Hot on the heels of recent scandals involving Sprint Corporation executives and the tax shelters they purchased from Big Four accounting firm and auditor Ernst & Young, shareholder's at Sprint's annual meeting voiced a significant objection to the retention of E&Y as auditor for another year.

While the majority voted to keep E&Y, a resounding 38% voted to oust the auditor, an amount that pleases representatives from the AFL-CIO. The union had actively encouraged members to vote against the retention of E&Y, calling the dual relationship of E&Y as Sprint auditor and financial advisor to the company's executives, an "egregious conflict of interest." AFL-CIO deputy director for the group's Office of Investment indicated he believed any vote over 25% against E&Y is a victory for the union.

Sprint CEO Gary D. Forsee has promised to seriously consider the strong negative vote. "It is clear shareholders have spoken," said Mr. Foresee.

Sprint's former CEO, William T. Esrey, and former president, Ronald T. LeMay, are under investigation by the Internal Revenue Service for their participation in a tax shelter they purchased from and on the advice of E&Y. The two were dismissed from their jobs at Sprint earlier this year.

AFL-CIO secretary-treasurer Richard Trumka has been waging a campaign against the Securities and Exchange Commission to prohibit auditors from consulting on executive compensation. He said:

"By advising the board on executive compensation, an auditor is in effect evaluating the performance of that executive, a role that could make an auditor reluctant to draw attention to possible shortcomings by that executive in the future. Alternatively, if the auditor advises the executive on his or her compensation, the auditor is acting as an advocate for the executive, a role that conflicts with the auditor's duty to shareholders."

Sprint shareholders also voted to prevent independent auditors from providing financial services to members of Sprint's audit committee and executive directors, and they voted that Sprint should not be liable for paying for tax compliance services for company executives unless the services are available to all Sprint employees.