Left behind by WorldCom, town awaits Ebbers trial

CLINTON, Miss. — What would grow into the nation’s second-largest telecommunications company came from the mind of Murray Waldron, long before Bernie Ebbers was at the helm of WorldCom.

Waldron, a 64-year-old native of Tennessee, moved to Hattiesburg, Miss., in the early 1980s to start a long distance telephone company, but was short on investors. It wasn’t long before he was introduced to Ebbers.

Their company began as LDDS, or Long Distance Discount Service. Waldron was the company’s first president, later moving aside for Ebbers in 1985, before the renamed WorldCom bought long-distance provider MCI.

“The company outgrew me pretty fast and I was wise enough to know that,” Waldron told The Associated Press in a telephone interview from his Hattiesburg home.

Now, far from WorldCom’s birthplace, federal prosecutors in New York are painting Ebbers as a white collar crook who orchestrated the $11 billion accounting fraud that led to the company’s downfall. His trial is expected to last until early to mid-March.

Waldron, meanwhile, lives “comfortably” after selling some of his WorldCom stock before the company’s collapse and 2002 bankruptcy filing — the largest in U.S. history. And the city of Clinton, which enjoyed an economic boom as WorldCom’s base, has some scars but is moving on.

Waldron makes no excuses for Ebbers. “If Bernie did not know what was going on, then he’s still responsible for it,” Waldron said, declining to elaborate.

Others in Mississippi still see Ebbers as the swaggering philanthropist who turned a tiny telephone service into a Fortune 500 company.

John Mosley, among the thousands of investors who lost money on WorldCom’s stock, bears no grudge against Ebbers.

“If he did know, they’ve got a case against him and the right thing will be done,” said Mosley, a Clinton automotive repair shop owner who lost $20,000 on WorldCom stock.

Ebbers’ former company has since emerged from bankruptcy under a new name, MCI Inc., and relocated its headquarters from Clinton, Miss., to the Washington, D.C., suburb of Ashburn, Va. It employs 41,000, down from the 62,000 employed in 2002 before the accounting scandal was revealed.

Ebbers, a Canadian who earned his degree at Mississippi College in Clinton, and later donated generously to the institution nestled in a picturesque corner of the city, still lives in Mississippi, where his company’s rise and fall has left many shaking their heads.

When WorldCom stock peaked in 1999, Ebbers was the richest man in Mississippi, worth $1.4 billion. He is part owner of KLLM Transport Services Inc., a large Mississippi-based trucking company that hauls coast-to-coast.

Telephones calls by The Associated Press to Ebbers’ office and that of his attorney were not returned.

LDDS was based in Brookhaven, a small city just south of Jackson, the state’s capital. In 1995, LDDS changed its name and Ebbers was named CEO. WorldCom moved its headquarters from Brookhaven, where Ebbers still lives, to Jackson and finally to Clinton in 1996.

Over the years, the company grew as the tenacious Ebbers negotiated mergers with UUNET Technologies Inc., MCI, Brooks Fiber Properties and CompuServe.

The tide turned in 1999 when a $115 billion merger with Sprint failed. Amid layoffs, sagging stock prices and whispers of possible management woes, Ebbers resigned as CEO, replaced by John Sidgmore.

The company’s bankruptcy left Clinton with unpaid bills. Mayor Rosemary Aultman said WorldCom has since satisfied its financial obligations, paying an $82,000 water bill and approximately $480,000 in taxes to the school district.

The campus headquarters, located off Interstate 20 near a movie theater and a row of restaurants, was meant for as many as 2,400 employees. Now, Aultman said about 550 MCI employees and 600 SkyTel employees are housed there. She said the campus occupancy never reached its capacity — only about 1,300 were there during the company’s peak.

Aultman said WorldCom had brought a “pride of ownership” to her city of 23,347.

“We were disappointed,” she said of the bankruptcy, but added that WorldCom’s demise didn’t kill Clinton’s economy. Aultman said sale tax revenue is up and the city’s property values have increased.

“The impact on the city and the surrounding area was more emotional than financial,” Aultman said. “The biggest impact was our local citizens who had money invested in the company and the loss of stock value.”

But Jim Rogers says business at his eatery declined after WorldCom started laying off its employees. Rogers, owner of Monroe’s Restaurant, said the number of customers shrank by 25 to 35 each day.

“It had a great impact,” he said.

As his trial approached, Ebbers has become an enigma. He refuses interviews and a sign at the entrance to his home warns away trespassers.

“I have not seen an awful lot of him,” said Brookhaven Mayor Bob Massengill, who has known Ebbers for 15 years.