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For Immediate Release: Contact: Leora Hanser
Monday, June 9, 2003 (212) 490-0001
Christine Kraly
(703) 276-3258
NEW YORK CITY - Rep. Gregory Meeks (6-NY), former Public Advocate Mark Green, and three other experts, participating in a New Democracy Project/Demos panel in New York City today, urged the federal judge reviewing the WorldCom-MCI settlement with the Securities and Exchange Commission (SEC) to overturn the deal in favor of more stringent remedies that would send a clear signal to "morally challenged CEOs and concerned shareholders."
The five stakeholders representing consumers, labor, shareholders and Congress spoke out at a "Forum on Corporate Accountability: The SEC-MCI Proposed Settlement - Perspectives on Adequacy." The panelists participating in the forum were Mark Green, President, New Democracy Project (NDP); U.S. Rep. Gregory W. Meeks (6-NY); Debbie Goldman, Senior Policy Analyst, Communications Workers of America (CWA), Rev. Robert Chase, Director, Office of Communications, United Church of Christ (UCC); and James K. Glassman, Resident Fellow, American Enterprise Institute (AEI) and host of TechCentralStation.com.
All of the speakers agreed on the need for tougher action to be applied against WorldCom-MCI, which has admitted to committing more than $11 billion worth of accounting fraud. In his remarks, Rep. Meeks said: "I am very troubled and disappointed with the proposed settlement between the SEC and MCI WorldCom. The settlement agreement is grossly inadequate, a miscarriage of justice, and insulting for the 950,000 New York public sector employees whose pension was victimized by MCI WorldCom's fraud. Meanwhile, the company is using bankruptcy to reemerge as a stronger competitor, debt-free with its illegal gains. Reorganization under the bankruptcy laws should not apply when the assets are the product of criminal activities. Our bankruptcy laws should not be a vehicle for laundering stolen goods. Besides filing a petition with the U.S. District Court in New York last week, I am working on a legislative solution before this becomes a classic case that illustrates how crime does pay!""
Mark Green said: "WorldCom shouldn't be allowed to profit from its own illegality. The proposed $500 million fine certainly sounds large - but is the equivalent of less than one week of revenue. The fine should fit the crime. Judge Rakoff should reject the proposed weak settlement and impose significant and meaningful penalties. He should triple the fine, reconsider all government contracts and insure that shareholders are the first to be repaid."
The Rev. Robert Chase commented: "It is because of a core belief that 'character counts' that the Office of Communications of the United Church of Christ has come out so strongly in opposition to the notion that WorldCom (now known as MCI), home to the largest accounting scandal in United States history, should be let off the hook with little more than a slap on the wrist. Instead, we believe that, if you are a steward of the Information Age, you are held to a high standard. When you utterly fail to meet that standard - as was so clearly the case with MCI/WorldCom - you don't get to be an Information Age steward any more."
AEI Resident Fellow Glassman said: "WorldCom/MCI's assets should be sold. This won't mean that thousands of jobs, millions of customers and billions of dollars' worth of equipment will disappear into thin air. To the contrary. In a free-market system, the valuable assets of a failed firm (human and physical) move from weak hands to strong hands. The great economist Joseph Schumpeter called this process 'creative destruction.' Zombies like WorldCom/MCI are a drag on any economy."
CWA Senior Policy Analyst Goldman said: "The $500 million proposed penalty is a slap on the wrist to WorldCom, a company that committed the largest case of corporate fraud in U.S. history. It provides less than a penny on the dollar to investors who lost $180 billion when WorldCom went bankrupt. This corruption deprived millions of working people and retirees of their retirement income, and cost tens of thousands of workers lost their jobs. The Judge must not rush to judgment before all the facts are in on the depth and breadth of this enormous fraud."
The participants in today's panel have been active in a variety of ways in the wake of the WorldCom/MCI scandal. CWA was among the very first organizations to call for the debarment of WorldCom from future federal contracts. During the same month, the UCC petitioned the Federal Communications Commission for formal rulemaking to prevent future WorldCom-like abuses in the telecommunications industry.
The New Democracy Project (NDP) is a national and urban affairs institute emphasizing five broad areas: economic growth and fairness, policing and justice, the environment, education, and democracy. NDP not only produces creative research but also is a conveyor belt of ideas and initiatives to scholars, constituency groups, the media, elected officials and citizens. To affect public conversation and policy, NDP therefore is both an institute and a network. Its goal: to advance a "smarter democracy."
Demos is a non-partisan, non-profit public policy research and advocacy organization based in New York City. Demos is committed to a long-term effort to reframe and redesign policy and politics to meet the complex challenges of the 21st century. Demos seeks to bring everyone into the life of American democracy and to achieve a broadly shared prosperity characterized by greater opportunity and less disparity. Founded in 1999, Demos combines research with advocacy - melding the commitment to ideas of a think tank with the organizing strategies of an advocacy group.
Rev. Robert Chase is the Director of The Office of Communication of the United Church of Christ, Inc. - the media advocacy arm of the United Church of Christ, a mainline Protestant denomination of 1.4 million members. The United Church of Christ was the first voice to demand that broadcasters who use the public airwaves have a responsibility to operate in the public interest, and continues to fight for corporate responsibility and accountability to the public. In response to the scandals in the telecommunications industry The UCC has petitioned the FCC to develop rulemaking on "Corporate Character" provisions for companies that have a license to use the public airwaves.
Debbie Goldman is a Research Economist with the Communications Workers of America where she is responsible for regulatory affairs and telecommunications policy and provides support for collective bargaining and organizing. The Communications Workers of America represent 700,000 women and men working in telecommunications, broadcasting, publishing, health care, government, manufacturing, airlines and other industries. Prior to her tenure at CWA, Ms. Goldman worked at the Public Employee Department of the AFL-CIO and at the Service Employees International Union. Ms. Goldman serves as Policy Chair of the Alliance for Public Technology, a coalition of individuals and organizations supporting universal affordable access to broadband technology.
James K. Glassman is Resident Fellow, American Enterprise Institute, syndicated columnist with the Washington Post, and host of TechCentralStation.com. At AEI, he researches Social Security, economics, technology, politics, federal budget, interest rates, stock market, taxes, and education. He is also the author of The Secret Code of the Superior Investor. Mr. Glassman is also a member of the President's Council on The 21st Century Workforce. His career has afforded him the opportunity to host PBS TechnoPolitics from 1995-1999, moderate CNN's Capital Gang Sunday from 1995-1998, and edit Roll Call from 1987 - 1993.
CONTACT: Leora Hanser, New Democracy Project, (212) 490-0001 or leora@newdemocracyproject.com; or Christine Kraly, (703) 276-3258 or ckraly@hastingsgroup.com.
EDITOR'S NOTES: Copies of speaker statements will be available at the
event.
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