WORLDCOM.GOV

Isn't MCI-don't-call-me-WorldCom the least bit embarrassed to be joining a lawsuit against SBC for allegedly using its political influence to wrangle a wholesale price hike out of the Illinois legislature? Come on — political influence is the only thing keeping MCI from suffering the fate that Verizon and others wish upon it: liquidation. If it weren't for the General Services Administration, the Defense Department and other federal agencies vociferously supporting WorldCom after it went bankrupt and continuing to award it long-term contracts, maybe the SEC might have had the courage not just to set a record with its $500 million fine, but to set precedent.

Bill Daley may have justified his SBC existence with his political maneuver in Illinois, but he ain't got nothin' on whoever is influencing the federal government to prop up MCI. Perhaps now we can start to understand where all that money went.

Since WorldCom filed for bankruptcy protection last year, its revenue from federal contracts has grown by approximately $270 million — despite the GSA's promise to review the awarding of taxpayer-supported contracts to MCI. Last week, the National Oceanic & Atmospheric Administration awarded the new MCI a seven-year contract to provide satellite data communications. In April, the Defense Information Systems Agency awarded MCI a 10-year, $450 million contract for its Defense Research and Engineering Network. And that wireless contract in Iraq? No political influence there.

Such activity has not gone unnoticed. Senate Governmental Affairs Committee Chairman Susan Collins, R-Maine, last Thursday launched an investigation into the GSA's decision to continue doing business with WorldCom. However, unless she can wrap up her investigation in the next few weeks before the U.S. District Court rules on the settlement, it could be too little, too late.

Which brings us back to Verizon. After several years of outrageousness — outrageous spending, outrageous expectations, outrageous fortunes and outrageous conduct and even the “outrageous sense of urgency” with which MCI CEO Michael Capellas has tried to fill his employees — why is Verizon's proposal calling for the liquidation of WorldCom considered so outrageous?

If the true priority of the courts is to repay investors, liquidation would likely bring more than the $500 million the SEC is asking for. The loss of 55,000 jobs would be unfortunate, but MCI is not out of the woods yet, and those jobs could be lost soon enough without anyone but the lawyers benefiting.

Even if MCI satisfies the district court's demand for substantial change in corporate governance, and the SEC provides a fair plan for distributing the $500 million, and the court decides to uphold the settlement and put the matter to rest, the subsequent civil suits against MCI could make it all for naught. Civil lawyers were investors, too.