Whistleblower to speak at Augustana
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By Doug Schorpp | Thursday, April 03, 2008 |
Augustana College professor Pamela Druger knows all too well about business fraud.
Druger, who holds Augustana’s S. James Galley Chair in accounting, also is a certified fraud examiner. She sees first-hand and the hows and whys of crimes like embezzlement in today’s world.
“It is happening everywhere, in churches, the Girl Scouts, huge companies, small companies,” she said.
She said one of the most amazing aspects is that people do not believe they are doing anything wrong in many cases. Many workers have the “I deserve this any way,” thought process, believing they are not paid enough or are not appreciated enough, thus justifying the crime.
“What we find out is they don’t think they are doing anything wrong, just borrowing this. That rationalization keeps them thinking they are a nice person for awhile,” she added.
But ultimately, it almost always unravels. “Because of the nature of how fraud happens, all of them will surface,” she said.
That was the case earlier this decade at MCI WorldCom. And Quad-Citians will get the opportunity to hear a woman who uncovered the largest corporate accounting fraud case ever when former MCI WorldCom executive Cynthia Cooper speaks next month at Augustana College, Rock Island.
Her presentation is “Extraordinary Circumstances: the Journey of a Corporate Whistleblower,” which also is the name of her current book. The lecture, which is free and open to the public, will be 6:30 p.m. April 10 at Centennial Hall, 3703 7th Ave.
While on campus, Cooper will meet with students in accounting and business administration classes.
Cooper was named one of Time magazine’s 2002 Persons of the Year after detecting massive accounting fraud at MCI WorldCom and reporting it to the company’s external auditors. The resulting investigation by the U.S. Securities and Exchange Commission led to the prosecution of company CEO Bernard Ebbers, who was convicted of securities fraud and conspiracy in 2005 and is now serving a 25-year federal prison sentence.
“Cynthia Cooper fulfilled her professional obligation to act ethically, in spite of the great personal and professional consequences she knew she would face,” Druger said. “She is living proof that you can be an ethical accountant in today’s corporate environment, and as such, Cynthia Cooper is just the kind of example we want to provide for our students.”
In her book, Cooper shares her experiences, like when the chief financial officer badgered her to delay her team’s audit of the company’s books and directed others to block Cooper’s efforts. Still, something in the pit of her stomach told her to keep digging, she says.
In June 2002, she made the decision that would reveal the largest fraud in U.S. corporate history. Cooper discovered that WorldCom’s accounting methods had turned a $662 million loss into a $2.4 billion profit for the company. Standing by her ethical values, she released a report that exposed the fraud, unleashing a firestorm of investigations, media coverage and accusations.
After MCI WorldCom’s collapse, Cooper remained with the company, serving as chief audit executive until it successfully emerged from bankruptcy. In 2004 she resigned to form her own consulting business. She now speaks on ethics and leadership to students and businesses.
Doug Schorpp can be contacted at (563) 383-2292 or dschorpp@qctimes.com.
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