Quin: Elbow grease’ led to MCI settlement
No wrongdoing has been alleged in the WorldCom case, but the attorneys’ fees and Langston’s status as a major campaign donor to Hood have been criticized. Some have questioned the practice of the attorney general hiring outside counsel.
The MCI case involves complex tax law. But Quin said essentially WorldCom was requiring all of the companies it owned outside of the state to send payments to the home office in Mississippi.
WorldCom referred to the payments as royalties that are essentially exempt from state taxes. But in reality, the payments were dividends that are taxable at roughly 10 percent.
Quin, on behalf of the state, sued for $1 billion, but settled for $100 million in cash. The reason for the settlement for less is that research indicated that prior to 1998 WorldCom received $1.9 billion in such payments. Ten percent of $1.9 billion is $95 million – hence the $100 million cash payment plus some property.
In 1998, WorldCom, obviously recognizing it was skating on thin ice, was able to get a bill through the Mississippi Legislature to make such dividend payments tax exempt, Quin said. If the bill had not become law, Mississippi would have been entitled to the $1 billion.
“The case required elbow grease, curiosity and tenacity,” Quin said. “I figured out the tax law, as well as the fraud, through hard work.”
NE MS Daily Journal
2/4/8
Magnolia Tribune
