WorldCom Puts Him in the Spotlight
Speaking in measured tones in his cluttered ground-floor office, state Atty. Gen. William “Drew” Edmondson doesn’t sound like someone itching to take on the political establishment in Washington.
His background doesn’t suggest it, either. His grandfather was a county commissioner. His father was a congressman. His uncle was the youngest governor in Oklahoma history and later served in the U.S. Senate. Edmondson’s own career is a study in calculated political ascension, from the Oklahoma Legislature to Muskogee County district attorney to an unprecedented third term as the state’s highest law enforcement official.
This week, he took a radical turn for someone who has long followed political conventions, and hijacked a high-profile federal investigation into one of the country’s biggest corporate accounting scandals.
By filing the first criminal charges Wednesday against telecommunications giant WorldCom Inc. and its deposed chief executive, Bernard J. Ebbers, Edmondson single-handedly threw into doubt the work of Justice Department prosecutors who want to punish the people responsible for understating expenses by $11 billion.
He also garnered more media attention in a single day than he did during the two years he worked on the $200-billion settlement with U.S. tobacco firms.
The securities fraud charges are among the first by a state against Wall Street’s most wanted, the men who ran WorldCom, Enron Corp. and other firms felled by accounting scandals. New York has charged some former executives of Tyco International Ltd., and federal authorities filed a civil action against the company.
Ashburn, Va.-based WorldCom pledged to cooperate with Oklahoma authorities.
U.S. prosecutors, who have charged five of Ebbers’ underlings and won four guilty pleas, are furious that the Oklahoma case might jeopardize their prosecutions. In addition to Ebbers, Edmondson charged the four who are cooperating with the federal government, and they might be afraid to testify about their illegal activity in a federal trial, fearing they would bolster the state case against them.
Some financial commentators and political opponents portray Edmondson as an ambitious bumpkin -- or worse, a public official doing the bidding of a campaign contributor, SBC Communications Inc., a phone company looking to keep rival WorldCom mired in bankruptcy.
Many others, including some of Edmondson’s courtroom foes, defend him as a fair, thoughtful and straightforward man who was simply unable to sit tight in the face of massive fraud at WorldCom and what he saw as the foot-dragging of federal investigators.
“He’s not a wild and crazy guy,” said Andy Coates, dean of the University of Oklahoma’s law school. “He’s very sound in his judgments.”
Edmondson, a 56-year-old Democrat with a teaching degree who has the look and demeanor of a high school guidance counselor, says he came to his decision gradually, after studying WorldCom with officials from California and other states who are now cheering his prosecution from the sidelines.
“He’s not your average elected official,” said Washington state Atty. Gen. Christine Gregoire, who led Edmondson and half a dozen other state attorneys general in the tobacco settlement talks. “He’s an individual who will always do what he considers to be the right things, no matter the personal or political consequences.”
Edmondson’s interest in public service goes back to his childhood, when he attended “political meetings and bean-dip dinners” with his father, he recalled in an interview.
“My brothers would go out of family obligation,” he said, “but I actually enjoyed it.”
His trust in government -- especially the federal government -- began to erode during the Vietnam War, when he served in the Navy and ferried secret messages to commanders on an air base. Reading that traffic, he said, “it became obvious we were in places where we said we weren’t.”
That “was one of a number of life circumstances that make me not trust immediately what we get told by the government.”
As attorney general, Edmondson has often argued against federal intervention into state matters. In 2000, he filed a friend-of-the-court brief supporting New Jersey’s attempt to stop the Boy Scouts of America from discriminating against gay troop leaders -- a position that didn’t endear him to his socially conservative constituents.
Edmondson has scored political points with his ardent and effective support of the death penalty, which is popular in the state. After the bombing of the city’s federal building that killed 168 people, he helped push a law through Congress that streamlined the lengthy appeals process in death row cases.
Oklahoma now executes more criminals per capita than any other state, according to the Death Penalty Information Center in Washington. Unlike his counterparts in some other states, however, Edmondson voluntarily authorizes DNA testing of convicts at state expense when there is a real question of guilt.
“Edmondson handles his position in a professional manner,” said Oklahoma County’s chief public defender, Bob Ravitz. “He’s not in any way vindictive.”
Nor, Edmondson said, does he use his position to protect his friends and allies. “I’m the guy who, as district attorney, raided my own Veterans of Foreign Wars lodge because it was engaged in illegal gambling.”
He said he put a mayor and district attorney -- both friends and financial supporters -- behind bars for corruption. He worked with the Federal Trade Commission to put two of his major campaign contributors out of business for making misrepresentations in violation of telemarketing rules.
“Friendship is one thing,” Edmondson said. “Breaking the law is something else.”
He and his wife, Linda, a medical social worker, have two adult children, one a lawyer and the other an anthropologist. A niece is serving a 35-year prison sentence for an infamous crime spree inspired by the movie “Natural Born Killers.” Edmondson said the personal trauma had not changed his view of the criminal justice system.
In the WorldCom case, Edmondson was initially troubled by the enormity of the misdeeds. For three years, the firm reported profit when it had none. Investors, including Oklahoma’s state pension fund, lost more than $200 billion when the company filed for the record bankruptcy protection it hopes to emerge from this fall.
Edmondson and officials from three other states complained when WorldCom’s bankruptcy plan showed the company wiping out most of its potential criminal penalties in its reorganization.
Then there was the headline-grabbing $750-million settlement with the Securities and Exchange Commission. By Edmondson’s calculations, $250 million of that amount will be paid in stock and $300 million comes from an IRS refund WorldCom received for paying taxes on nonexistent profit. At the same time, the company is collecting $772 million in federal contracts.
“That’s what drove me over the edge,” he said.
Edmondson feared that waiting for federal criminal charges would allow the company to escape punishment. In other cases, he said he had put his own investigations on hold at the Justice Department’s request, then learned that its cases fizzled only after Oklahoma’s statute of limitations had expired.
“The United States attorneys are not necessarily the speediest vehicles on the street,” Edmondson said. Why run the risk with Ebbers, he reasoned, when “we’re confident that we can convict him, and we’re confident that he’s guilty.”
Edmondson’s critics say there’s another factor at work: the attorney general’s friendship with SBC lobbyist Mike Turpen.
The two men go back more than 20 years, to when Turpen was district attorney in Muskogee County and Edmondson was one of his deputies. Outside of work, Edmondson directed Turpen in a local theater performance of “Arsenic and Old Lace.” Turpen, a former state attorney general, is one of Edmondson’s largest fund-raisers.
San Antonio-based SBC is among a handful of phone companies mounting an aggressive lobbying campaign to prevent WorldCom from emerging from bankruptcy protection with the competitive advantage of much less debt. Edmondson happens to agree, saying his sense of fair play is offended by the prospect that WorldCom could end up “stronger than other companies out there that have not broken the law.”
But he bristles when asked about Turpen. Yes, they discussed WorldCom’s bankruptcy advantage. But he insists his friend didn’t have any undue influence on his thinking.
Turpen told a Tulsa, Okla., radio station Friday that “when it comes to decisions like this ... nobody tells Drew Edmondson what to do and how to do it,” according to Associated Press.
Personal connections to people with a stake in law enforcement are to some extent unavoidable in a state with just 3 million residents. In the Oklahoma capital, where the seat of government stands across from blanched grass under an oil well, passersby nod to strangers on the street.
But even small states can make a difference in white-collar prosecutions. If Edmondson wins criminal convictions against Ebbers and other WorldCom executives, other states may be emboldened to follow suit -- with or without the blessing of the Justice Department.
For the time being, though, officials in other states will wait and see how Edmondson does.
“I hope that serious punishment is forthcoming” for WorldCom, California Atty. Gen. Bill Lockyer said.
Edmondson professes not to care about whether his actions this week will initiate a trend.
“It’s an interesting question,” he said. “But it doesn’t matter to me.”