Business Books: The human side of the WorldCom fraud

By Lisa Von Ahn

NEW YORK, Feb 7 (Reuters) - WorldCom's $11 billion accounting fraud may rank among the most infamous events in U.S. corporate history, but Cynthia Cooper, the auditor who exposed it, describes many of those involved as everyday people.

Readers of Cooper's book, "Extraordinary Circumstances: The Journey of a Corporate Whistleblower" (Wiley, $27.95), will find it easy to identify with both the employees who manipulated the telecommunications giant's financial statements and those who caught them.

For example, two reluctant participants in the fraud were so upset that they wrote letters of resignation -- but didn't submit them because they couldn't afford to lose their jobs.

And shortly before a meeting where she would discuss her explosive findings, Cooper changed her flight to avoid being on the same plane as an executive she would be confronting.

"I wanted the reader to experience events in real time along with my team and me," Cooper told Reuters. "I tried to go beyond the accounts and numbers and to really illuminate the human aspects of the story."

The book starts at a baby shower for new parents Scott Sullivan, then WorldCom's chief financial officer, and his wife.

"The atmosphere is full of warmth and good-hearted banter, but an unseen cloud hangs over this seemingly perfect picture," Cooper writes.

The fraud had been going on for nearly a year before the party in the late summer of 2001. Sullivan and another guest -- Chief Executive Bernie Ebbers -- would eventually go to prison.

"Extraordinary Circumstances," which is set for release on Friday, alternates between Cooper's own story and WorldCom's rise and fall.

The author grew up in Mississippi, received a bachelor's degree from the state university and went on to get a master's from the University of Alabama, with financial help from her mother, who cashed in her retirement plan.

In the meantime, Ebbers, a former motel operator, was making a name for WorldCom predecessor LDDS with an aggressive acquisition strategy. By the time Cooper joined the company in 1994 as manager of internal audit, it had become the place to work in Mississippi.

She worked her way up to vice president as LDDS continued to expand and became the Wall Street darling known as WorldCom.

Cooper and her team discovered the fraud in 2002, when she was 37. Married with two daughters, she was the breadwinner in her family, but she said her values, training and the obligation she felt to WorldCom's shareholders kept her from looking the other way.

"There were times when I knew I would lose my job," she said.

But that didn't happen. She was named a Time magazine Person of the Year and remained at WorldCom until 2004, when she left to start her own company.