CEDAR FALLS -- A former WorldCom auditor who blew the whistle on an $11 billion accounting fraud scheme said Sunday she sees similar aspects in today's business climate that led to her former company's downfall.

Cynthia Cooper spoke at the University of Northern Iowa about her role in exposing the scheme in 2002. A guest speaker for the UNI College of Business, Cooper drew parallels with the collapse of telecommunications and dot-com industries with the current investment crises.

"There's a similar excess of risk taking and a lack of regulation and oversight," she said.

More than 600 members of the public and students filled Lang Auditorium to hear Cooper's presentation. She urged aspiring business leaders, when faced with a difficult decision, to do what is right.

"I think there are some universal values," she said. "A lot of people make ethics way too complicated."

Courage, she said, isn't doing something without fear, but doing something in spite of fear.

Cooper described how she and a few colleagues performed their own secret internal audit of the telecommunications giant beginning in early 2002. They uncovered 50 suspicious entries in WorldCom ledgers that added up to $3.8 billion in assets the company didn't really have.

"He said, 'Once we made them the first time, it was difficult to stop,'" Cooper said.

The former chief executive, Bernard Ebbers, is serving a 25-year sentence in federal prison for orchestrating the fraud. Others involved in the scheme, including mid-level accountants, also received prison sentences. Business graduates could face a similar decision to comply with a boss's order or do what they know is right.

Two key accountants who first altered the books wrote their resignation letters but never resigned, afraid to lose their incomes. One of the accountants was expecting children and was the sole income provider for his family, she said.

"It just goes to show how easy it can be - to cave under pressure."

Students may have to face similar dilemmas sooner than they might think, Cooper warned.

UNI alum John Meyer, retired controller of Sprint Corporation who accompanied Cooper on her visit to campus, drove home the point following Cooper's speech.

"These were middle managers of an accounting organization," he said. "It's not just at the top. It's a sobering story and deliberately so."

Accounting major and UNI senior Whitney Alsager said she will remember Cooper's message.

"It's a little scary to think you might face those dilemmas," Alsager said. "You just need to stick with your morals and stick to your values."

To add to the dilemma, whistle-blowers often have a hard time finding employment and are more likely to suffer from depression and alcoholism. Some lose not only their jobs but their families and homes, Cooper said.

Since outing the scandal, Cooper has been speaking publicly about her role and the role whistle-blowers play in the business world.

"As long as there are human beings on Earth, we will continue to see frauds and scandals," Cooper said.

Contact John Molseed

at (319) 291-1418 or

john.molseed@wcfcourier.com.