A lthough it is obvious that one of the key functions of network managers and LAN administrators is to minimize cost, we need to consider the ethics of organizations we do business with. One company that may deserve considerable scrutiny is the renamed MCI, which prior to its emergence from bankruptcy was known as WorldCom.
For those of us who are not too concerned with financial news and may have missed the particulars, in July 2002 WorldCom fessed up to the fact that the company improperly booked $3.8 billion in expenses (http://money.cnn.com/2004/04/20/technology/mci_bankruptcy/). By the time the full extent of the WorldCom fraud was revealed the amount of funds involved in the firm cooking its books had risen to the tune of approximately $11 billion (http://www.internetnews.com/bus-news/article.php/2190051, http://business.bostonherald.com/businessNews/view.bg?articleid=33351&format=). After a series of investigations, some plea bargaining, and various Congressional testimonies, only a handful of World-Com employees were deemed responsible for what is called the world's largest accounting fraud. Under the direction of a new Chief Executive Officer and with a new name, MCI emerged from the WorldCom bankruptcy in April 2004.
In considering any potential business with the 'new' MCI we need to ask ourselves if the organization has cleansed itself of those involved in participating in an activity that not only destroyed over $175 billion of stockholder equity and $3 billion in employee pensions but, in addition, more than likely contributed to the telecommunications bubble and its burst. At the time WorldCom was producing fictitious financial reports other telecommunications organizations attempted to match their spending on infrastructure improvements but obviously could not achieve a return on their investments anywhere near the phony numbers cooked up by WorldCom employees. Concerning those employees, although the new CEO of MCI likes to say that the fraud is literally past history, we need to ask ourselves if this is true, and, if not satisfied in our own minds we need to ask ourselves if we should do business with the 'new' MCI. Specifically, let us consider the $11 billion accounting fraud and a few of the organization's actions.
Even with inflation $11 billion is serious money. In fact, with a dollar bill being approximately half a foot in length, it only requires 274,560,000 such bills to circle the Earth at the Equator. Thus, we can view the WorldCom accounting fraud as similar to the hiding of dollar bills that if placed end-to-end would circle the globe approximately 40 times. The reason for this analogy is the fact that $11 billion is a serious amount of money that should be difficult to hide. To think that only a handful of people at WorldCom were involved in hiding $11 billion is open to question. After all, wouldn't an organization with hundreds of accountants and senior level vice presidents have a handle on costs and realize that red ink was flowing while black ink was being reported?
Another item worthy of mention is the fact that WorldCom's phony profits were offset by tax shelters that the Internal Revenue Service considers abusive and will more than likely disallow. So here we have it, while one cast of players were hiding expenses to make the company appear profitable another cast of characters were cavorting with tax attorneys to create what appears to be sham deductions to negate phony profits.
Although the 'new' MCI has shed over 20,000 employees over the past few years, we have no knowledge if some of those remaining employees lack the ethics that would have told the world about the fraudulent activities that were performed. Even if we assume such employees are long gone, we need to ask ourselves why over a year after the accounting fraud came to light the 'new' MCI was accused of