About | HeinOnline Law Journal Library | HeinOnline Law Journal Library | HeinOnline
LOG IN
LOG IN

GAO-04-741R 1 (2004-05-26)

handle is hein.gao/gaobaamlx0001 and id is 1 raw text is: I Accountability * Integrity * Reliability United States General Accounting Office Washington, DC 20548 May 26, 2004 The Honorable Ernest J. Istook, Jr. Chairman The Honorable John W. Olver Ranking Minority Member Subcommittee on Transportation, Treasury, and Independent Agencies Committee on Appropriations House of Representatives Subject: GSA Actions Leading to Proposed Debarment of WorldCom On June 25, 2002, WorldCom, Inc.,' announced its intention to restate its financial statements for 2001 and the first quarter of 2002, reducing previously reported earnings by nearly $4 billion. WorldCom's announcement sparked a series of investigations by the Securities and Exchange Commission (SEC), the Department of Justice, and WorldCom's Board of Directors, among others, and eventually resulted in criminal charges against six of its corporate officials. WorldCom filed for bankruptcy protection in July 2002, and, over the next several months, announced restatements for additional periods.2 On July 31, 2003-over a year after WorldCom first announced its intention to restate its earnings-the General Services Administration (GSA) formally proposed the company for debarment, making the company ineligible for future government contracts. When WorldCom consented to a 3-year administrative agreement allowing GSA to continue monitoring the company's conduct, GSA terminated the debarment proceedings on January 7, 2004. House Report 108-243, which accompanied the Transportation, Treasury, and Independent Agencies Appropriations Act, 2004, required us to review the actions GSA took between WorldCom's June 2002 announcement and GSA's July 2003 decision to propose the company for debarment. As discussed with your staff, we 'WorldCom, which now does business under the MCI brand name, is a global communications provider of voice, network, and data services to over 20 million residential, business, and government customers. 'In March 2004, WorldCom filed its restatements for 2000 and 2001 with the SEC. According to a WorldCom news release, the portion of the restatements attributable to the accounting irregularities that prompted the investigations totaled $8.8 billion for those 2 years. The restatements also included $5.8 billion in reductions to previously reported earnings for the value of acquired assets, and $59.8 billion in reductions to the value of numerous companies WorldCom had previously acquired, for a total restatement of $74.4 billion. GAO-04-741R WorldCom Debarment

What Is HeinOnline?

HeinOnline is a subscription-based resource containing thousands of academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.



Contact us for annual subscription options:

Contact Us

Already a HeinOnline Subscriber?

Log In

profiles profiles most