GSA asked to drop WorldCom

A coalition of consumer groups asked the General Services Administration on Oct. 30 to drop troubled WorldCom Inc. from its list of approved federal contractors.

The coalition, including the Communications Workers of America, the Gray Panthers and the National Black Chamber of Commerce, said the scandal-plagued company should be barred from future federal contracts because of its conduct, which drove the telecom firm into bankruptcy.

"WorldCom's corporate practices have caused enormous harm on a scale that is hard to calculate," said Morton Bahr, CWA president.

The company filed for bankruptcy protection July 21, and the Justice Department is investigating the company's accounting practices.

Although GSA has barred other scandal-ridden companies, including Enron and Arthur Andersen LLP, from bidding on future federal contracts, it has not taken any action against WorldCom, which had $462.5 million worth of federal contracts in 2001.

"GSA is concerned about the allegations of unethical conduct," a GSA spokesperson said. "GSA is monitoring the Securities and Exchange Commission and U.S. Department of Justice investigations, bankruptcy proceedings, and related legal inquiries. If necessary, GSA will act at an appropriate time to protect the government's interest."

In a letter to GSA Administrator Steve Perry, the coalition of consumer groups said, "WorldCom's behavior has harmed both the telecommunication sector and the larger U.S. economy, and it should be punished for its actions. By barring WorldCom from federal contracts, the GSA will send a clear message that this administration will not now or in the future condone fraudulent behavior from corporate America."

In addition, Will Thomas, who runs the corporate accountability project for the Gray Panthers, said the federal government should use its buying clout to press for changes in the corporate world instead of allowing WorldCom to continue doing business in the federal marketplace.

WorldCom general counsel Michael Salsbury said in response, "WorldCom has at all times conducted itself as a responsible government contractor. None of the accounting issues, which WorldCom discovered and announced, affected in any manner the provision of high-quality, competitively priced services to our customers, including GSA."

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