Governor Rendell Issues Statement on MCI-WorldCom Agreement

GOVERNOR RENDELL ISSUES STATEMENT ON MCI-WORLDCOM AGREEMENT

Governor Edward G. Rendell today issued the following statement on
the MCI-WorldCom agreement to pay the Commonwealth $46.5 million, it's share of
a settlement reached with the company for using a tax avoidance scheme to
shield billions of dollars of income from state taxes in 16 states:

"This is good news for the Commonwealth. The settlement is a result of our
aggressive efforts to make sure Pennsylvania received its appropriate share
under the agreement.

"I want to acknowledge the extensive auditing of MCI's records performed by the
Department of Revenue. The Department's hard work, knowledge and dedication
resulted in Pennsylvania receiving the second largest settlement out of the 16
states involved."

"The plan devised by MCI and its accountants was nothing more than a sham to
avoid paying millions of dollars in state taxes. This settlement sends a
strong message to corporations doing business in Pennsylvania that we will
aggressively pursue companies that use abusive tax schemes to avoid paying
their fair share of state taxes.

"The MCI case is further evidence that the General Assembly needs to act on the
recommendations made by the Pennsylvania Business Tax Reform Commission to
close corporate tax loopholes. Pennsylvania's high corporate tax rate,
combined with its separate company reporting system, makes it susceptible to
abusive tax schemes. I want to use the revenue gained from closing the tax
loopholes to significantly reduce corporate income taxes."

http://papress.state.pa.us/parelease/data/1051004.006.htm