US lawmakers have been frustrated in their attempt to learn more about bankrupt telecoms carrier Global Crossing's questionable accounting practices.

In testimony on Thursday in Washington, executives for Global Crossing said the firm was "no Enron", despite seeming similarities between the two bankrupt firms.

They also dismissed any accusations of impropriety over its business dealings that may have pushed it into bankruptcy, resulting in significant job losses.

"The bankruptcy of Global Crossing is not the reason for the loss of 9,000 jobs," the firm's chief executive John Legere said before a panel of the House Finance Committee.

"The restructuring that Global Crossing has gone through... is similar to what the entire industry has gone through," he said.

Federal probe

Global Crossing filed for bankruptcy protection from its creditors on 28 January with liabilities totalling $12bn and assets worth $22.4bn.

Members of the house panel were keenly interested in finding out more about "capacity swaps", in which carriers exchange capacity in complementary parts of the world without actually exchanging money - even though the swap is shown as revenue.

Aside from Global Crossing, executives from Qwest Communications, WorldCom and Cable & Wireless testified that the use of swaps was fully disclosed in their trading statements and accounted for properly.

It appears that swaps are being used as a quick and easy way to inflate earnings and make a company look more profitable than its really is

Representative Sue Kelly

But lawmakers remained sceptical.

"There's certainly very serious questions as to whether [Global Crossing] engaged in practices that had far more to do with meeting analysts' estimates than with economic substance," said John LaFalce, Democrat from New York.

The Securities and Exchange Commission (SEC), as well as the Federal Bureau of Investigation (FBI), are looking into whether Global Crossing and others accounted for the transactions properly.

US Representative Susan Kelly, who is heading up the panel conducting the hearing, said investors have little reason to trust corporate disclosures given the manner in which Global Crossing accounted for its swaps.

"It appears that swaps are being used as a quick and easy way to inflate earnings and make a company look more profitable than its really is," she said.

Full disclosure

Global Crossing's questionable accounting practices left one congressman to call the firm's dealings nothing more than a scam.

Cohrs: Arthur Andersen remains Global Crossing's auditor

"[It is] nothing new," said Massachusetts Congressman Michael Capuano. "You bought something you didn't need, with money you didn't have, and sold it to somebody who didn't need it and didn't have any money, and you hid the bookings."

But Mr Legere and chief operating officer Dan Cohrs were staunch in their defense of the way Global Crossing conducted its business.

"These transactions were entirely lawful, were reported in a manner in accordance with applicable accounting principles and were fully disclosed," each said.

Congress is also investigating energy-trading giant Enron, whose collapse was triggered by concern over its accounting methods.

Both Enron and Global Crossing used embattled auditing firm Arthur Andersen, itself the subject of a government probe.

Lawmaker's fury

Most lawmakers on the House committee expressed scepticism and disdain over whether the panel of executives was being fully forthcoming.

Representative Stephanie Tubbs Jones took Mr Legere to task for accepting a $3.5m signing bonus in addition to a $1.1m a year salary even as bankruptcy loomed for Global Crossing.

Legere: "These transactions were entirely lawful"

When asked to explain the seeming contradiction, Mr Legere replied, "There's a difficulty in trying to understand the complexities of a chief executive officer in a turnaround situation of a major telecommunications company."

During the course of the testimony, Mr Legere and Mr Cohrs acknowledged that Arthur Andersen remains Global Crossing's auditor as well as a consultant.

When asked by Ms Jones if he was aware of the concern within the financial-services industry in having accounting firms provide both auditing and consulting services, Mr Legere replied, "I don't believe there is any impropriety in the rolls Andersen is playing in our company."

Overcapacity

The House panel is developing legislation designed to reform corporate responsibility, the accounting industry and the transparency of information provided to investors.

Global Crossing was one of a rash of "carriers' carriers" - new telecoms companies building fibre-optic capacity around the world with the aim of selling usage rights on.

The rapid rollout of its 27-country network covering more than 200 cities gave it a huge debt burden, and it was hit by overcapacity in bandwidth and lack of demand.

Its problems were made worse by the post-Enron concerns over its accounting practices.