Big-buck scandals smack small-town America

Until WorldCom's accounting scandal started drawing federal investigators and media hordes, the biggest controversy here was whether the town would bend to state pressure and up the speed limit on its main drag – better known to locals as a costly speed trap.

But WorldCom, the telecommunications giant that put this little Southern town on the big-business map, laid off 17,000 employees last week as it admitted that it had improperly accounted for $3.8 billion in expenses.

The WorldCom scandal has now put Clinton on another kind of map – that of corporate fraud.

And, Clinton – population 23,347 – is just one in a growing number of small-town dots on that map. Corporate scandal – once seen largely as a big-city controversy – is intruding on these peaceful paradises.

Adelphia Communications, the cable-television giant now in bankruptcy after $3 billion of questionable activity, is based in Coudersport, Pa., population 2,650. Tyco International, a huge conglomerate whose former CEO just received his second indictment – has its US headquarters in Exeter, N.H., home to13,309.

They are places with smiling faces and uncomplicated lives, where children still set up lemonade stands and the main topic around town is whether the high school team will make the state tournament. They're the kind of places where everyone knows everyone else – for better or worse. The kind of places CEOs want to raise their children.

So when camera crews come to town to chronicle severe business misdeeds, it is a rude shock.

"There has to be wretched disappointment," says David Heenan, author of "The New Corporate Frontier: the Big Move to Small Town USA." "It's like having someone in the family and then all of sudden finding out they are a black sheep."

Nowhere is this more evident than Clinton.

It's Wednesday evening and the streets are empty. Except for the American flags wafting in the sultry breeze along Clinton Boulevard, the only noticeable activity is the chirp of crickets in the dense pine thickets. It's prayer night in this bricked bedroom community – and it'll stay quiet until the churches let out, and everyone heads to the Dairy Queen.

As a the backdrop for WorldCom's rocketing fortune – and, now, its spectacular misfortune – Clinton's mood has definitely been tied to the company.

"It's the kind of place where you will find most everybody at the high school football game on Friday night, the soccer fields on Saturday, and church on Sunday," says Mayor Rosemary Aultman, who still owns WorldCom stock. Company stock reached a high of $64.50 in 1999 and was priced at 83 cents last Tuesday, when trading in the stock was suspended.

When WorldCom, the nation's second-largest long-distance provider, decided to move from nearby Jackson in 1998, the town was thrilled, she says. "To have a high-tech, cutting-edge company move here was just really exciting. The other part of it was that this was a Mississippi-grown company, so there was real pride in ownership."

Vic Ribeiro, a former hospital administrator, is taking a break from walking laps around the track at Mississippi College. He and his wife retired here after three of their four children chose to attend the Baptist school.

Mr. Ribeiro continually glances up at WorldCom's headquarters – a massive black building – in the distance, peeking up from its spot on the other side of the freeway.

"It's probably not going to hurt the economy much," he says. "But it's definitely going to hurt the town's pride. A lot of people think very kindly of Bernie Ebbers. But it's hard to believe that he didn't know what was going on."

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