Same as it Ebbers was

From the Department of Things We Were Already Pretty Sure Of came word this week that former WorldCom CEO Bernard Ebbers knew about the fraudulent accounting practices that eventually put the company in bankruptcy, and that members of WorldCom’s board were guilty of, at the very least, gross neglect for doing next to nothing to keep track of what was going on at the burgeoning carrier under Ebbers’ reign. To put it simply, nobody was minding the store.

The news came from two official reports, one from a former U.S. attorney general and the other from a former enforcement director for the Securities and Exchange Commission, that were filed with bankruptcy and federal district courts in New York. The former also raised questions about two employees who, until Monday, were still employed by a company that has consistently maintained that all of its bad tissue was eradicated. The resignations on Monday of Michael Salsbury, WorldCom’s general counsel, and Susan Mayer, the company’s treasurer, contradict those claims and raise further questions about whether the company now branding itself MCI is really as rehabilitated as it claims.

I largely agree with a column my colleague Glenn Bischoff wrote in last week’s Regulatory Insider e-newsletter, in which he argues that “tens of thousands of honest, hard-working people who had nothing to do with this” at MCI née WorldCom should not be held accountable for the transgressions of a corrupt few. However, I still assert that it is premature for WorldCom or its employees to portray the company as a squeaky-clean corporate entity, let alone a competitive model for others to follow--which it has been doing since the MCI rebranding was announced last month.

The accounting fraud perpetrated by WorldCom’s executives did damage to the telecom industry that still resonates very much today. No, employees of MCI should not be treated as pariahs, but the company should at least demonstrate some restraint until it is very sure that its house is completely clean.

E-mail me at jmeyers@primediabusiness.com.