CCAGW Warns Against Letting WorldCom Off the Hook | Council For Citizens Against Government Waste

CCAGW Warns Against Letting WorldCom Off the Hook

Press Release

For Immediate ReleaseContact:  Mark Carpenter/Tom Finnigan
October 31, 2003(202) 467-5300


Bankruptcy Decision Expected Today

(Washington, D.C.)―The Council for Citizens Against Government Waste (CCAGW) today reminded taxpayers of the criminal fraud perpetrated by WorldCom prior to the soon-to-be announced decision regarding the company’s reorganization.  U.S. Bankruptcy Judge Arthur Gonzalez said that he will issue his decision today on whether to accept or reject the telecommunications company's reorganization plan.  The plan would pay most creditors 36 cents on the dollar and allow MCI to discard $35 billion in debt.

CCAGW President Tom Schatz made the following statement regarding WorldCom’s fate:

“A judgment in favor of MCI is no treat for taxpayers on Halloween.  The company committed the largest fraud in history and has been suspended from federal contracts.  MCI continues to con the public with its claims of reform and commitment to sound accounting practices. 

The one million members and supporters of CAGW are particularly incensed by the federal government’s granting of seven waivers worth $100 million to MCI after the suspension was issued by the General Services Administration (GSA).  The Department of Defense has been responsible for five of the seven waivers.  A suspension should mean what it says, rather than turning into a loophole-filled, empty gesture by the government.  Certainly, the Pentagon can find alternatives to MCI despite claims that national security is at stake if the company does not continue working on certain projects.  For any of the government’s needs, there must be more than one contractor able to perform the work.  This is especially true in telecommunications, a highly competitive sector of the economy.

While the bankruptcy and procurement laws are not directly related, surely the bankruptcy court should not have ignored the continued evidence of MCI’s misdeeds, including the most recent revelations that the company may have overcharged the government for its services, and that it may have illegally routed calls to competitors, avoiding long distance access charges and other fees.  Certainly, in considering whether to debar MCI following the company’s suspension from government contracts, GSA should not simply accept the bankruptcy decision as controlling in that matter.”

The Council for Citizens Against Government Waste is the lobbying arm of Citizens Against Government Waste, the nation's largest nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, abuse, and mismanagement in government.

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