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At WorldCom, Cooper desperately needed to carry more plates. The culture was so anti-jargon that Ebbers had ordered her never to use the phrase "internal control"--shorthand for the fundamentals behind auditing--again. He said he didn't understand it, says a WorldCom employee. But that is like asking a weatherman not to use the word forecast. So Cooper huddled her small team together and planned their debut. She called Ebbers, Sullivan and a few others to a meeting in the main conference room. She was going to force them to see what an audit department could do for their bottom line.
The morning of the meeting, everyone gathered together--except Ebbers, the most important attendee. Cooper refused to start without him. After 30 painful minutes, he finally strode in, wearing his trademark sweat suit and holding a cigar, remembers an employee who was there. "What in the hell is the purpose of this meeting?" Ebbers demanded to know. Cooper, in her low, serious voice, asked him to have a seat and turned to her first slide, which defined the purpose. "He wanted to know where his next dollar was coming from," Cooper says. And she told him. Her division could find millions of dollars in wasteful operations with the use of internal controls. And indeed, over the years that followed, Cooper says, "we paid for ourselves many times over." Ebbers ended up being the last person to leave the meeting.
WorldCom started as a mom-and-pop long-distance company in 1983. But in the 1990s, it matured into a powerhouse. In 1997 it shocked the industry with an unsolicited bid to take over MCI, a company more than three times its size. In 1998 CFO Magazine named Sullivan one of the country's best CFOs. At age 37 he was earning $19.3 million a year. The next year Cooper was promoted to vice president. The stock price had gone through the roof, and she and her friends at work would sometimes talk of retiring early, taking care of their parents and starting their own businesses. Cooper harbored a girlish dream of starting a bead shop. She had even ordered a couple hundred thousand beads, which still sit in her garage.
But by early 2001, overexuberance for the telecom market had created a glut of companies like WorldCom, and earnings started to fall. Cooper was aware of the decline but not of the creative accounting fix. At WorldCom her department handled operational audits, which set company budget standards and evaluate performance, among other things. Financial audits, which verify the accuracy of a company's financial reports, were the province of the then esteemed independent firm Arthur Andersen.
It was a fluke, really, that Cooper got wind of the rotten accounting. A worried executive in the wireless division told her in March 2002 that corporate accounting had taken $400 million out of his reserve account and used it to boost WorldCom's income. But when Cooper went to Andersen to inquire about the maneuver, she was told matter-of-factly that it was not a problem. When she didn't relent, Sullivan angrily told Cooper that everything was fine and she should back off. He was furious at her, according to a person involved in the matter. Cooper, concerned that her job might be in jeopardy, cleaned out personal items from her office.