Three leaders of the scandal-hit US telecoms giant WorldCom have been ordered to appear before a government committee to answer questions on the apparent multi-billion dollar accounting fraud.

This at least on the surface appears to be a total breakdown of the ethics of some members of the corporation

Representative Michael Oxley

A separate congressional panel which has been investigating the accounting fraud behind the collapse of energy trader Enron is also demanding corporate records from WorldCom.

US President George W Bush has demanded a full investigation into the WorldCom affair and has admitted he is worried about the economic fallout from the recent wave of financial scandals.

WorldCom is facing bankruptcy after being charged with fraud for improperly accounting for $3.85 billion in ordinary expenses, a move that allowed it to post $1.38 billion in net income in 2001, instead of a loss.

Representative Michael Oxley signed subpoenas for three executives and an analyst

Michael Oxley, chairman of the Financial Services Committee of the House of Representatives, said: "This at least on the surface appears to be a total breakdown of the ethics of some members of the corporation."

He signed subpoenas requiring the attendance at a hearing of:

• WorldCom chief executive John Sidgmore

• Former chief executive Bernie Ebbers

• Recently fired financial director Scott Sullivan

• Salomon Smith Barney telecommunications analyst Jack Grubman, who long praised WorldCom to investors before cutting his rating a day before the US second-largest long-distance phone company disclosed the scandal

The House Energy and Commerce Committee sent a letter to WorldCom seeking a slew of records, including the company's recent internal audit that discovered the accounting errors and audit committee minutes dating back to 1997.

In many respects, this case appears to be eerily similar to the accounting hocus-pocus that occurred at Enron

Representative Billy Tauzin

The committee has been investigating Enron and the role of its accountants Arthur Andersen - who also did the books for WorldCom.

Committee chairman Billy Tauzin said: "In many respects, this case appears to be eerily similar to the accounting hocus-pocus that occurred at Enron."

President Bush said during the G8 Summit in Canada that he was "concerned about the economic impact of the fact that there are some corporate leaders who have not upheld their responsibility".

He urged executives to "fully disclose all assets and liabilities and... treat your shareholders and employees with respect".

Official outrage

US Treasury Secretary Paul O'Neill was among other officials echoing the president's outrage.

He said the US Securities and Exchange Commission, which on Wednesday filed charges against WorldCom for allegedly manipulating earnings, should be given the right to freeze the assets of officials implicated in scandals such as WorldCom.

"In cases like this, the SEC even would be able to go in and freeze accounts and freeze assets, so while some of these things are being litigated the money doesn't run away and it can be redistributed to employees and shareholders," he said.

The SEC alleged WorldCom hid expenses to artificially inflate earnings to meet Wall Street expectations, a trick that hid $1.22bn in losses WorldCom would have otherwise posted for 2001 and this year's first quarter.

Huge cost of failure

Stock markets around the world plunged as the revelations came out about WorldCom.

Though there have been some signs of recovery, investors, banks and employees are beginning to count the cost.

WorldCom is thought to owe its banks approximately $4.5bn.

It is running out of cash fast, and has hoped to raise $5bn to meet its running costs and interest payments though that seems unlikely.

The company is expected to announce details of 17,000 job losses, mostly in North and South America.

Sources have told BBC News Online that only 650 jobs will be lost in Europe. Fewer than 200 positions are predicted to go in the UK.