NEW YORK -- No one can blame MCI for being eager to change the subject after a wrenching 21-month trip through scandal and bankruptcy.
This new, happy tale of rebirth as a changed company might be more convincing if it didn't seem to banish all further mention of WorldCom. Or if MCI had written the ending to that saga in simple language rather than accountant-speak.
As the company emerged from bankruptcy last week, it still wasn't even clear how big the scandal was.
No doubt, MCI had plenty to say last month with a nearly 500-page annual report detailing a vast cleanup of the bad accounting which nearly destroyed the phone company.
However, most of the explanation was unintelligible to the average investor.
Just try to decipher this: "The remaining restatement adjustments to 2000 and 2001 pre-tax income total $8.8 billion. Included in this amount are $4.8 billion of charges to pre-tax income to correct access costs that had been reduced either by the improper capitalization of the expenditures as additions to property, plant and equipment or by inappropriate reductions to accrual balances."
That comment was buried in a two-page press release that accompanied a $74 billion negative "adjustment" to past financial statements. It was the sum total of what the company's new management chose to say in its final reckoning on one of the biggest accounting frauds in history.
There were plenty more details to be mined from the annual report filed with the Securities and Exchange Commission in mid-March. But that rambling filing was full of the same dense jargon. A link on the company's Web site with questions and answers was no clearer.
To be sure, this kind of terminology is perfectly legal and, more importantly, quite common among all publicly traded companies.
In MCI's case, the failure to pursue a higher level of transparency doesn't exactly demonstrate the forthrightness you might expect from a company which says it wants to restore investor trust. Millions of people lost money on WorldCom or investments based on the industry trends suggested by WorldCom's fraudulent reports.
It's possible that MCI merely bobbled the ball at the end of what appears to have been an earnest, 18-month effort to de-cook the company's books, an odyssey which required auditors to unwind financial twists and turns dating as far back as 1993.
For some reason, despite the obvious enormity of that cleanup, and the fact that there'd been no public update on the scandal from MCI since late 2002, the company did not recognize a need to step up to the microphone and say, 'Here's what we found,' in clear, uncomfortable detail.
Instead, management opted for a robotic, monotone statement of facts and figures not unlike the typical annual report.
The company is probably worried about providing new legal ammunition with which to be sued by angry investors.
But somewhere in a 500-page report, it would have been helpful to see an apples-to-apples comparison between the final restatement and the company's previous estimates of the inaccuracies. It would have been even better to see the new figures compared with the detailed findings of a special investigation conducted by a committee of new MCI directors.
Before the restatement, MCI's last official pronouncement had been that accounting irregularities "could total in excess of $9 billion." The only official explanation for any portion of that came when the scandal first broke in June 2002 with a disclosure of $4 billion in hidden operating costs - a deception that rightly or wrongly came to be seen as the main source of the fraud.
About a year ago, the directors committee identified more than $12 billion in misrepresentations that inflated profits as much as $9.5 billion. That calculation included $7.3 billion in hidden operating costs.
Last month's final reckoning by MCI failed to directly relate or reconcile any of these estimates with any specific portion of the $74 billion restatement, and the company didn't respond to requests by The Associated Press to clarify the figures.
The only adjustment in the report labeled clearly enough to link with the earlier estimates was the $4.8 billion in "improper reduction of access costs." MCI referred to this amount as part of a larger tally of $8.8 billion, but didn't explain the other $4 billion.
The report also seemed to raise a new issue, $5.8 billlion of "errors" in the estimated value of some acquired assets. Although it's unclear whether those errors were seen as intentional, The Wall Street Journal added this amount with the $4.8 billion to conclude that the accounting fraud at WorldCom totaled $10.6 billion. MCI also did not respond to a request by the AP to discuss that calculation.
Understandably, MCI would rather not focus on the past as it returns to the community of corporations. What better way to demonstrate its rehabilitation than with a willingness to address any questions about what happened in clear, direct language?