The Cadillac of Everything
The Cadillac of Everything While Bryan brought billions of capital dollars to the company and senior management hammered out vendor financing deals worth hundreds of millions of dollars with suppliers such as Cisco Systems, Lucent Technologies and Nortel Networks, lavish spending, lax controls and signs of theft and kickbacks raised red flags for many inside the company.Bryans personal expense account alone often topped $45,000 per month. Among the items he charged to ICG: the services of maid Maria Sosa for his apartment, a $5 tip to a handyman named Richie and a $878.62 Bloomingdales shopping trip, according to submitted receipts. Personal expenses on Bryans company credit card were "routinely paid without question," Owen said, including charges for his "political activities" and expenses for a private business he owned, she said. Bryan was a prolific fund-raiser for former President Bill Clinton and former Vice President Al Gore, and was former national finance chairman at the Senate Democratic Campaign Committee, for which he raised $54 million in two years. Owen, who worked for ICG for two years, said she was told "not to audit executive expense accounts," but she said she did so anyway, lumping them under a general employee travel and expense audit. It has been widely reported in the months since ICGs collapse that company executives spent money for luxuries like corporate limousines with personal drivers, first-class airline travel and an executive condominium in California. But Owen said executives also were reimbursed for things that had already been paid for by the company directly. In some cases, employees submitted expenses for personal country-club memberships that were not authorized under the individuals employment contracts. Owen said her audits showed that the company had paid for many things that were not authorized, but no efforts were made to seek reimbursement from employees. These activities were not confined to senior management, she said. Owens audits also turned up evidence of kickbacks involving employees in both California and Denver, she said, with regard to warehousing and construction contracts. Owen said she repeatedly brought these and other questionable activities uncovered in her audits to senior managers, including Beans and Herbst, the companys chief financial officer and head of the audit committee of the board of directors. "They didnt really want to hear about it," she said. "I refute any allegations that our financial reporting was inaccurate," Herbst said in a brief phone interview. "If there was something else going on and I have no reason to believe there was then I knew nothing about it. I believe our financial reporting was absolutely accurate." Herbst denied that he ever sought to suppress or downplay internal audit reports. "That is categorically not true," he said. "Beyond that I have no comment." But it was Herbst who served with Bryan on the audit committee and came to ICG from a company owned by Bryans brother who told Owen to "tone down" her audits, Owen said. "I thought that Bill Beans was interested in what we had found and was going to do something about it," she said. "But nothing happened." Owen said she had been hopeful that the investment in ICG by Malone and Hicks would result in a "turnaround" of the vast internal problems at ICG. But she said the two never looked at the internal audits or sought information about the problems inside. Owen took a voluntary layoff in January.
But no one, company employees said, seemed interested in putting the brakes on in any way.