Friday, May 28, 2004
The Fraud Argument
The Wall Street Journal had an amazing article in its Wednesday, May 26 issue. I think you have to be a paid subscriber to get the article at www.wsj.com, but the gist of it is that Mike Armstrong, the former CEO of AT&T (and a current chairman of Comcast), lost his grip on the telecom giant because his chief competitors (WorldCom, Qwest, Global Crossing) were cooking their accounting books:
"Suddenly, AT&T looked like it couldn't manage its business as well as WorldCom," says Mr. Armstrong. "But in hindsight, they weren't executing at all. They were cheating, and we were executing better than any of them."
While he may be able to blame his year 2000 decision to split up AT&T (long lines, wireless and cable), it is a huge stretch to see how his $100 billion decision to go on a cable buying spree in 1998 was motivated by fraud committed at the upstart rivals. See what you think. (I can email it to you for the next 28 days.)
