WorldCom is trying to emerge from bankruptcy.
NEW YORK (AP) – Long-distance giant MCI avoided paying access fees to local phone companies by diverting calls to Canada – including calls placed by the State Department and other government agencies, AT&T Corp. charged Monday.
AT&T said it was alarmed by the practice, which lawyers have said could compromise national security by leaving the calls unprotected from eavesdroppers.
The claims were made by AT&T in a filing in U.S. Bankruptcy Court in New York, which is considering efforts by WorldCom Inc. to emerge from Chapter 11 bankruptcy protection. WorldCom, brought down by an $11 billion accounting scandal, is adopting the name of its MCI long-distance division in a bid to clean up its image.
MCI did not immediately return a call for comment. But the company said over the weekend that its competitors were simply trying to throw up roadblocks to MCI’s emergence from bankruptcy.
Federal prosecutors are investigating accusations by AT&T, other rival carriers and former MCI executives that the company defrauded telephone companies of hundreds of millions of dollars. Members of Congress are also re-examining whether MCI should remain a large federal contractor.
AT&T said MCI had also diverted to Canada calls that were placed by one member of Congress, the Postal Service, the Library of Congress and the U.S. Agency for International Development.
MCI officials have “demonstrated their willingness to play fast-and-loose with our national interests to line their pockets with cost savings from local telephone tariffs they dodged,” AT&T said in its filing.
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