USA TODAY - MONEY
Posted 3/27/2005 10:59 PM Updated 3/28/2005 1:41 AM

Many CEOs take Ebbers' crime personally, want tough sentence

By Del Jones, USA TODAY
Convicted WorldCom CEO Bernie Ebbers may be lucky that fellow chief executives won't be handing out his sentence on June 13.
CEO sympathy for Ebbers is sparse. Animosity is widespread.

"Ebbers and his like can burn in jail or worse for the rest of their lives," says Peter Pifer, CEO of Enhanced Telecommunications. "The damage they have done to this industry is terrible, not to mention ... their ex-employees."

Ebbers was convicted of an $11 billion fraud this month. An unscientific survey of 838 executives for USA TODAY by TheLadders, an Internet job site for those making $100,000 to $500,000, found that 71% want Ebbers to get 10 years or more. A separate survey at the Inc. 500 Conference this month found that 59% of the founders of the fastest-growing companies say Ebbers deserves at least 10 years, and half of those say it should be at least 25.

The Inc. survey also found that 2% say Ebbers deserves no time, and 18% think he deserves only house arrest. But 11 CEOs went on the record with USA TODAY, and none said Ebbers deserves a light sentence. The kindest response was from Herb Vest, CEO of Web site True, who said his heart goes out to Ebbers' family. But securities laws must be "vigorously enforced," or nothing less than the nation's economy is at risk, Vest says.

"When trust is betrayed, the entire system is threatened," says CEO Gary Griffiths of Everdream. WorldCom led to Sarbanes-Oxley and other regulation that "takes us further and further from the free enterprise that has fueled this incredible economic engine. Punishment must be swift and severe."

Allstate CEO Edward Liddy says it's not the fault of companies when WorldCom or Enron collapse from massive fraud, it's the fault of those who ran the companies. "You bet, they ought to go to jail."

All CEOs feel they have been tainted by the fraud, Liddy says. "It's not a pleasant place to be. There ought to be a substantial price extracted."

Dave Liniger, chairman of RE/Max, favors a life sentence for Ebbers, who he says "has ruined thousands of careers and financial futures. If a poor, hungry black kid in the ghetto sticks up a store for $100, he probably gets many years behind bars. Why should a white-collar thug get less?"

Ebbers deserves a harsh sentence because he pulled off "one of the most extravagant feats of dishonesty Corporate America has ever experienced," says Seventh Generation CEO Jeffrey Hollender.

"Look at Michael Milken. He made hundreds of millions of dollars and served a few years. That's wrong," says David Perdue, CEO of Iviation.

Ebbers probably considered the threat of prison an inconvenience, says Nailco CEO Larry Gaynor. "Many lost their life savings, their homes, their families and their personal dignity. The proper sentence is up to the judge. The fine should be his net worth."