Missouri to get $24 million in MCI settlement

JEFFERSON CITY, Mo. -- Missouri will get $24.2 million as part of a multistate settlement with telecommunications company MCI Inc. over disputed state income taxes.

The settlement stems from MCI-WorldCom tax filings from 1999-2002, when various states alleged that money transfers between MCI subsidiaries were illegally classified as a business expense exempt from state tax laws.

The telecommunications company admitted no wrongdoing in the settlement.

But MCI agreed to pay $315 million to 15 states and the District of Columbia. It reached a separate $16 million settlement with North Carolina.

The settlement was filed earlier this week in U.S. Bankruptcy Court in New York. The Missouri Department of Revenue publicized its share of the money Friday.

The money constitutes 78 percent of the amount of taxes and interest that state investigators claimed was owed by the company.

State authorities said they were alerted to the alleged scheme by disaffected WorldCom bondholders who were seeking an ally during the WorldCom Inc. bankruptcy case in 2003.

The government accused WorldCom officials of committing an $11 billion fraud by making adjustments to the company's financial statements to give investors a misleading picture of the company's performance. WorldCom declared bankruptcy and is now operating under the name MCI.