WorldCon

WorldCon

WorldCon

A summary of what's in the major U.S. newspapers.
June 26 2002 5:02 AM

WorldCon

The Los Angeles Times and Washington Post  lead with an announcement from WorldCom, the nation's second largest long-distance carrier, that it overstated its cash flow by a total of $3.9 billion during the last five quarters. That amounts to one of the biggest cases of corporate fraud in U.S. history. The New York Times leads with administration officials saying that President Bush decided to call for Yasser Arafat's removal after he saw intelligence information "showing that the Palestinian leader had authorized a $20,000 payment" to the Al-Aqsa Martyrs Brigades, the group that claimed responsibility for the most recent suicide attack in Jerusalem. The Wall Street Journal tops its world-wide newsbox, at least online, with the same news, which the late edition of the WP fronts as well. USA Today leads with reaction to Bush's speech, saying it caused "widespread confusion" about the U.S.'s next steps. The paper says that the administration has been giving "conflicting signals." For example, says USAT, a State Department official said he still plans on meeting with Arafat "very soon."

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Citing one administration official, the Post says that the alleged evidence of Arafat's connection to terror, "led all senior officials to agree" that Arafat has to go.

The Journal, meanwhile, has the most skeptical take on the terror-links story. The paper says, "Most likely the report came from Israeli intelligence, which has frequently given the U.S. information about Arafat. It was unclear whether the U.S. had verified the report." The Journal adds that some administration officials gave a different explanation for Bush's tough new line: They said it was a result of the large number of suicide bombings last week.

The WSJ says that yesterday the administration "couldn't answer some of the most basic policy questions" about the new focus on regime change.

(Mapping out a metaphor: USAT's lead story headlines, "MIDEAST SPEECH LEAVES NO MAP." The headline of the lead editorial in yesterday's NYT reads, "A PLAN WITHOUT A MAP." And an editorial in yesterday's WP was headlined "AN UNCERTAIN ROAD MAP.")

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The papers say that the Israeli army now holds seven of the eight main Palestinian towns in the West Bank. At least 700,000 Palestinians are now confined to their homes because of round-the-clock curfews.

The LAT points out to the results of a poll showing that for all the talk about Palestinians being disillusioned with Arafat, if a vote were held today, he would win reelectionwith "an overwhelming mandate." Asked in one survey to name the leader they "trust the most," 25 percent of Palestinians picked Arafat. Next on the list was Sheik Ahmed Yassin, leader of Hamas, at nine percent. "Arafat will be reelected. That is the reality that we have to deal with," said one Israeli commentator.

The LAT notes that Arafat "confirmed" that plans are being made to hold elections in January. He added that they will be "democratic, democratic, democratic."

WorldCom, which owns MCI, says it uncovered the massive fraud during an internal audit. The company said it has fired its chief financial officer. It also announced that it's planning to cut about 17,000 workers, about one-fifth of its workforce.

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The Post cites sources saying that the Justice Department has already started a criminal probe.

The papers say that there's a good chance that WorldCom is toast and will declare bankruptcy. USAT reports that the company's stock, which has already dived 94 percent this year, fell another 70 percent in after-hours trading.

Everybody notices that until last month WorldCom's auditor was, of course, Arthur Andersen.

Meanwhile, according to a front-page piece in the NYT, federal investigators are looking into whether a number of banks, including Barclays, were involved in the Enron fiasco. According to the Times, authorities suspect that some banks that were investors in Enron's shady off-the-books partnerships loaned the company billions of dollars without disclosing it to their shareholders.

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The WSJ notes that U.S. soldiers in Afghanistan came under mortar fire in one incident and that somebody fired rockets at a U.S. base in another. Nobody was injured in either attack.  

The papers all point out that Amtrak said it's found cash to operate for about two more weeks. But the company emphasized that it's still $200 million in the hole. Meanwhile, Amtrak's vice chairman said that the Bush administration can solve the crisis "with the stroke of a pen" by signing-off on a loan guarantee. (Pop Quiz: Who is Amtrak's vice chairman? Answer: Former Massachusetts governor and presidential candidate Michael Dukakis.)

The Journal notes up high that President Bush sent a letter to House leaders urging them to raise the federal debt ceiling, which, Bush said, is the patriotic thing to do: "As we fight for freedom, we must not imperil the full faith and credit of the United States government."

The Post notes inside that President Bush signed a bill that allows death benefits to be paid to the domestic partners of firefighters and police officers who die in the line of duty. The paper notes that the White House announced the move "with a minimum of fanfare, sending a one-sentence e-mail Monday night" shortly after Bush's Mideast speech. The Post,meanwhile, decides the move deserves some fanfare. A teaser headline on the frontpage reads, "BUSH SIGNS BILL THAT BENEFITS GAYS."

WP columnist Lloyd Grove notes that a Hollywood production company is on its way to making a movie based on the brief, yet colorful, career of discredited journo Stephen Glass. Apparently the lead role will be played by Hayden Christensen, currently Anakin Skywalker in Star Wars: Attack of the Clones.

USAT notices the latest potential scandal for CEOs, according to a survey cited by the paper, "82 percent of high-ranking corporate executives admit to being less than honest on the golf course."