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July 13, 2005

Ebbers verdict

Steve Rosenbush

U.S. district judge Barbara Jones sentenced former MCI CEO Bernard Ebbers to 25 years in prison today, and the perception of white collar crime in the U.S. might never be quite the same. The duration of the sentence eliminates any doubt that prosecutors and judges view white collar crime as less serious than violent crime.

But one former Ebbers employee says many of the people responsible for the collapse of WorldCom, now known as MCI, will never be held fully accountlable. "It wasn't just Ebbers." says Glenn Klupsak, a former WorldCom sales executive who sat through the entire trial. Klupsak, who left WorldCom in 1998, well before the accounting fraud at issue in the indictment began, says his stock options were rendered worthless and that he suffered "seven figure" losses.

He says WorldCom's advisers and bankers at Salomon Brothers, including former telecom analyst Jack Grubman, should have shared the blame. "They were responsible, too," he said.

As for the sentence itself, it far outstripped anything that Klupsak expected. "I thought it would be closer to 10 years," he said. Was 25 years for Ebbers fair? "I don't know," said the stunned former employee, just moments after his former boss was sentenced.

02:06 PM


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