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American Morning

'Real People and Their Money:' Interview with Lenette Crumpler, Jacob Goodwin

Aired October 03, 2002 - 07:46   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


DARYN KAGAN, CNN ANCHOR: We want to talk financial storm. And this morning, our series, "Real People and Their Money," continues, fighting back against corporate greed.
Congress heard testimony this week from Lenette Crumpler. She is a woman who lost $86,000 when the stock price of Global Crossing plunged. That was in her 401(k).

Also testifying before this House committee was company chairman Gary Winnick. He denied any wrongdoing. He also, though, made a stunning promise to Crumpler and other employees victimized by the 401(k) meltdown.

(BEGIN VIDEO CLIP)

GARY WINNICK, GLOBAL CROSSING CHAIRMAN: I am personally, along with my family, going to guarantee $25 million to the people who have lost their money in their 401(k) plan.

(END VIDEO CLIP)

KAGAN: And joining us now from Rochester, New York is Lenette Crumpler. Also with us here in New York is Jacob Goodwin. He was laid off last summer by WorldCom.

Good morning to both of you.

JACOB GOODWIN, EX-WORLDCOM EMPLOYEE: Hi.

LENETTE CRUMPLER, 401(K) ACCOUNT COLLAPSED: Good morning.

KAGAN: Lenette, I'd like to start with you. You still have your job, but you're 401(k) basically has been wiped out by the plunging stock price.

CRUMPLER: That is correct.

KAGAN: And you got to tell your story before Congress.

CRUMPLER: I sure did. I did.

KAGAN: And you kind of let them have it, didn't you? You let them know what a single mom working, scrapping and saving just to put some money away into a 401(k), what it feels like to have that wiped out. CRUMPLER: Yes, I did. I really let them have it. It really hurt me. I am devastated by it. I don't know what my future will be as an elderly person. I really feel that it's a very good possibility that I am going to be living in poverty in my senior years, and I have worked so hard for that not to happen. It's an almost impossible feat what I accomplished, saving $86,000, being a single mom, raising two children and never asking the system for one penny.

KAGAN: And so, there you were, sitting before Congress, telling your story, and basically right next to you, Gary Winnick, a multimillionaire, making this promise, saying he knows that people have been cheated in this. And so, he personally is going to write this check for $25 million to help restore 401(k)s like yours. What do you think about that promise?

CRUMPLER: I had left the hearing room when that statement was made, and I found out about it much later when I was en route to Rochester. And I was stunned by it when I heard it. I don't know if...

KAGAN: Is it worth anything? Does it mean anything to you?

CRUMPLER: I'm going to give him a plus that it shows that maybe this man does have a heart. However, it's only pennies on the dollar.

KAGAN: It doesn't really -- it doesn't come anywhere close to making up your 86,000.

CRUMPLER: No, it doesn't, not at all.

KAGAN: Jacob, I want to bring you in here. You are kind of the opposite of Lenette. You no longer have your job. You have been laid off, but your 401(k) is basically in good shape.

GOODWIN: Well, the 401(k) has basically been removed. I didn't have very much money in WorldCom stock in the 401(k), and I took that out before WorldCom crumbled. So, yes, I am in pretty good shape financially as it relates to the 401(k).

KAGAN: But your gripe right now with WorldCom and the bankruptcy situation is the severance package that you and thousands of other employees ended up with, not the one you were promised, but the one you ended up with because of bankruptcy.

GOODWIN: Well, don't say we ended up with it, because luckily, we have now turned that around. Basically, about 4,000 people and I were laid off on June 28 by WorldCom. We were initially promised our full severance, which in many cases was $5,000 or $10,000 or $15,000 based on their term in their position. But then, we were told after the fact that because of the bankruptcy proceeding, WorldCom would only pay $4,650.

A group that I helped organize called SWEEP (ph) and the AFL-CIO and some other organizations of employees fought back, and basically convinced WorldCom that it was in their best interest to go back into bankruptcy court and to ask for permission to pay 100 percent of all of the severance and all of the bonuses and all of the sales commissions that they owe to the laid-off employees.

And now, I just want to make sure -- I claim that as a victory for all of us.

KAGAN: Well, tell us the result of that court action.

GOODWIN: Well, the result was that on October 1, which I guess was Tuesday, the judge in bankruptcy court agreed with the WorldCom request and said, yes, you should and now can pay 100 percent of all of those payments to the laid-off employees.

And I just call upon WorldCom to do it swiftly, to do it accurately, and not to pay these people, many of whom are in serious financial hardship, to pay them on a bi-weekly basis, as they currently plan to do. They have now spent about three or four months without paying their employees.

They've now been told by the court, you have the permission to pay, and I just think WorldCom should step up and make everybody whole immediately. There is no reason to drag it out.

And the other point I would make is that before they actually make the payments, I call upon WorldCom to let the employees know what they're planning to give them, particularly in the form of sales commissions, because there oftentimes were disputes and inconsistencies. And I think the employees should know what they're getting and agree to it before WorldCom settles the matter.

KAGAN: Well...

GOODWIN: But they should move quickly.

KAGAN: I commend both of you for citing that. So often, in these stories, we just hear about the thousands of employees who lost their job. We don't know the individual stories, let alone the stories of people who are just darn angry and they're just not going to take it, fighting back.

Lenette Crumpler, Jacob Goodwin, thanks for joining us this morning, and we wish you well.

GOODWIN: Thanks very much.

CRUMPLER: Thank you.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com.





Crumpler, Jacob Goodwin>


Aired October 3, 2002 - 07:46   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
DARYN KAGAN, CNN ANCHOR: We want to talk financial storm. And this morning, our series, "Real People and Their Money," continues, fighting back against corporate greed.
Congress heard testimony this week from Lenette Crumpler. She is a woman who lost $86,000 when the stock price of Global Crossing plunged. That was in her 401(k).

Also testifying before this House committee was company chairman Gary Winnick. He denied any wrongdoing. He also, though, made a stunning promise to Crumpler and other employees victimized by the 401(k) meltdown.

(BEGIN VIDEO CLIP)

GARY WINNICK, GLOBAL CROSSING CHAIRMAN: I am personally, along with my family, going to guarantee $25 million to the people who have lost their money in their 401(k) plan.

(END VIDEO CLIP)

KAGAN: And joining us now from Rochester, New York is Lenette Crumpler. Also with us here in New York is Jacob Goodwin. He was laid off last summer by WorldCom.

Good morning to both of you.

JACOB GOODWIN, EX-WORLDCOM EMPLOYEE: Hi.

LENETTE CRUMPLER, 401(K) ACCOUNT COLLAPSED: Good morning.

KAGAN: Lenette, I'd like to start with you. You still have your job, but you're 401(k) basically has been wiped out by the plunging stock price.

CRUMPLER: That is correct.

KAGAN: And you got to tell your story before Congress.

CRUMPLER: I sure did. I did.

KAGAN: And you kind of let them have it, didn't you? You let them know what a single mom working, scrapping and saving just to put some money away into a 401(k), what it feels like to have that wiped out. CRUMPLER: Yes, I did. I really let them have it. It really hurt me. I am devastated by it. I don't know what my future will be as an elderly person. I really feel that it's a very good possibility that I am going to be living in poverty in my senior years, and I have worked so hard for that not to happen. It's an almost impossible feat what I accomplished, saving $86,000, being a single mom, raising two children and never asking the system for one penny.

KAGAN: And so, there you were, sitting before Congress, telling your story, and basically right next to you, Gary Winnick, a multimillionaire, making this promise, saying he knows that people have been cheated in this. And so, he personally is going to write this check for $25 million to help restore 401(k)s like yours. What do you think about that promise?

CRUMPLER: I had left the hearing room when that statement was made, and I found out about it much later when I was en route to Rochester. And I was stunned by it when I heard it. I don't know if...

KAGAN: Is it worth anything? Does it mean anything to you?

CRUMPLER: I'm going to give him a plus that it shows that maybe this man does have a heart. However, it's only pennies on the dollar.

KAGAN: It doesn't really -- it doesn't come anywhere close to making up your 86,000.

CRUMPLER: No, it doesn't, not at all.

KAGAN: Jacob, I want to bring you in here. You are kind of the opposite of Lenette. You no longer have your job. You have been laid off, but your 401(k) is basically in good shape.

GOODWIN: Well, the 401(k) has basically been removed. I didn't have very much money in WorldCom stock in the 401(k), and I took that out before WorldCom crumbled. So, yes, I am in pretty good shape financially as it relates to the 401(k).

KAGAN: But your gripe right now with WorldCom and the bankruptcy situation is the severance package that you and thousands of other employees ended up with, not the one you were promised, but the one you ended up with because of bankruptcy.

GOODWIN: Well, don't say we ended up with it, because luckily, we have now turned that around. Basically, about 4,000 people and I were laid off on June 28 by WorldCom. We were initially promised our full severance, which in many cases was $5,000 or $10,000 or $15,000 based on their term in their position. But then, we were told after the fact that because of the bankruptcy proceeding, WorldCom would only pay $4,650.

A group that I helped organize called SWEEP (ph) and the AFL-CIO and some other organizations of employees fought back, and basically convinced WorldCom that it was in their best interest to go back into bankruptcy court and to ask for permission to pay 100 percent of all of the severance and all of the bonuses and all of the sales commissions that they owe to the laid-off employees.

And now, I just want to make sure -- I claim that as a victory for all of us.

KAGAN: Well, tell us the result of that court action.

GOODWIN: Well, the result was that on October 1, which I guess was Tuesday, the judge in bankruptcy court agreed with the WorldCom request and said, yes, you should and now can pay 100 percent of all of those payments to the laid-off employees.

And I just call upon WorldCom to do it swiftly, to do it accurately, and not to pay these people, many of whom are in serious financial hardship, to pay them on a bi-weekly basis, as they currently plan to do. They have now spent about three or four months without paying their employees.

They've now been told by the court, you have the permission to pay, and I just think WorldCom should step up and make everybody whole immediately. There is no reason to drag it out.

And the other point I would make is that before they actually make the payments, I call upon WorldCom to let the employees know what they're planning to give them, particularly in the form of sales commissions, because there oftentimes were disputes and inconsistencies. And I think the employees should know what they're getting and agree to it before WorldCom settles the matter.

KAGAN: Well...

GOODWIN: But they should move quickly.

KAGAN: I commend both of you for citing that. So often, in these stories, we just hear about the thousands of employees who lost their job. We don't know the individual stories, let alone the stories of people who are just darn angry and they're just not going to take it, fighting back.

Lenette Crumpler, Jacob Goodwin, thanks for joining us this morning, and we wish you well.

GOODWIN: Thanks very much.

CRUMPLER: Thank you.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com.





Crumpler, Jacob Goodwin>