Posted on 10/25/2003 6:14:46 AM PDT by Stew Padasso
Watchdog Furious Over Government Contracts for Suspended MCI
(Washington, D.C.)  Citizens Against Government Waste (CAGW) today chastised federal agencies for granting waivers allowing MCI, formerly WorldCom, to continue to receive federal contracts, despite the fact the company was suspended by the General Services Administration (GSA) in July for lacking the necessary internal controls and business ethics.
This is the wrong message to send to corporate America, CAGW President Tom Schatz said. A company that committed the largest fraud in history ends up being punished on paper and not in reality. This contradictory action does not even amount to a slap on the wrist.
In the year since the Securities and Exchange Commission launched its initial investigation into what was then WorldCom, the government has awarded MCI more than $1.2 billion in contracts. According to an article in todays Washington Post, the suspension has been waived on at least seven occasions, allowing federal agencies to renew, extend, or replace existing MCI contracts. As a result, the government has granted MCI $100 million more in government contracts. The Defense Department is responsible for five of the waivers.
The impression left at the time of the GSA suspension was that MCI was sidelined until the agency determined otherwise, Schatz continued. Now, it has been determined that the suspension was misleading at best. This is an outrageous development that raises major questions about how the federal government manages its procurement system.
In the three months since MCIs suspension, new evidence has emerged from whistleblowers and other sources of alleged over billing by the company at the Departments of Defense and State. In addition, the Justice Department has opened a fraud investigation into whether MCI acted illegally by rerouting calls to avoid paying as much as $1 billion in access fees to other phone companies since 1994.
With all of these allegations of wrongdoing, one has to wonder what more MCI may be hiding, Schatz concluded. By granting waivers, the federal government is not only condoning MCIs behavior, but rewarding it. GSA needs to permanently disconnect MCI through debarment and federal agencies need to follow such a decision, rather than subverting it and continuing to risk taxpayer dollars.
CAGW has been calling for MCIs debarment from government contracts since November, 2002 on the basis that the Federal Acquisition Regulations required such a conclusion, as well as that the agreements unnecessarily put taxpayer dollars at risk and amounted to a hidden government bailout of the company.
Citizens Against Government Waste is the nation's largest nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, abuse, and mismanagement in government.
I think they'd better go into a different line of work, because they sure as heck aren't any good at stopping those things.
DTOM
I don't believe any have been put on trial and the fraud continues. You would continue to reward that behavior?
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