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American Morning
Minding Your Business: Shedding Light on WorldCom's Ways
Aired November 05, 2002 - 08:47 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.
JACK CAFFERTY, CNN ANCHOR: Could it be that the problems at WorldCom are worse than we thought from the first time we heard about the problems there? Andy Serwer is "Minding Our Business." He joins us now from New York City. WorldCom, what was it a $4 billion-plus debacle already, and now you say it might be worse than that?
ANDY SERWER, "FORTUNE" MAGAZINE: It's just hard to imagine that it could be worse, Jack, but it is. A new report out, blasting WorldCom, talking about a culture of greed, shedding new light on all the various intrigues here. Former U.S. Attorney General Dick Thornberg (ph) talking about wrongdoing, mismanagement, incompetence. He called it a trifecta, Jack, a smorgasbord, all kinds of stuff, connections to Solomon Smith Barney, more nefarious than he thought, bigger write-offs coming. The audit committee not having its act together.
This is what really got me, Jack, the fact that Bernie Ebbers had a $1 billion loan package from the company. I don't know, Jack, have you ever heard of a single human being getting a billion dollars in loans from anybody? Not a company, but a person.
CAFFERTY: No, I never have.
SERWER: Have you ever gotten a loan that big?
CAFFERTY: Are you kidding? the banks wouldn't loan me $50 I don't think. A billion dollars? And a lot of times they forgive these loans. The board of directors says, no, you don't have to pay it back.
SERWER: Yes, it's just amazing.
I want to also turn to the latest stuff going on in Washington today, some really interesting stuff with regard to William Webster, the head of that oversight board, suggesting that he may step down, because he was sued yesterday. A lawsuit saying that he made false and misleading statements. You know, Jack, this guy, the wags on wall street say, well, he's 78 years old, he doesn't know anything about accounting, but at least he's squeaky clean. Remember when they were saying that about William Webster.
CAFFERTY: Yes. Maybe not.
SERWER: Well, it doesn't look like he's necessarily so squeaky clean. And Harvey Pitt today, by the way, canceled a speech in New York, and Chuck Schumer asked him to step down, too, so. CAFFERTY: Yes, he's just gotten in one fix after another, and Ed Markey, the Democratic congressman of Massachusetts had a funny line about Harvey Pitt. He said he's violating the first rule of holes, which is, if you are in one, stop digging.
SERWER: I think his problems will soon be over, if you catch my drift, in a couple of days.
CAFFERTY: According to "The Los Angeles Times" yesterday, it might be a done deal. Andy, good to see you. I'll to you a little later. Andy Serwer, editor at large, "Fortune" magazine.
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
Aired November 5, 2002 - 08:47 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
JACK CAFFERTY, CNN ANCHOR: Could it be that the problems at WorldCom are worse than we thought from the first time we heard about the problems there? Andy Serwer is "Minding Our Business." He joins us now from New York City. WorldCom, what was it a $4 billion-plus debacle already, and now you say it might be worse than that?
ANDY SERWER, "FORTUNE" MAGAZINE: It's just hard to imagine that it could be worse, Jack, but it is. A new report out, blasting WorldCom, talking about a culture of greed, shedding new light on all the various intrigues here. Former U.S. Attorney General Dick Thornberg (ph) talking about wrongdoing, mismanagement, incompetence. He called it a trifecta, Jack, a smorgasbord, all kinds of stuff, connections to Solomon Smith Barney, more nefarious than he thought, bigger write-offs coming. The audit committee not having its act together.
This is what really got me, Jack, the fact that Bernie Ebbers had a $1 billion loan package from the company. I don't know, Jack, have you ever heard of a single human being getting a billion dollars in loans from anybody? Not a company, but a person.
CAFFERTY: No, I never have.
SERWER: Have you ever gotten a loan that big?
CAFFERTY: Are you kidding? the banks wouldn't loan me $50 I don't think. A billion dollars? And a lot of times they forgive these loans. The board of directors says, no, you don't have to pay it back.
SERWER: Yes, it's just amazing.
I want to also turn to the latest stuff going on in Washington today, some really interesting stuff with regard to William Webster, the head of that oversight board, suggesting that he may step down, because he was sued yesterday. A lawsuit saying that he made false and misleading statements. You know, Jack, this guy, the wags on wall street say, well, he's 78 years old, he doesn't know anything about accounting, but at least he's squeaky clean. Remember when they were saying that about William Webster.
CAFFERTY: Yes. Maybe not.
SERWER: Well, it doesn't look like he's necessarily so squeaky clean. And Harvey Pitt today, by the way, canceled a speech in New York, and Chuck Schumer asked him to step down, too, so. CAFFERTY: Yes, he's just gotten in one fix after another, and Ed Markey, the Democratic congressman of Massachusetts had a funny line about Harvey Pitt. He said he's violating the first rule of holes, which is, if you are in one, stop digging.
SERWER: I think his problems will soon be over, if you catch my drift, in a couple of days.
CAFFERTY: According to "The Los Angeles Times" yesterday, it might be a done deal. Andy, good to see you. I'll to you a little later. Andy Serwer, editor at large, "Fortune" magazine.
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
