The third and final WorldCom report by the appointed Bankruptcy Court Examiner is out. Andersen, the auditor, not unexpectedly, is criticized. What is far more interesting is the reference to KPMG.

Former U.S. Attorney General Richard Thornburgh was the examiner, and with the assistance of a Washington, D.C. law firm, issued this 500-plus page report. In part, it focuses on WorldCom's state tax minimization program, indicating that's likely WorldCom avoided paying hundred of millions in state taxes based on the accrual of $20 billion in what is referred to as "questionable royalty charges." The cornerstone of the program, indicates the report, was KPMG's classification of "management foresight" as an intangible asset.

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