Connecticut Poised to Do the Right Thing | Citizens Against Government Waste

Connecticut Poised to Do the Right Thing

Press Release

For Immediate ReleaseContact: Mark Carpenter/Tom Finnigan
September 26, 2003(202) 467-5300

 

Legislation Would Prohibit State From Contracting with Fraudulent Companies

(Washington, D.C.) The 14,928 members and supporters of the Council for Citizens Against Government Waste (CCAGW) in Connecticut today applauded State Senator William A. Aniskovich (R-Branford) for promising to introduce legislation that would prohibit state or local contracts from being awarded to corporations that have admitted to or who are currently being investigated for accounting irregularities or securities fraud. 

“Thousands of Connecticut residents have lost billions of dollars in retirement savings and investments from Enron, MCI, Adelphia Communications, and other corporate scandals,” CCAGW President Tom Schatz said.  “This bill ensures that tax dollars will not be put at risk by doing business with fraudulent companies.”

Sen. Aniskovich says he will introduce the legislation next session.  The bill would bar companies from bidding for state contracts after they have been found guilty of accounting irregularities or securities violations.  The bill would also suspend companies that are under investigation until they are cleared of wrongdoing.

“Sen. Aniskovich should be commended for addressing this issue.  It is essential that the legislature follow through and pass this bill,” Schatz continued.  “Other states need to follow suit and enact similar legislation to protect their taxpayers.”

The federal government has rules for debarring fraudulent companies from conducting business with it.  Both Enron and Arthur Andersen were debarred as a result of their recent scandals.  MCI has so-far escaped debarment, and the SEC fined the company a mere $500 million even though it committed the largest corporate fraud in history.  In fact, the government awarded MCI $770 million in contracts last year.  To date this year, federal contracts include a $45 million Pentagon contract for a cell phone network in Iraq, and $7 million from the National Oceanic and Atmospheric Administration for satellite data communications.

The state government of Connecticut also contracts with MCI.  In 1996, MCI signed a three-year multimillion dollar contract with Connecticut to provide interstate voice and data communications, as well as fax broadcast, conferencing and calling card services.  Additionally, MCI provides bridging services for videoconferencing and runs a collect calling service for state prisons.

“Connecticut needs to show MCI and other fraudulent companies that crime doesn’t pay,” Schatz concluded.  “Refusing to award such companies new contracts is a common sense practice, and taxpayers in Connecticut deserve nothing less.”

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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