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The Honolulu Advertiser
Posted on: Wednesday, September 27, 2006

Day 1 of 25-year sentence begins for former WorldCom executive

By Andrew Dunn
Bloomberg News Service

OAKDALE, La. — Former WorldCom Inc. Chief Executive Officer Bernard Ebbers, convicted of overseeing one of the biggest frauds in U.S. history, has reported to a federal prison in Louisiana to begin serving a 25-year term.

Ebbers, 65, reported today to the low-security Federal Correctional Institution in Oakdale, U.S. Bureau of Prisons officials said. The 1,400-inmate prison for men is 230 miles from Ebbers' home in Jackson, Miss.

With good behavior, Ebbers can expect to serve 85 percent of his sentence — 21 years and three months. Ebbers, whose top one-year compensation at WorldCom was $18 million, will have a job such as food-server or janitor for a starting pay of 12 cents an hour, bureau spokeswoman Felicia Ponce said.

"Every inmate that is medically able to work has to have a job," Ponce said. "Every inmate is treated exactly the same. There's no distinction."

Ebbers built a small telephone company into the second-largest U.S. long-distance provider, then was accused of directing an $11 billion fraud that drove WorldCom into bankruptcy. He was convicted last year of conspiracy, securities fraud and seven counts of making false filings to the Securities and Exchange Commission.

Ebbers, sentenced 14 months ago, had been free on bail pending the outcome of an appeal. An appeals court in New York upheld his conviction in July, and U.S. District Judge Barbara Jones in New York ordered him to report to prison today.

Oakdale inmates sleep in dormitories in four housing units on grounds surrounded by a double fence topped with razor wire. All inmates wear the same style pants, khaki shirt and sneakers, Ponce said.

A seven-hour workday begins after wake-up at 6 a.m. and breakfast, she said. After a 4:30 p.m. dinner, inmates can exercise or go to the prison library. Lights out is at 10 p.m. Prisoners are counted five times a day.

Prisoners' mail is reviewed for contraband before being forwarded. They can order books only from publishers and receive newspapers by mail. Whatever money they have or get from the outside they can spend on toiletries at the prison commissary.

Inmates at Oakdale can have up to 10 visits per month, according to bureau documents, and no more than five visitors at a time. Attorney visits are unlimited. Ponce said that aside from a hug at the beginning and the end of a visit, physical contact between prisoners and visitors is generally not permitted.

Federal prisons have five security levels, of which low security is the second lowest, above minimum security camps.

"All of our institutions have inmates who have been sentenced for varying crimes," Ponce said. She wouldn't specify what types of offenses Ebbers' fellow inmates committed.

The government's star witness at Ebbers' trial, former WorldCom Chief Financial Officer Scott Sullivan, testified that he briefed his boss on efforts to hide costs at WorldCom and inflate revenue. Sullivan pleaded guilty and is serving a five-year prison term at a federal prison complex in Jesup, Ga.

WorldCom filed the largest bankruptcy in U.S. history in 2002 after Ebbers was ousted as CEO. It emerged from bankruptcy as MCI Inc.; New York-based Verizon Communications Inc. later acquired MCI.

Ebbers last year agreed to pay as much as $45 million — almost all his assets — to help settle claims in related civil suits. He and his wife were left with about $50,000 and a "modest" home in Jackson, a lawyer for the plaintiffs said.