(Washington, D.C.) – Citizens Against Government Waste (CAGW) today chastised the General Services Administration (GSA) for lifting a suspension imposed on MCI, formerly WorldCom, in July 2003 for unethical practices.  The company has been prevented from receiving any new government contracts since then.

“This punishment amounted to nothing more than a slap on the wrist,” CAGW President Tom Schatz said.  “Other companies, including Enron and Arthur Andersen, who committed similar acts received much stiffer penalties.  If GSA truly wanted what was in the best interests of taxpayers, they would have permanently debarred MCI.”

MCI could have faced a three-year suspension and debarment, but GSA determined that the company had strengthened its ethics and internal controls and therefore lifted the ban.  GSA based its original decision to suspend MCI on reports from former U.S. Attorney General Richard Thornburgh, the Special Investigative Committee of WorldCom’s Board of Directors, a report from the company’s own ethics office, and a June 3, 2003 report by the MCI’s outside auditors, KPMG.  The GSA inspector general specifically noted the ten “material weaknesses” in the KPMG report.

“The company has already proven that it will engage in unacceptable, unethical, and fraudulent behavior in order to obtain contracts,” Schatz continued.  “GSA needed to disconnect MCI through debarment and send a proper message to companies that such acts will not be tolerated by the government, much less rewarded with taxpayer dollars.”

CAGW has been calling for MCI’s debarment from government contracts since November, 2002 on the basis that the Federal Acquisition Regulations required such a conclusion, as well as that the agreements unnecessarily put taxpayer dollars at risk and amounted to a hidden government bailout of the company.

“The government is MCI’s largest customer,” Schatz concluded.  “GSA has a responsibility to ensure that the government contracts with reputable, ethically sound businesses, and in this case, they failed to do so.”

As a result of its ruling, GSA will be named on Thursday, January 8, as CAGW’s Porker of the Month for January 2004, an award handed out to lawmakers, government officials, or agencies that have shown a blatant disregard for the interests of taxpayers.

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