More people at WorldCom Inc. (WCOME) knew about the accounting irregularities and tried to identify the problems only to be rebuffed by the company's then chief financial officer, a spokesman for congressional investigators said on Friday.

Scott Sullivan was the CFO at WorldCom until June 25 when he was fired for his role in transferring $3.85 billion in expenses to capital spending accounts over 15 months starting in 2001, a move that spread out the impact of the expenses on earnings over a longer period of time.

The documents were uncovered in the first of five boxes of documents WorldCom turned over to investigators for the U.S. House Energy and Commerce Committee, said panel spokesman Ken Johnson.

"There is no question, absolutely none, that a number of middle management people at WorldCom had a very good idea that someone was cooking the books," he said. "It's clear to us that they tried to get to the bottom of it only to be rebuffed by Scott Sullivan."

Johnson declined to provide further details. Sullivan's lawyer was not immediately available for comment and a spokesman for WorldCom declined to comment.

The House panel demanded a slew of documents from WorldCom, including the company's recent internal audit that discovered the accounting errors, minutes of audit committee meetings dating back to 1997, as well records related to Sullivan.

The Securities and Exchange Commission sued WorldCom alleging the accounting move hid some $1.22 billion in losses and a monitor was installed to ensure key documents were not shredded and big payouts were not made to executives.

The SEC is continuing its probe into the wrongdoing and the U.S. Justice Department is also investigating the matter.


Internal auditor Cynthia Cooper began a review of the company's capital expenditures and capital accounts in May. That audit had been scheduled for the third quarter 2002, but she advanced it, WorldCom told the SEC earlier this week.

Sullivan asked her on June 11 to delay the review when confronted with questionable transfers to the company's capital accounts, but Cooper continued the audit, which ultimately uncovered the errors, the company said.

Sullivan on June 20 told the company the transfers to the capital account could no longer be supported because of the drop- off in revenue and he planned to write them down in the second quarter to take care of the problem, according to the statement filed with the SEC.

The congressional investigators were continuing to sift through the five boxes and Johnson said the panel has not yet set plans for a hearing or whether it would include calling Sullivan or the company's former chief executive, Bernard Ebbers, to testify.

Rep. Billy Tauzin, chairman of the House Energy and Commerce Committee, said on Thursday that Sullivan has told WorldCom lawyers Ebbers knew about the account transfers. Ebbers has denied wrongdoing.

Separately, the Senate Commerce Committee said it would hold a hearing the week of July 29 looking into the WorldCom mess as well as the depressed telecommunications industry.

It would likely include an examination of other troubled telecommunications companies, including Qwest Communications International Inc. and Global Crossing Ltd. , as well, the committee said.