Managing Earnings. USA Today reports that an independent review of Nortel has concluded that company executives juggled figures to earn bonuses.

As the telecom bust spawned layoffs and huge losses at Nortel in 2001 and 2002, there was 'a decline in financial discipline,' the report says.

Dunn and other executives began to 'stretch the judgment' as to when certain charges could be taken, the report says. At the same time, the company started linking the bonuses of top executives with consecutive profitable quarters.
After Nortel posted losses in the first three quarters of 2002, Dunn chose not to report an isolated fourth-quarter profit, 'because performance for the rest of the year had been poor,' the report says.

Dunn, the review says, worked with Beatty and Gollogly to identify $175 million in expenses to achieve a loss. Then, the company reduced the excess charges in the first and second quarters of 2003 in order to erase losses, post consecutive profitable quarters and receive the bonuses, the report says.