David Myers, Worldcom's controller, spent 9 months in jail for his role in cooking the books that destroyed one of the giants of the telecom industry.
Frankly, that's hardly "repaying your debt to society." He got a deal for testifying against his boss, and got off with a wrist slap.
So it's a little surprising that Myers received a $7.45 million loan guarantee from the Department of Agriculture in order to buy a health care business in Mississippi. The guarantee was part of a program funded by the $880 billion stimulus bill.
Ways LLC, a company formed by Myers and Peter Koury, a health-care executive, received one of the 515 loan guarantees made by a U.S. Department of Agriculture rural development program under the 2009 federal economic-stimulus bill. The USDA guaranteed a $7.45 million loan from a Louisiana bank, allowing Myers and his partner to finance the purchase of a home health agency that provides care to 650 people in the Mississippi Delta, one of the poorest regions in the U.S.
Myers, 54, served nine months in prison for helping to falsify the telecommunications company's books to meet earnings targets. The $11 billion accounting fraud wiped out more than 17,000 jobs and $184.6 billion in market value from WorldCom's high on June 1999. Myers's cooperation with prosecutors led to the guilty plea of Scott Sullivan, WorldCom's former chief financial officer, who became the star government witness in the trial of Chief Executive Officer Bernie Ebbers. Ebbers was convicted in 2005.
"I understand what the costs of my actions were to me personally, to my family, to the people that invested in WorldCom," Myers said in a June 5 interview at his office in Jackson, Mississippi. "I can never allow something like that to ever happen again."
A former WorldCom data analyst who lost most of her savings in the fraud is outraged that the government would trust Myers with a loan guarantee. The lead prosecutor in the WorldCom case disagrees and says Myers accepted responsibility for his actions, cooperated fully against Ebbers, learned his lesson and is no bigger risk than anyone else.
While no federal rule or law barred a loan guarantee to Myers and he wasn't obligated to disclose his conviction, he wrote a three-page letter to the USDA describing his participation in the fraud and all the steps he has taken, including speeches to college audiences and corporate ethics programs, to encourage others to avoid his mistakes.
I believe in second chances for felons. But not with tax money. If a bank wants to take a flier on his business ideas, fine. I would encourage them to do so.
But leave the taxpayer out of his rehabilitation. Especially tax money so egregiously spent as found in the stim bill.