WorldCom officials shifted accounts as early as 2000

WASHINGTON -- Officials at WorldCom Inc. shifted accounts around as early as 2000, well before the nearly $4 billion in accounting irregularities that led the government to file civil fraud charges against the company, documents turned over to a House investigative panel show.

Several managers at WorldCom discovered the earlier juggling of the books, tried to do something about it and were brushed off by senior executives, Rep. Billy Tauzin, R-La., chairman of the House Energy and Commerce Committee, said Sunday.

The latest revelation concerning one of the biggest accounting scandals battering investors' confidence came three days after Tauzin said new information indicated that WorldCom founder and former chief executive Bernard Ebbers was aware of the improper bookkeeping disclosed last month.

Ebbers' attorney has insisted he had no knowledge of the transactions.

Documents turned over

Committee investigators received five boxes of documents from WorldCom on Thursday, the deadline set by the panel in its request for the records.

"There's quite an insight in these documents as to how corporate greed took over" in 2000 and the company started disguising expenses as capital expenditures to make itself appear more profitable, Tauzin said on ABC's "This Week."

"The documents also reveal a strange pattern of people inside the corporation discovering it, trying to do something about it and ultimately failing until recently," Tauzin said.

One of those was WorldCom internal auditor Cynthia Cooper, who met in 2000 with a finance department employee named Troy Normand. Normand expressed concerns to her about "aggressive accounting" that had caused him to consider resigning, Cooper wrote in a memo on their meeting.

Normand took his concerns to then-chief financial officer Scott Sullivan and company comptroller David Myers, both of whom assured him that "everything's fine," Tauzin said.

Myers, who was the only person apart from Sullivan to have direct control over WorldCom's books, resigned to avoid being fired by the company when the board learned of the massive misstatement.

Sullivan and Ebbers, who were both ousted from the company, invoked their Fifth Amendment right against self-incrimination at a congressional hearing last Monday and refused to answer lawmakers' questions. Ebbers cited current investigations by the Justice Department and the Securities and Exchange Commission. The SEC filed fraud charges against WorldCom on June 26.

Cooper, who was asked to testify at the hearing but did not appear, reportedly has been providing information to the Justice Department in its criminal investigation of the company.