WorldCom’s Coffee Conspiracy The Rise and Fall of Bernie Ebbers

July 27, 2002

By C. S. Deam

The waitress handed them a handwritten note on a paper napkin, “LDDC – Long Distance Discount Company.” Disappearing just as quickly as she’d arrived, she had delivered what they asked her for – a name for their new company.

The three businessmen and the high school coach carried, from that Mississippi coffee shop, a handwritten note, modifying the name slightly into Long Distance Discount Services. LDDS became a company which would change, seeing dozens of mergers and acquisitions. It was a company that would become the second largest phone company in the USA, a company that would experience the nations largest bankruptcy in history – WorldCom.

In 1985, two years after that coffee shop experience, the cowboy boot wearing coach would become CEO, and seventeen years later he would resign from the post in disgrace amid a swirling controversy that involved – of all things – coffee.

Clearly, coffee has always played an integral role in the life of WorldCom. Much like how the great president Lincoln was born in a tiny log cabin in Kentucky, likewise the great telecom giant, WorldCom, was born in a tiny Mississippi coffee shop on a summer day in 1983.

Over the course of the next decade, as WorldCom grew, so did it’s proliferation of coffee pots throughout the WorldCom kingdom. In fact, in 1989, the year LDDS becomes public through the acquisition of a company that was already coffee heavy, ACI, the world coffee market plunged, even sending entire countries, such as Rwanda, into civil unrest.

Years later such unrest would surface within the WorldCom kingdom, with bootclad Bernie at the helm. During the winter of 2001, Coach Ebbers would rally his team into industry leading savings of $4 million per year by eliminating company-subsidized coffee from all it’s facilities.

Tension throughout the company at that point in history exceeded even that of the months after WorldCom merged with MCI. Because MCI had been partnering on projects with British Telecom, the acquisition by WorldCom caused a corporate rift steeped in beverage bitterness between their coffee-wielding selves and their tea-totalling counterparts at British Telecom.

Reports indicate that the impetus behind Coach Ebbers 2001 coffee killing edict was his personally undertaken stealth inventory of the number of coffee filters and coffee packets at the WorldCom headquarters in Mississippi. When the numbers didn’t balance, coach concluded that packet pilfering was hurting the company’s bottom line. Apparently Bernie never made coffee for himself and never had to put two packets of coffee in one filter to get a strong cup-of-joe.

Little did Bernie know that while he was on a counting quest, becoming the vilified Coffee Czar to his 75,000 subordinates, across the hall from his office – other numbers weren’t balancing. While Bernies focus was on seeing company-subsidized coffee grounds getting replaced by instamatic coffee vending machines throughout the Worldcom empire, he wasn’t seeing CFO Scott Sullivan creating his own grounds – for dismissal.

It’s been a few months since Ebbers, Sullivan, and Myers left WorldCom. The new CEO, a coffee guzzler extraordinaire – John Sidgemore – has reinstated the coffee subsidies for his loyal troops. But did coffee cause the rise and fall of Coach Ebbers?

I think the details are too compelling to call it coincidence.

Somewhere in Mississippi there’s a coffee shop waitress who is glad she got a 50 cent tip and not LDDS stock options.

“C.S. Deam is a Java Programmer, Freelance Writer, and rabid 77s fan. He and his wife live in Cedar Rapids, IA and are expecting their first Korg D1600 in the fall of 2002.”

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