November 19, 2002, 9:04 AM — Former New York City Mayor and ethical icon Rudolph Giuliani may be tapped to commandeer the board of WorldCom Inc., as the telecommunications giant struggles to rise from the ashes of bankruptcy and scandal, according to a report Monday.
Giuliani has reportedly allied with star bond investor David Matlin and the two have begun a fund aimed at accumulating at least one-third of WorldCom's bonds, putting them in a position to shape the company's restructuring, a report published in the online edition of the Wall Street Journal said.
Matlin wants to install Giuliani as chairman of the beleaguered company's board, according to the report, and has the influence to achieve it. Matlin is the head of a bond investor group backed by Credit Suisse First Boston which has already spent more than US$300 million to acquire 10 percent of WorldCom's debt.
News of Giuliani's possible ascendance comes just days after former Hewlett-Packard Co. President Michael Capellas was appointed chairman and chief executive officer (CEO) of the telecom company. While the entrance of Capellas, who is known to be a seasoned and savvy tech executive, was seen as a move to restore confidence in WorldCom's business practices, Giuliani would most likely be tapped for his reputation as an ethical leader.
Giuliani's move from mayor to executive at a scandal-plagued firm may strike some as odd, however. WorldCom filed for bankruptcy last July after revealing that it artificially boosted its revenue in what may be the most egregious case of corporate accounting malfeasance in U.S. history.
But the hard-bitten former mayor has a reputation for taking on challenges, having recently signed up to help the Mexico City government fight its rampant crime problems. Giuiliani made a name for himself in New York politics as a tough, racketeer-fighting federal prosecutor, before launching his bid to become mayor.