Edmondson asks agencies, systems to tally WorldCom losses
Wednesday, July 3rd 2002, 12:00 am
By: News On 6
OKLAHOMA CITY (AP) _ Oklahoma Attorney General Drew Edmondson fears that state agencies and retirement systems may have lost more when WorldCom Inc. stocks and bonds rapidly fell in value than they did in the accounting scandal involving Enron.
``What we're hearing is that our WorldCom losses could be several times the amount we lost with Enron,'' Edmondson said in a memo sent Tuesday to agency and fund leaders.
The state had a net loss of $10.5 million from Enron investments between Oct. 1, 1998, and Jan. 28, 2002.
WorldCom, the nation's second-largest long distance telephone carrier, was hit with federal civil fraud charges last week. The government accuses the company of disguising nearly $4 billion in expenses from the investing public.
Published reports already put WorldCom-related losses for Oklahoma's two largest public pension funds at about $25 million.
Officials with the Oklahoma Teachers Retirement System said their system sold its holdings in WorldCom after experiencing losses of almost $17 million related to WorldCom stock values.
The loss is roughly eight times the amount lost on Enron, but comparatively small, considering that the system is worth $8 billion, said Tommy C. Beavers, executive secretary for the system.
Other agencies getting Edmondson's memo include state retirement systems for law enforcement, police and firefighters, the Wildlife Conservation Department, Commissioners of the Land Office, the Oklahoma State Education and Employees Group Insurance Board, CompSource Oklahoma, the Oklahoma Ordnance Works Authority, the Oklahoma Housing Finance Agency and the Oklahoma Regents for Higher Education.
The Oklahoma Public Employee Retirement System had $11.7 million invested in WorldCom bonds and $256,000 in WorldCom stocks before the stocks fell. The bonds are now worth $8 million less and the stack was valued at pennies per share, said Stephen Edmonds, executive director of the retirement system.
As with Enron, agency and retirement system officials should consult with his office before initiating legal activities to try to recover their losses, Edmondson said.