The recovery we're looking for.

• Author: Schwab, Robert
• Position: Speech by Charles Bowsher - Column - Brief Article

QWEST'S STOCK PRICE DROPPED MORE THAN 66 PERCENT, FROM ABOUT $42 to $14, in 2001, hurting its shareholders, its employees and the financial vitality of the company, which struggled under a huge mountain of debt.

Yet Qwest's board of directors awarded CEO Joe Nacchio a $1.5 million bonus for the year, supposedly to reward his performance.

Meanwhile, the board of another telecommunications giant, WorldCom, parent of MCI, a high-tech, high-salary employer in Colorado Springs, forced the resignation of WorldCom CEO Bernie Ebbers, after it had loaned Ebbers $366 million.

Loaned it to him. A loan the size a nation might borrow from the World Bank.

WorldCom's board was embarrassed by the loan, not only because it was made so Ebbers could cover his debts from other poor investments, but also so he wouldn't dump WorldCom stock on financial markets that were already pushing down its share price.

If you think we're trying to recover from a mild recession exacerbated by the attacks of Sept. 11, think again. Bernie Ebbers and Joe Nacchio are symptoms of the business environment we're trying to recover from, and it started long before Sept. 11.

"It's not just a few bad apples," Charles Bowsher, former head of the General Accounting Office, told a Colorado State University audience last month. Bowsher said surveys of U.S business executives indicate that as many as 20 percent, if pressed, would have to admit questionable corporate accounting practices. "It's much more serious than I thought," Bowsher said.

Just take a look at the losses posted by many of the companies in this issue's list of the Top 250 Public Companies (page 21).

Then go forward in the magazine to page 12 and read Eric Peterson's piece on Lynn Turner and Paul Miller, two nationally known accounting reformers from Colorado, who believe managers of public companies should be held responsible for accurately reporting the financial state of their firms.

Bowsher backed them up.

"Management has to get religious again," he said at a distinguished-speakers event sponsored by CSU's Center for Quality Financial Reporting and the Denver accounting firm Gelfond Hochstadt...