WorldCom's missing billions may grow

Dick Thornburgh, a former US Attorney General appointed to the country's biggest bankruptcy case, has said the company had taken "extraordinary and illegal steps" to manipulate its financial records.

"We have identified a number of other entities related to reserves that require review to determine if any were used to boost improperly WorldCom's earnings," said Mr Thornburgh in a 118-page report filed with the bankruptcy court on Monday.

WorldCom continues to transmit roughly half of the world's internet traffic.

Mr Thornburgh was appointed in August as examiner of WorldCom by a US Bankruptcy Court and charged with overseeing and investigating the company

Examiners are rarely named in US bankruptcy cases.

Black hole?

WorldCom filed for the biggest US corporate bankruptcy in July, but some analysts estimate it might have to increase that figure by $3bn.

WorldCom has denied finding any new accounting discrepancies.

"We've said all along, as we review past accounting practices we will reveal any issues if they arise. At this point, we have nothing new to report," WorldCom Chief Financial Officer John Dubel told Reuters.

On Monday the company announced it was doubling its internal auditing teams.

WorldCom's former chief financial officer has been charged with fraud and conspiracy and four former executives have pleaded guilty to charges and are cooperating with authorities.

Analyst's tips

Mr Thornburgh also criticised former chief executive Bernie Ebbers and investment bank Salomon Smith Barney's "unusually close and potentially problematic" relationship with WorldCom.

Salomon's parent firm, Citigroup, has denied wrongdoing.

Mr Thornburgh said he would continue to investigate "the wildly enthusiastic analyst reports issued by SSB and others with respect to WorldCom at a time when the stock was plummeting."