“Companies should not be rewarded for their misdeeds,” Schatz says

(Washington, D.C.) – Amid recent reports of more fraudulent behavior by large corporations, Citizens Against Government Waste (CAGW) today urged the federal government to stand firm by refusing to contract with companies that violate the public trust.

“Whenever the government contracts with deceptive corporations it puts taxpayer dollars at risk, and sets a bad precedent,”  CAGW President Tom Schatz said.  “Companies such as WorldCom have cheated investors out of billions of dollars and continue to be awarded contracts for government services.  How will taxpayers be protected if these companies no longer have the resources to perform their contractual obligations or defraud the government?”

It has been reported that MCI, Enron, and Global Crossing misstated their tax returns in order to help conceal their true financial situations.  Now that they have been caught lying about their earnings, they are asking the Internal Revenue Service for refunds.

“It is time for the government to put a stop to these abuses,” Schatz continued.  “If these companies intentionally filed false claims to cover their fraudulent practices, they have lost the right to demand a refund.  If anything, this money should go to the thousands of people that lost billions of dollars as a result of such fraud.”

The latest corporation making scandalous headlines is Boeing.  The company, one of the largest contractors for the Department of Defense, is being investigated by the Department of Justice after it was discovered that the company possessed a leading competitor’s documents relating to bids for a project involving building rockets to launch spy satellites.  This follows a January GAO report which concluded that Boeing also used a competitor’s proprietary documents when developing their design for a missile defense contract bid.

“If it is found that Boeing failed to follow the bidding process in good faith, it is imperative that the government punish the company by no longer conducting business with them,” concluded Schatz.  “It is common sense that such companies should not be rewarded with new contracts, and instead be punished for their bad practices.  Only when the government starts to make examples out of such corporations will the scandals come to an end and taxpayer dollars be protected from further losses.”

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 www.cagw.org.