MCI wins House contract
- By Michael Hardy
- Jul 22, 2003
MCI continues to sign government deals, despite critics who say the company should be barred from federal contracts. Last week the telecom provider signed a $17 million contract with the House of Representatives. This three-year pact will extend an existing arrangement for high-speed data services, MCI spokeswoman Natasha Haubold said. MCI, formerly known as WorldCom, last year admitted to the largest corporate accounting fraud in history and filed for bankruptcy. Some of its former executives have been indicted or are under investigation. Earlier this month, the company agreed to pay investors $750 million to settle civil fraud charges brought by the Securities and Exchange Commission.
This week, just days after MCI got the Congressional contract, a senior citizens' activist group called the Gray Panther distributed a 16-page briefing detailing the "epic fraud" of the company to all members of Congress. Senior citizens historically have invested heavily in telecom firms.
"The Federal government should not be in the business of rewarding corporate criminals," wrote Gray Panthers Corporate Accountability Project Director Will Thomas in a letter accompanying the July 21 report. "WorldCom's fraud picks seniors' pockets and steals their futures."
Rep. John Sweeney (R.-N.Y.) plans to introduce legislation that would bar MCI from General Services Administration-governed contracts for fiscal year 2004, while the government assesses the extent of the fraud and decides whether the contractor should receive more federal business, said Sweeney spokesman Kevin Madden. "Given WorldCom's previous discrepancies with their accounting, they should not gain any profits through government contracts," Madden said. "They should be punished."
Haubold said MCI won the House contract fairly against other major telecom companies who submitted bids. "It was a highly competitive contract," she said.
The Telecommunications Workers of America and the grassroots Citizens Against Government Waste have also repeatedly called for MCI's banishment from federal contracts. Sen. Susan Collins, (R-Maine), who chairs the Senate Government Affairs Committee, has written to GSA Administrator Stephen Perry urging the agency to take a closer look at MCI.GSA general counsel Raymond McKenna has said previously that contract suspension is for companies that present a risk for federal contracting now, not punishment for deeds of the past.
MCI says that it has taken steps to prevent fraud, and added that the company's government division had no involvement in the scandals.