Feds Not Pleased By Oklahoma's Attack On MCI

by Mike Godfrey, for LawAndTax-News.com, New York

29 August 2003

As expected, Oklahoma's state attorney general, Drew Edmondson, yesterday filed a criminal complaint against former WorldCom and six of its executives, saying at a press conference that federal sanctions against WorldCom and its executives have been inadequate. "I have not seen any of these officers filing for personal bankruptcy," Mr. Edmondson said. "They have not been punished and they will be punished."

The state attorney general said the executives named in the complaint, Bernard Ebbers, Scott D. Sullivan, David F. Myers, Buford T. Yates, Betty L. Vinson and Troy M. Normand, have one week to turn themselves in or he would seek extradition.

Federal authorities reacted negatively to Oklahoma's action, saying that their investigation into WorldCom’s US$11bn accounting fraud could be jeopardised. The US Securities and Exchange Commission said: “We hope that the Oklahoma attorney-general's actions will not jeopardise the criminal cases being prosecuted by the US Attorney's Office [in Manhattan] or the ongoing investigations.”

New management at WorldCom, now renamed MCI, has been working with the courts and the federal government to re-establish the company, and just on Monday agreed to accept a stiff new code of corporate governance. “Today's action against the company would only punish our 20 million customers and 55,000 employees, 2,000 of which whom work in Oklahoma,” said Stasia Kelly, the company’s general counsel. On a conference call with reporters Mr Edmondson said the charges were “not intended to punish existing employees”.

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