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A D V E R T I S E M E N T
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A D V E R T I S E M E N T
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Telecom Canary
“Kim must feel like a canary in the coal mines.” Not a comfortable comparison when you recall what happened to the birdies, but the comment, from one of Kim Emigh’s associates, was kindly meant. Emigh is the former Worldcom budget analyst who refused to implement an accounting policy that he felt amounted to fraud (“Accounting for Anguish,” May 16, 2002). His reward, a few months later, was to be laid off.
In light of subsequent events, Emigh’s looking like a hero and Worldcom is looking like roadkill. An audit found that the company had inflated its cash flow by almost $4 billion, dwarfing Emigh’s allegation about a different accounting fiddle worth about $3.5 million. The SEC has filed civil fraud charges, the company announced massive layoffs, its stock is selling for pennies, and NASDAQ, at this writing, was considering de-listing it. Congress will summon Worldcom executives to explain it all. And, the New York Times reported, investigators found that the funds shifted on company books exactly matched what Worldcom needed to meet its profit goals — increasing the likelihood of criminal fraud charges.
Emigh’s suit against Worldcom may be the least of the beleaguered behemoth’s worries, but it’s still a full moon on Emigh’s radar screen. A Dallas district judge threw out the lawsuit in late May on what Emigh’s lawyer, Bob Goodman, considers a technicality. Goodman said an appeal and request for new trial will be filed.
CNN, tipped to the Weekly’s story, aired an interview with Emigh Monday; The Dallas Morning News also mentioned him in a story. Static has a feeling that Worldcom will wish it had treated Emigh better. He’s likely to be a bulldog in seeking vindication in court. Judging by the Weekly’s e-mail, he’s already achieved that in the court of public opinion.
In the meantime, Static has a bone to pick with CNN. The network’s story on Emigh covered no new ground but was promo’ed five times during the telecast as a CNN exclusive. Weekly editor Gayle Reaves, who wrote this paper’s story on Emigh, called CNN reporter Steve Young and asked him to define “exclusive.” Young acknowledged the Weekly’s story as “groundbreaking reporting” and immediately backed away from the exclusive tag: “We probably should have said an exclusive television report,” he said. Oh. Perfectly clear. Is there an auditor in the house?
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