WASHINGTON (Reuters) -
A congressional committee Wednesday demanded to know how thoroughly the Securities and Exchange Commission has been checking the books of five U.S. corporations that in recent weeks have been rocked by scandal.
In a letter to SEC Chairman Harvey Pitt, Republican leaders of the House Energy and Commerce Committee requested SEC records and a report by July 9 on its policing of WorldCom Inc. (WCOME: down $0.05 to $0.20, Research, Estimates), Tyco International Ltd. (TYC: up $0.25 to $13.66, Research, Estimates), Global Crossing Ltd. (GBLXQ: Research, Estimates), Xerox Corp. (XRX: down $0.42 to $6.05, Research, Estimates), and Qwest Communications International Inc. (Q: up $0.15 to $1.97, Research, Estimates)
"The committee is profoundly disturbed about the recent string of allegations that companies...may have engaged in questionable accounting practices," wrote Rep. Billy Tauzin and Rep. James Greenwood in the letter to Pitt.
"We are conducting a full review of the issues surrounding the allegations of accounting improprieties and financial misrepresentation that have arisen in connection with the above-mentioned companies," the lawmakers said.
Tauzin and Greenwood asked Pitt whether the SEC reviewed any of the five companies' quarterly and annual financial reports from January 1998 until the date when the SEC launched investigations of each company.
They also asked about any SEC inquiries involving the five companies since 1998 and their outcomes, as well as for various records and correspondence involving the companies.
Finally, the lawmakers asked the commission to explain how it decides to investigate companies and how it decides which companies' financial records to review closely.
Louisiana's Tauzin and Pennsylvania's Greenwood presided over the most dramatic of the numerous congressional hearings held earlier this year, into the troubles of Enron Corp. (ENRNQ: Research, Estimates) and its auditor Andersen (ANDR: down $0.51 to $7.49, Research, Estimates).
WorldCom, the second-largest U.S. long-distance telephone carrier, last week admitted it improperly accounted for $3.85 billion in expenses for five quarters starting in 2001.
Copier maker Xerox said last week it would restate five years of results to reclassify $6 billion in revenues.
Tyco, a conglomerate, is under investigation into whether executives used corporate cash to buy art and a home. Telecom concerns Qwest and Global Crossing also face SEC probes.
Meanwhile, allegations of corporations shredding important documents have become more frequent amid recent accounting scandals.
The U.S. Justice Department, already investigating claims of improper accounting at Global Crossing Ltd. last month, is now probing claims of document shredding there, the company said Wednesday.
The U.S. Bankruptcy Court in Manhattan initially sealed the court documents pending a probe by the parties, but allowed them to be unsealed June 21 after Global Crossing said it settled the matter with Ohio State Retirement Systems.
At that time, Global Crossing said it had conducted an investigation and concluded there was no merit to the allegations. It did say it had found isolated incidents of shredding, but none of those documents were relevant to pending litigation or governmental investigations.
-- Reuters contributed to this story.
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