Stolen Without A Gun

by Walter Pavlo Jr.

Even as bad debt escalated, the department had posted writeoffs of just $10 million in 1995, or $2 million less than the year before.1 Now, eight months into 1996, Carrier Finance revenues were forecast to nearly double for the year to $2.1 billion.2 Under an honest accounting of the most recent figures, bad debt would jump fourteen-fold to $142 million, eight percent of total revenues, and a four-fold increase over the old benchmark. The total included $64 million in “actuals,” meaning debt already recognized as uncollectible; $51 million in “exposure,” representing zombie companies that were dead or dying but not officially delinquent; and Hi-Rim’s $27 million that MCI still carried on its books even though it had been off MCI’s network for five months,3 had filed a breach of contract claim against MCI, and was owned by Teletek, a company under grand jury and SEC investigation.