The subpoenas were issued at 4:30pm on Thursday, requiring WorldCom Inc executives to testify to the House Financial Services committee on accounting that erased more than US$1 billion in profits last year.
Within four days, the telephone company sent lobbyists to Capitol Hill to brief congressional aides on WorldCom's version of events and hired APCO Worldwide, the public relations unit of the sixth-largest US advertising company, Grey Global Group.
Corporate lobbyists and image consultants say such preparation can be crucial when executives are summoned to explain their actions to Congress -- often on national television.
The House Financial Services Committee hearing on will focus on an e-mail message an associate of a Salomon Smith Barney analyst sent to WorldCom executives, the New York Times reported.
An unidentified Salomon associate of telecommunications analyst Jack Grubman sent the message to WorldCom's former chief financial officer, Scott Sullivan, inquiring about a rumor of a US$3 billion charge at the company, the paper said, citing an unidentified person with the House committee.
The message was sent shortly before WorldCom announced it would restate earnings because it discovered that it had been misrep-resenting expenses, the paper said. The message raises questions as to when Salomon became aware of WorldCom's accounting irregularities, the paper reported.
WorldCom executives appeared yesterday, following Enron Corp, Arthur Andersen LLP, ImClone Systems Inc and Global Crossing Ltd in being forced to testify before Congress.
"People in corporations aren't used to this," said Chris Hansen, a Boeing Co lobbyist in Washington for 18 years. "They don't view it as part of the game. It's absolutely terrifying to them."
Many consultants say company executives are more comfortable talking to Wall Street analysts or courtroom lawyers than being questioned by lawmakers on television. Chief executives lack control during the congressional hearings, unlike events where they are promoting an initial public offering or explaining a strategy to investors.
"Most are not intended to shed light on the underlying problem," said Harry Clark, a former partner in the lobbying firm Clark & Weinstock that has represented dozens of companies, including Andersen. "They are intended to shed heat on the political aspirations of the committee members."
As Nancie Poppema, executive vice president of CCA, a Dallas company specializing in "high risk" public communications, put it, "When executives go before Congress and C-Span, they are in front of the nation: their customers, their stockholders, their regulators and their employees. It's a much bigger court."
Consultants recommend several strategies. For Stanley Brand, a former lawyer for the Securities and Exchange Commission and general counsel to the US House of Representatives, it's a matter of minimizing legal damage.
Many companies facing Congress -- WorldCom included -- are enduring separate criminal investigations, regulatory hearings and civil court action. "You've got to be careful not to provide fodder for other forums," said Brand, now a partner with Brand & Frulla and who worked for Andersen in its hearings.
"You want to be as laconic and as non-exciting as you can be," he said. "Colorful witnesses are always invited back and expose themselves to collateral damage."
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