Members of Congress are angry about the accounting scandal at the telecommunications company WorldCom. The revelations come as Congress prepares to speed up action on legislation aimed at reforming the accounting industry in the wake of the collapse of another large U.S. corporation, Enron.
As news of the extent of the WorldCom scandal reached Capitol Hill, lawmakers took to the floor of the House of Representatives and Senate to vent their anger and frustration. "There has now been a roll call of the corporate elite, violating the laws of this nation, and throwing America's investment community into a sense of doubt and shame," said Texas Democrat Sheila Jackson Lee.
Another voice was Congressman Ronnie Shows, whose district in the southern state of Mississippi includes the town of Clinton, the home base of WorldCom. Calling WorldCom the "latest culprit in a long line of corporate scandals that has victimized average Americans," Congressman Shows said, "The revelation that WorldCom hid almost $4 billion in expenses from its employees and shareholders has turned upside down the lives of thousands of my constituents, and many thousands more across the country."
The Chairman of the House Energy and Commerce Committee, Republican Billy Tauzin, announced an investigation into all facts surrounding WorldCom's nearly four-billion dollar restatement of earnings and losses. He called the WorldCom situation "eerily similar" to the accounting disaster that brought down Enron.
In the Senate, Democratic majority leader Tom Daschle promised to speed up consideration of a bill on accounting reform. It was the collapse of Enron, and the role played by the accounting firm Arthur Andersen, that spurred such legislation.
Some of the harshest congressional criticism focused on the U.S. Securities and Exchange Commission (SEC), with House and Senate lawmakers asking why it did not detect problems at WorldCom.
Democratic Congressman Peter DeFazio lashed out at SEC chairman Harvey Pitt. "We have Harvey Pitt, appointed by the President of the United States George Bush, to be head of the Securities and Exchange Commission. He is the former lawyer for the securities companies that are now defrauding the American people."
Late Wednesday, SEC chairman Harvey Pitt announced the filing of fraud charges against WorldCom in federal court in New York, and rejected criticisms of his leadership of the commission.
The House of Representatives had voted earlier to increase the budget of the SEC, with lawmakers saying the commission needed additional resources to adequately do its job of protecting investors.