AOL, Colburn Part Ways
Employee at center of federal investigations locked out of his office by AOL officials. AOL Adds to German Presence
David M. Colburn, who negotiated many of America Online’s biggest advertising and marketing deals that are now the subject of investigations by the Securities and Exchange Commission and the Department of Justice, has left AOL. According to a Washington Post account, Colburn was locked out of his Dulles, Va., office on Friday.
The newspaper reported in July that Colburn was relieved of his day-to-day responsibilities for business affairs and shifted him to a strategic planning job. Colburn’s lockout came just days before Wednesday’s deadline for corporate executives to vouch for their accounting statements.
In a two-part story, the Post raised questions about how AOL accounted for advertising revenues as the dot-com collapse was spreading. The report referenced hundreds of pages of confidential AOL documents in its probe of whether it boosted revenue using a series of unconventional deals from 2000 to 2002. The company defended its accounting practices as proper and said its auditor had looked into the matter and signed off on the accounting.
Richard D. Parsons, chief executive of parent company AOL Time Warner Inc. , claims the deals were made based on accepted accounting principles. Parsons also said the deals were reviewed by the company’s outside auditor.
Parsons said the company would cooperate with the SEC probe. In a statement last month, AOL/TW said it would also cooperate with the DOJ. “If the Justice Department wants to look at the facts, of course we will cooperate with them too, as we would with any other appropriate government agency,” the media giant said. “Our accounting is appropriate and in accordance with generally accepted accounting principles, and our auditors, Ernst & Young, have repeatedly confirmed that.”
The newspaper’s study reported that AOL had booked revenue from ads sold for eBay and renegotiated long-term advertising contracts to recognize revenue more quickly.
Colburn was unavailable for comment and when contacted in person by the Post at his home in the Maryland suburbs, Colburn refused to give a statement.
