MCI said it reached a settlement with Okla. Attorney Gen. Drew Ed...

MCI said it reached a settlement with Okla. Attorney Gen. Drew Edmondson, who agreed to drop criminal charges of securities fraud against the company. Edmondson last year (CD Aug 28 p1) filed felony charges against MCI/WorldCom and 6 former employees in what was believed to be the first criminal action against the company. MCI and others were charged in Okla. County Dist. Court with 15 counts of violating the Okla. Securities Act. However, the Okla. AG’s office said Fri. it would drop the charges on the condition that MCI would add 1,600 jobs over the next 10 years at its Tulsa facility -- one of the company’s largest regional hubs -- and assist in prosecuting its former executives. “While the settlement contains a potential financial component tied to the job creation provisions, MCI fully intends to satisfy its agreement with the Attorney General by adding jobs in Oklahoma,” said MCI Deputy Gen. Counsel Carol Petren. Edmondson said the disposition of the state’s case against the company would result in more than $100 million in positive economic impact. “Since WorldCom’s collapse, a new company has emerged from the rubble,” he said: “It was never our intention to put the company out of business, and MCI has taken significant steps to clean its own house.” Edmondson said Okla. pension funds with current MCI holdings would suffer if the company received a criminal conviction. A deferred prosecution agreement allows the state to recoup certain losses and protects the pension funds’ current holdings, he said. “The deferred prosecution of WorldCom will have a positive impact on the community in connection with the substantial employment MCI continues to provide to the Tulsa area,” the agreement said. Edmondson said the agreement was “in the best interests” of the state: “If MCI loses its licenses to operate in Oklahoma, its nationwide calling plans are invalid. If MCI can’t offer nationwide calling, they can’t compete in today’s communications marketplace, and the Oklahoma pension funds holding MCI bonds take another hit.” Under the agreement, MCI will create 160 new jobs each year for 10 years. The average annual wage of the jobs is set at $35,000, to a total of $56 million in new income in the 10th year. Over the 10 years, the company will have paid $308 million in new salaries. The Dept. of Commerce estimated the agreement would result in: (1) $12.3 million in net direct benefit to state revenue in 10 years. (2) $112 million in annual payroll due to direct and indirect job growth. (3) $2 million positive annual impact on city and county revenue.