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Group Eyes MCI/Fed Contracts

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WASHINGTON -- Citizens Against Government Waste (CAGW) President Thomas A. Schatz today sent the following letter to Stephen A. Perry, Administrator of the General Services Administration (GSA):

On October 31, 2002 we wrote to you about federal acquisition regulations and how companies receiving taxpayer dollars must live up to a high corporate standard. Since early November of 2002, WorldCom has been awarded three major contracts totaling $691 million for the provision of telecommunications services: the Department of State, the Department of Veterans Affairs, and the General Services Administration. In addition, WorldCom/MCI was recently awarded a wireless telephone concession worth approximately $45 million to rebuild Iraq's mobile telephone system.

WorldCom/MCI has been the perpetrator of the largest corporate fraud in the history of the United States. WorldCom/MCI's fraud has thus far cost investors more than $176 billion-roughly three times the amount lost by investors in Enron, a company that GSA debarred from federal contracts in March 2002.

WorldCom/MCI has misled stockholders, pension fund holders, and hardworking businessmen and women for years. GSA suspended both Enron and Arthur Andersen because the two companies "had engaged in misconduct and committed internal control irregularities that seriously affect their suitability to receive Government contracts." When Enron and Arthur Andersen were debarred, you noted, "The purpose of suspension is not to punish a contractor or an individual, but to protect the government from contractors that do not have a satisfactory record of business ethics and integrity."

We respectfully request all documents from GSA regarding the WorldCom contract decision in order to determine why GSA believes WorldCom/MCI has "a "satisfactory record of business ethics and integrity." Taxpayers deserve to know why a company with such blatant disregard for ethical business practices is still able to win lucrative federal contracts.

Thank you for your attention to this matter.

    Tom Schatz

Citizens Against Government Waste is the nation's largest nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, abuse, and mismanagement in government. For more information, please visit http://www.cagw.org.

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