RETURNING CONGRESS TO FOCUS ON WORLDCOM AND HOMELAND SECURITY

Congress returns from week-long recess today (Mon.), immediately focusing on WorldCom scandal. House Financial Services Committee will hear former WorldCom CEO Bernard Ebbers and current CEO John Sidgmore. Hearing, titled “Wrong Numbers: The Accounting Problems at WorldCom,” 1 p.m. , Rm. 2128, Rayburn Bldg., also will feature: (1) Scott Sullivan, former CFO who was fired after scandal broke. (2) David Myers, former senior vp-controller, who resigned under similar circumstances. (3) Melvin Dick, former Arthur Andersen auditor. (4) Jack Grubman, Salomon Smith Barney telecom analyst. (5) Bert Roberts, WorldCom board chmn.

Financial Services Committee spokeswoman said hearing would focus on accounting practices, and telecom regulations probably wouldn’t be a focus. But some in Congress have raised concerns about how WorldCom scandal would affect telecom and Internet industries. House Commerce Investigations Subcommittee in its investigation has requested scores of documents from WorldCom and SEC, including transactions, filings and list of bonuses received by senior management. Rep. Dingell (Mich.), ranking Democrat on the House Commerce Committee, wrote Committee Chmn. Tauzin (R-La.) to urge that investigation determine whether current telecom policy, including industry consolidation, played role in WorldCom’s problems. Rep. Markey (Mass.), ranking Democrat on House Telecom & Internet Subcommittee, wrote FCC Chmn. Powell requesting information about Commission’s plans to ensure continued service should WorldCom, leading Internet backbone provider, go bankrupt.

Congress will address financial accounting issues through other hearings and legislation. Senate will consider proposed “Public Company Accounting Reform and Investor Protection Act of 2002” (S-2673), which would increase accounting standards through the creation of Public Company Accounting Oversight Board. Senate also could consider legislation that would increase penalties for accounting fraud. Senate Majority Leader Daschle (D-S.D.) and Senate Judiciary Committee Chmn. Leahy (D-Vt.) urged President Bush to support proposed “Corporate & Criminal Fraud Accountability Act” (S-2010), which would make it felony, punishable by up to 10 years in prison, to engage in any scheme that defrauded shareholders in publicly traded company. House Commerce Committee will consider financial accounting overhaul. Proposed “Financial Accounting Standards Board (FASB) Act” (HR-5058), by House Commerce Consumer Protection Chmn. Stearns (R-Fla.), is designed to strengthen FASB. Markup of HR-5058 is scheduled for July 10, 3 p.m., Rm. 2123, Rayburn Bldg.

Creation of Homeland Security Dept. also will command congressional attention. Several committees will examine creation of new Dept. Telecom and Internet issues will be addressed in at least one hearing, to be held by House Commerce Oversight Subcommittee July 9, 9 a.m., Rm. 2123, Rayburn Bldg. Hearing, titled “Creating the Dept. of Homeland Security: Consideration of the Administration’s Proposal,” will feature BellSouth Chief Technology Officer Bill Smith. Smith, who also is pres., BellSouth Interconnection Services, will testify on impact of govt. requests for infrastructure information on BellSouth and ability to keep sensitive information from being released to terrorists and competitors. House International Relations Committee will mark up HR-5005, bill that would create Homeland Security Dept., in hearing July 10, 9:30 a.m., Rm. 2172, Rayburn Bldg. Justice Dept.’s role in homeland security will be examined in Senate Judiciary Committee hearing July 11 at 9 a.m., Rm. 106, Dirksen Bldg. Senate Committee on Environment will concentrate on homeland security in July 10 hearing at 2 p.m., Rm. 406, Dirksen Bldg. House Armed Services Committee will also examine homeland security and terrorism in 2 hearings this week: (1) Full committee will mark up HR-5005, July 10, 10 a.m., Rm. 2118, Rayburn Bldg. (2) Special oversight panel on terrorism will hear testimony on Army and Air Force initiatives to improve antiterrorism and counterterrorism operations, July 11, 8:30 a.m., Rm. 2212, Rayburn Bldg.

Senate Judiciary Oversight Subcommittee will examine FBI’s information technology (IT) system in hearing titled “FBI Computers: 1992 Hardware -- 2002 Problems” July 9, 11 a.m., Rm. 226, Dirksen Bldg. At 2:30 p.m. same day in same room, Senate Judiciary Technology Subcommittee plans a hearing on “Identity Theft Penalty Enhancement Act of 2002” (S-2541) by Subcommittee Chmn. Feinstein (D-Cal.) on strengthening identity (ID) theft penalties. Internet has been associated with some ID theft concerns.

House Commerce Telecom Subcommittee will consider state of public broadcasting July 10, 10 a.m., Rm. 2322, Rayburn Bldg., focusing on CPB, and will study public broadcasting’s role in “the digital era.” Witness list hasn’t been announced, but John Lawson, pres. of APTS, said he would testify on status of digital conversion.