The American Federation of Labor/Congress of Industrial Organizations (AFL-CIO) is urging Sprint shareholders to vote against the continued appointment of Big Four firm Ernst & Young as Sprint's auditor. The AFL-CIO effort is part of a large movement nationwide to encourage shareholders to demand more corporate accountability.

In the case of Sprint, union advisors suggest that Ernst & Young's relationship with Sprint management constituted an "egregious conflict of interest." AFL-CIO Secretary Treasurer Richard Trumka pointed out the fact that E&Y received more in fees from Sprint managers for tax shelter advice the firm earned in audit revenue from Sprint in 2000. In addition, Sprint paid E&Y more for non-auditing services than for auditing. "Sprint allowed Ernst & Young to cross the line, and we are now calling on shareholders to respond," said Mr. Trumka.

Sprint's former president and chief operating officer, Ronald T. LeMay, was removed from office earlier this year for his participation in a personal tax shelter in which he avoid paying taxes on more than $100 million in income. William T. Esrey, Sprint's former chairman, resigned over issues relating to his participation in the same tax shelter. Mr. Esrey used the tax shelter to postpone income taxes on $159 million in profits from stock options during 1998, 1999, and 2000.

The Internal Revenue Service is investigating the shelter in which Messrs. LeMay and Esrey participated. "Ernst & Young played the well-documented role of tax avoidance advocate for management," said Mr. Trumka in calling for the shareholders to oust E&Y. The annual shareholder meeting at Sprint is scheduled for May 13.