chief executive Bernie Ebber's confrontational management style. The mother of two has been described as tough and hard-working.

Only a month after the departure of Mr Ebbers, Ms Cooper revealed the hole in WorldCom's accounts. Earlier this week it was revealed that US Federal prosecutors are edging towards making criminal charges in the WorldCom case, after securing the co-operation of Ms Cooper.

She is in talks with the US Justice Department and is understood to be disputing the company's version of events.

Congress has subpoenaed David Myers, the senior vice-president and controller of WorldCom, the chief executive John Sidgmore, chairman Bert Roberts, Salomon Smith Barney telecoms analyst Jack Grubman and Melvin Dick, the former senior partner at Andersen -- WorldCom's former auditors.

-- Malcolm Moore

(C) 2002 The Daily Telegraph London. via ProQuest Information and Learning Company; All Rights Reserved

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