As WorldCom struggles to repair the damage wrought by its massive accounting fraud and subsequent bankruptcy, it continues to be dogged by new allegations of wrongdoing. Today, federal lawmakers who oversee telecommunications policy demanded to see documents pertaining to accusations that WorldCom diverted calls to avoid paying fees to other telephone companies.
Now doing business as MCI—illustrating one of many attempts to repair the damage to its name—the company is accused of rerouting calls and disguising their origins to avoid paying access charges to other carriers. In a filing in the bankruptcy proceeding this week, AT&T Corp. charged that WorldCom diverted U.S. calls to Canada to avoid paying connection charges.
Today, Reps. Billy Tauzin, R-La., and Fred Upton, R-Mich., directed the Federal Communications Commission to hand over any records pertaining to the alleged access charge violations. In a letter to FCC Chairman Michael Powell, the lawmakers asked for information on what the commission will do to investigate the allegations.
This week, in response to the new allegations, WorldCom hired another law firm, Gibson, Dunn & Crutcher LLP, to conduct a review. Company officials said publicly that all U.S. government secure calls on its network have been handled properly. The U.S. government is WorldComs largest customer.
Officials of rival telephone carriers, including Verizon Communications Inc., have complained to lawmakers that if WorldComs bankruptcy plan—complete with the dismissal of more than $40 billion in debt—is approved, the company will emerge at a significant competitive advantage relative to carriers that have not been accused of fraud and have not filed for bankruptcy protection.
WorldCom officials have said they hope to emerge from bankruptcy in the fall.