To Your Corporate Health

Earlier this year there were reports of executive jostling in Tommy Thompson's Health and Human Services Department over who gets to go into the protective bunker built for the high command should a terrorist seed the place with anthrax or some other chemical. And now comes a carefully coded but critical GAO report on the functioning of the HHS inspector general. Her name is Janet Rehnquist, daughter of Chief Justice of the Supreme Court William Rehnquist. Among other things, her fellow employees raised questions because Rehnquist "obtained a firearm" from a deputized agent in her office without proper credentials. The underling who gave her the gun did so "because she did not want the Inspector General to have any difficulty gaining access to secured areas in the event of a terrorist incident."

In March, Janet Rehnquist announced that she was quitting, effective June 1. The GAO report was finally released last week.

ACCOUNTING PRINCIPLES

"This is complete garbage," Scott Sullivan, WorldCom chief financial officer, told an employee who had dared to prepare a budget containing actual costs and adjustments. "What am I supposed to do with this? What have we been doing for the last six months? This is a real work of trash."

The brave employee was an exception to the rule. Most of WorldCom's accounting people in Clinton, Mississippi, and elsewhere around the country buried their heads in the sand while the company racked up fraud after fraud. From 1999 to 2002, WorldCom, in the words of the company's own investigatory committee, "suffered one of the largest public company accounting frauds in history."

In one case, when an employee found a big discrepancy and tried to ask Buford "Buddy" Yates, the company's director of general accounting, about it, Yates snapped, "Show those numbers to the damn auditors and I'll throw you out the fucking window."

Sullivan faces federal fraud charges and is free on $10 million bond. He denies any wrongdoing. Ex-CEO Bernard J. Ebbers has yet to be charged, and Yates pleaded guilty and is helping federal prosecutors.

Additional reporting: Phoebe St John and Joanna Khenkine.
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