WASHINGTON, DC - The senior activist Gray Panthers group today called on Attorneys General across the country to prosecute WorldCom/MCI for its elaborate scheme to evade state taxes by shifting income away from states to a Delaware based subsidiary that pays no state income tax.

In federal bankruptcy court filings, it was revealed this summer that MCI set up a Delaware company that from 1999 to 2001 levied as much as $19 billion in royalty charges against subsidiaries in various states for use of the company's brand and intellectual property. These royalties were never actually paid, and apparently often exceeded the business income stream that MCI and its subsidiaries actually derived from the trademarks. As a result, the subsidiaries could deduct those sham royalty payments as an expense and lower their tax liabilities in several U.S. states. More than 20 states have filed notice with the court that they intend to pursue tax audits with the company to recover unpaid corporate income tax revenue.

The Gray Panthers Corporate Accountability Project Director Will Thomas said: "This is really a question of fairness. In these tough economic times, it is unconscionable that corporate criminals like WorldCom/MCI are not held accountable for these elaborate tax evasion schemes, especially in the wake of the dramatic suffering inflicted upon its pension funds and citizens by MCI's criminal behavior."

MCI committed the largest fraud in American history, is currently under felony indictment in Oklahoma, and has been suspended from receiving future Federal contracts. It is estimated that pension funds in 40 U.S. states lost over $4.03 billion as a result of WorldCom/MCI's massive accounting scheme.

Thomas added: "We urge Attorneys General to hold WorldCom/MCI accountable for violating the law. Seniors across the United States are disgusted with corporate scofflaws like WorldCom/MCI that shirk their responsibilities to pay taxes and don't care about the health and welfare of the communities in which they operate. It's time for action -- it's time for some justice."

States that have indicated they will conduct audits include: Alabama, Arkansas, Connecticut, Florida, Georgia, Iowa, Illinois, Maine, Massachusetts, New Hampshire, New Mexico, New York, North Carolina, Oregon, Pennsylvania, Texas, South Carolina, Tennessee, Virginia, Wisconsin.

The Gray Panthers

The Gray Panthers is an inter-generational advocacy organization with over 40,000 activists working together for social and economic justice. Gray Panthers' issues include universal health care, jobs with a living wage and the right to organize, preservation of Social Security, affordable housing, access to quality education, economic justice, environment, peace, and challenging ageism, sexism, and racism.

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