INSUBCONTINENT EXCLUSIVE:
Bernie Ebbers, who has died at the age of 78, was a big man in every sense of the word.The bearded former nightclub bouncer officially stood
at 6 foot 4 inches but, typically dressed in a Stetson and cowboy boots, looked even bigger.The company he built, WorldCom, briefly became
one of the world's biggest telecoms businesses and Mr Ebbers one of America's richest people.However, unfortunately for Mr Ebbers, he is
more likely to be remembered for his role in what remains one of the world's biggest accounting frauds.Image:Ebbers was handed a 25-year
jail term following his conviction in 2005 but was released early in December 2019 on the grounds of poor healthHis rise was one of the
great rags-to-riches stories that America loves.Born in 1941 in Edmonton, Canada, Mr Ebbers was the son of a travelling salesman who
relocated his family first to California and then to New Mexico, where he attended school on a Navajo reservation.After college, Mr Ebbers
returned to Canada, where he worked initially as a nightclub bouncer and as a milkman.He later recalled: "Delivering milk day to day in
30-below-zero weather isn't a real interesting thing to do for the rest of your life."He went on to work as a basketball coach, before
working in a clothing warehouse and then buying a motel in Mississippi, which he went on to build into a small chain.In 1984, the
opportunity to do something bigger came along.The Reagan administration, as with the Thatcher government in Britain at that time, was
opening up America's telecoms sector to competition.AT-T's effective monopoly was taken away from it as the government sought to encourage
others to enter the sector
The deeply religious Mr Ebbers was invited by David Singleton, one of the partners at his local prayer group, to meet two entrepreneurs,
Murray Waldron and Bill Fields, who were keen on setting up such a business.The four met at a diner in Hattiesburg, Mississippi, to thrash
out a plan that involved reselling long-distance lines to small and medium-sized businesses
The enterprise was, at the suggestion of a waitress, named Long Distance Discount Service
The company was to trade under that moniker until, in 1995, it changed its name to WorldCom.Image:WorldCom's business was bought by Verizon
in 2005By then, it was one of America's biggest telecoms players, having acquired dozens of smaller players worth billions of dollars in
total.The company first burst onto the City's consciousness in a big way when, in late 1997, it gate-crashed what would have been the
biggest deal in British corporate history.BT had announced plans in November 1996 to buy MCI, a US telecoms rival, in a cash-and-shares deal
valuing the latter at a then-massive £15bn
The combined business would have been second only to AT-T, the US giant, in the global telecoms market.Over subsequent months, as MCI's
financial performance worsened, BT sought to reduce the price it was paying
Then, to its dismay, WorldCom emerged with a higher offer.With typical bravado, Mr Ebbers told reporters: "We are able to make a superior
offer for MCI because we can realise far greater synergies and savings than BT can
They just don't live here."The enlarged MCI-WorldCom was, by then, a major force in what was then the emerging internet market
Mr Ebbers had realised, early on, that there was more money to be made by owning fibre-optic lines down which data could be sent than there
could from re-selling space on long-distance phone lines.All the while, despite resembling a swaggering cowboy, he was carefully cultivating
the image of a simple 'aw shucks' Southern Baptist who had little understanding of the products his company sold
For many years he did not use a mobile phone and claimed he only sent his first email in 1999.That was the year in which WorldCom's stock
price peaked and it achieved a stock market valuation of $160bn.It was also the year in which the company embarked on what Mr Ebbers hoped
would be its biggest deal yet - a $116bn cash-and-share offer for rival Sprint in what would have been a combination of America's second and
third-largest telecoms companies.But the deal was blocked by competition regulators in both the United States and the EU and, as the dot-com
bubble burst in 2000, WorldCom's shares started to fall and worries about its debts began to rise.Mr Ebbers quit in April 2002 amid
revelations that he had borrowed nearly $400m from the company.By then, its stock market value had shrivelled to $7bn and the Securities -
Exchange Commission, America's top financial regulator, was sniffing around.Three months later, WorldCom was forced to file for bankruptcy
protection, while by the end of the year it emerged that the company had fraudulently exaggerated its earnings by $11bn
Investors in the company lost billions.Despite all this, Mr Ebbers remained popular in Mississippi, where he had given hundreds of millions
of dollars to local charities.On the Sunday after he was ousted, in 2002, Mr Ebbers walked to the front of his church at the end of the
service to tell the congregation: "I just want you to know you aren't going to church with a crook."Image:Activists hold up signs during a
rally on Wall Street against the Bush administration's settlement with WorldCom in 2003The SEC begged to differ and, in 2005, a federal jury
in Manhattan found him guilty of fraud, conspiracy and giving securities regulators false documents.His argument that he had been too high
up the corporate food chain in WorldCom to know about the accounting fraud was undermined when the company's former chief financial officer,
Scott Sullivan, testified against him.Me Ebbers was sentenced to 25 years in prison and was among a number of 1990s US corporate chieftains,
including Dennis Kozlowski of Tyco, Jeffrey Skilling of Enron, John Rigas of Adelphia Communications and Martha Stewart of Martha Stewart
Living, who were jailed in the 2000s for various misdemeanours.He was released just before Christmas on account of his failing health and
died on Sunday evening.His passing marks the end of a remarkable story which came to be a byword for corporate fraud
WorldCom's collapse remained the biggest on record until Lehman Brothers failed in 2008.
