"The rise of Bernie Ebbers bears comparison with the rise of the industrial tycoons of the 19th century. If it seems incredible that after just 16 years in the business Ebbers should be engineering the biggest corporate takeover in history, consider this: Andrew Carnegie first invested in steel in 1861. Forty years later, after buying out a string of competitors, he sold his steel holdings to J.P. Morgan. They formed the core of the new U.S. Steel, and Carnegie, the onetime 'bobbin boy' (yes, all the histories still call him that, even now when no one knows what that means) from a textile mill was reputedly the richest man in America.
There is, however, one great difference between the Carnegies and Rockefellers of the 19th century and the mega-tycoons of today. Carnegie, effectively, was accountable to no one but himself (and a conscience that was for Carnegie always a source of some trouble); Ebbers is the servant of his shareholders. This is certain: He will stay on top of the world only as long as his share price keeps rising. We live in a far more rational, and arguably more honest, economic world. Whether that turns out to be a fairer one, less prone to the excesses of monopoly and more hospitable to those at the bottom of the economic ladder, is still an open question."
That was Oct. 1999. The writer of that Salon.com article couldn't have been more on point. Just two and a half years later on April 30th, 2002, the board of WorldCom called for Bernie Ebbers resignation and two months later on June 25th, 2002, WorldCom announced $3.85 billion in accounting misstatements, a number that would grow to $11 billion. Pretty much everything Bernie Ebbers had was wrapped up in the value of WorldCom's stock as well as the very stability of the company itself. For him it all culminated this last week on July 14th, 2005 when he was sentenced to 25 years in prison for his part as head of WorldCom during the largest accounting scandal in U.S. history.
It's a fascinating story, one that raises a lot of questions about not only about 19th century and 20th century business practices, but now only a few years later it raises new questions as we move into a completely different business era. Should we be so bold as to believe that this newly evolving era will be (to paraphrase the Salon writer) "far more rational, honest and less prone to the excesses of monopoly"?
What are the new demons? What is the tyranny of the long tail, of open source, of decentralized business and media?
Via: Bernard Ebbers - Wikipedia, the free encyclopedia