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CWA Applauds Measure by Rep. Meeks to Stop Tax Windfalls for Corporate Criminals
Washington, D.C. – The Communications Workers of America commends Rep. Gregory Meeks (D-N.Y.) for introducing legislation to require WorldCom – and other corporate criminals – to pay any tax refunds received from their fraud to the victims of that fraud.
MCI WorldCom committed the largest corporate fraud in U.S. history of at least $11 billion. Its fraud-induced bankruptcy cost investors more than $200 billion, three times the size of the Enron debacle. Workers' pension funds lost more than $70 billion from WorldCom's illegal activity.
Despite the magnitude of this fraud, MCI WorldCom is seeking a $300 million tax refund on its fraudulently overstated earnings.
It is appropriate for Congress to act to ensure that victims of corporate fraud receive restitution and that corporate criminals do not benefit from their crime. This legislation sends the right message that corporate crime does not pay.
MCI WorldCom agreed to pay a $750 million fine to settle its fraud case with the Securities and Exchange Commission. This bill would require MCI WorldCom to supplement that paltry penalty with the $300 million tax refund. Even with this additional amount, victims of MCI WorldCom's fraud will receive only a penny for every dollar they lost.
CWA maintains that the inadequate SEC settlement will give MCI an unfair competitive advantage, causing further destabilization and job loss throughout the telecom industry.
WorldCom's fortunes started to unravel earlier this month when the General Services Administration announced the suspension of the company from receiving government contracts. Also this month, the Justice Department announced it is looking into allegations that MCI/WorldCom evaded paying billions of dollars in access fees to local phone companies. On July 30 the Federal Communications Commission launched its own probe into the matter. The FCC regulates access fees and has the power to fine WorldCom if it finds wrongdoing. In addition, House Energy Committee Chair Rep. W. J. "Billy" Tauzin plans to conduct a hearing on the charges in September.
MCI WorldCom committed the largest corporate fraud in U.S. history of at least $11 billion. Its fraud-induced bankruptcy cost investors more than $200 billion, three times the size of the Enron debacle. Workers' pension funds lost more than $70 billion from WorldCom's illegal activity.
Despite the magnitude of this fraud, MCI WorldCom is seeking a $300 million tax refund on its fraudulently overstated earnings.
It is appropriate for Congress to act to ensure that victims of corporate fraud receive restitution and that corporate criminals do not benefit from their crime. This legislation sends the right message that corporate crime does not pay.
MCI WorldCom agreed to pay a $750 million fine to settle its fraud case with the Securities and Exchange Commission. This bill would require MCI WorldCom to supplement that paltry penalty with the $300 million tax refund. Even with this additional amount, victims of MCI WorldCom's fraud will receive only a penny for every dollar they lost.
CWA maintains that the inadequate SEC settlement will give MCI an unfair competitive advantage, causing further destabilization and job loss throughout the telecom industry.
WorldCom's fortunes started to unravel earlier this month when the General Services Administration announced the suspension of the company from receiving government contracts. Also this month, the Justice Department announced it is looking into allegations that MCI/WorldCom evaded paying billions of dollars in access fees to local phone companies. On July 30 the Federal Communications Commission launched its own probe into the matter. The FCC regulates access fees and has the power to fine WorldCom if it finds wrongdoing. In addition, House Energy Committee Chair Rep. W. J. "Billy" Tauzin plans to conduct a hearing on the charges in September.