A case study of Cynthia Cooper
One May afternoon, while sitting in his cubicle at WorldCom Inc. headquarters located in Clinton, Mississippi, Gene Morse was stunned to find an accounting entry for $500 million in expenses, which was not accounted for with any invoices. He immediately reported this entry to his boss, vice president of internal audit Cynthia Cooper (Pulliam & Solomon, 2002). Little did they know at the time that this discovery would begin a journey for Cooper and her team that would challenge their core values, ethical beliefs, moral principles, and strain their physical strengths and personal relationships. They would eventually unearth a $3.8 billion dollar fraud. Cooper was faced with the ethical dilemma of reporting what she had found which she knew would devastate the company and its stakeholders, versus ignoring the problem, and taking no action. By June of 2002, Cooper had made her choice. On June 25, 2002, Wall Street was shocked by the announcement from WorldCom “that it had inflated profits by $3.8 billion over the previous five quarters” (Pulliam & Solomon, 2002, p A1). Thus began the downward spiral which would bring an end to an organization that once boasted a reputation of being a Fortune 500 company. Careers and lives would be ruined. Cynthia Cooper’s life would be changed forever. According to Cooper (2008, p. vii), “I never aspired to be a whistleblower. It wasn’t how I envisioned my life. But life is full of unexpected turns.” The Merriam-Webster Dictionary defines a whistleblower as “one who reveals something covert or who informs against another.” Despite its negative connotation, blowing the whistle was the right thing to do in this case. Cooper made “every attempt to resolve the problematic issues through available internal procedures prior to going public” (Kranacher, 2006 p.80). The day before the WorldCom fraud announcement, Cooper was a private citizen. The day after, she was a public figure (Cooper, 2008). In an interview with Cooper months after the crisis, she was asked if she would do anything differently to which she responded “there was only one right path to take, and I would take it again. I am fortunate to work with a group of very courageous auditors who held firm in their beliefs and did not waiver” (Barrier, 2003, p.53). In this paper, Cooper’s journey from the identification of the ethical dilemma to its resolution will be explored. In addition, value systems that helped form her judgment will be discussed along with the sources that she utilized to research and corroborate her suspicions of fraud, and those sources that gave her guidance. The paper will also delve into how her position within the organization could have influenced her decision to reveal the truth. In addition, the paper will ask the question that if WorldCom had operated by a different set of values would they have found themselves in this dilemma or would those values have prevented the situation from happening? In conclusion, the paper will summarize lessons learned by the participants and lessons that the reader can apply to business ethics. Sources of Information
At a time when business scandals such as Enron seemed to be at the forefront of the media, Cynthia Cooper and her team took their responsibility for financial reporting to great lengths. The team of three, which consisted of Cooper, who was only thirty-eight years old at the time, Gene Morse, and Glyn Smith, worked day and night to uncover the truth (Pulliam & Solomon, 2002). Cooper utilized many sources to help her in this quest. These sources included: her family, her team, professional standards, the accounting code of ethics, and, most importantly, her personal values. When Morse presented the entries to her, and the overall underlying accounting scheme began to reveal itself, Cooper was able to ask the right question of the accounting department and of both the former...