Former New York City mayor Rudy Giuliani may be the next chairman of WorldCom.
Sorry, what?
Yes, WorldCom just Friday named HP's Michael Capellas WorldCom's new president, chairman, and chief executive. A few observers scratched their heads, since Capellas isn't exactly Mr. Telecom. Giuliani, despite running a small risk-assessment company, isn't even Mr. Business.
Risk assessment. And he's considering a top spot at WorldCom?
Anyway, all this is happening because money talks. A fellow named David Matlin, explained the Wall Street Journal article that appears to have broken this story, leads a bond investor group that's one of WorldCom's biggest creditors. Matlin has also started a fund with Giuliani that could buy up to one-third of WorldCom's bonds, and one-third might be all they need to name board members. "Distressed-debt guru Matlin has a history of trying to wrest control of companies," said USA Today. Forbes.com more bluntly characterized it as "vulture investing."
Since WorldCom's reputation needs all the help it can get, Giuliani's image as a Sept. 11 hero can't hurt. "What's not to like? He's (Time Magazine's) 'Man of the Year,'" chirped Capellas. First, we hate to go all PC in the name of accuracy, but the Time title is now "Person of the Year." Second, it indicates importance, not broad likeability (1979: Ayatullah Khomeini).
Not everyone was convinced that Chairman Giuliani made any sense. "What is Rudy thinking?" asked Tuesday's Wall Street Journal, after Giuliani's company confirmed his involvement. "Back in the 1980s, when Rudolph Giuliani was a federal prosecutor, he would have jumped at the chance to investigate scandal-plagued WorldCom and try to add the scalp of Bernard Ebbers to his collection," wrote Forbes.com's Mark Lewis, who wondered "what would be in it for Giuliani." The New York Times wrote, "People close to Mr. Giuliani said it was unlikely that he would give up his own business ventures ... to take any position binding him too closely to one company." The Guardian implied the gig wouldn't be exactly time-consuming, calling him WorldCom's "potential figurehead." The Journal added, "Under the company's current bylaws, WorldCom's chairman has a weak role."
Now go back and read last Thursday's Globe and Mail article called, "Giuliani turns eye to corporate life." Rudy "has no specific plan or company in mind for his salvage efforts," wrote the Globe and Mail's Gordon Pitts. "But the idea of being a CEO fighting to save a major corporation brought down in the current climate of accounting scandals and financial crisis clearly appeals to him." Hint, hint. - Jen Muehlbauer
Bond Fund, Rudolph Giuliani Become Players in WorldCom
http://online.wsj.com/article/0,,SB103756187112038868,00.html
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Rudolph Giuliani's Sets Sights On Rescuing Ailing WorldCom
http://online.wsj.com/article/0,,SB1037656651911624868,00.html
(Paid subscription required.)
Rudy Giuliani As WorldCom Chairman?
http://www.forbes.com/home/2002/11/18/cx_ml_1118worldcom.html
Giuliani Tipped For WorldCom Hot Seat
http://www.guardian.co.uk/business/story/0,3604,843035,00.html
Creditors Complicate Search For New CEO at WorldCom
http://www.usatoday.com/money/industries/telecom/2002-11-17-worldcom_x.htm
WorldCom Investor Hires Giuliani Consulting Firm
http://www.nytimes.com/2002/11/19/business/19TELE.html
WorldCom Call for Giuliani
http://www.nydailynews.com/business/story/36612p-34577c.html
Giuliani Turns Eye To Corporate Life (Globe and Mail)
http://tinyurl.com/2tnc
TIME Person of the Year -- Archive Since 1927
http://www.time.com/time/poy2001/archive/1927.html
