“Let’s hope so,” says Schatz 

(Washington, D.C.) – Citizens Against Government Waste (CAGW) today congratulated Senate Governmental Affairs Chairman Susan Collins (R-Maine) for forcing the General Services Administration (GSA) to begin conducting suspension proceedings against MCI/WorldCom.

“Sen. Collins’ insistence that GSA conduct a long-overdue review of its earlier decision to continue doing business with MCI/WorldCom will protect tax dollars and strengthen the integrity of the federal procurement system,” said CAGW President Thomas A. Schatz.  “Other members of Congress have jumped on the bandwagon, but Sen. Collins deserves credit for being out front on this critical issue of government waste and mismanagement.”

While GSA took swift action to debar, or suspend, both Enron and Arthur Andersen from government contracts, the agency failed to do so when MCI/WorldCom went bankrupt and its executives were accused of fraud.  CAGW has maintained since last November that consistent application of the federal acquisition regulations would lead to the same result for all three companies, and that the decision to continue doing business with MCI/WorldCom was not appropriate.

In early June, Sen. Collins expressed her dissatisfaction with GSA’s response to her initial inquiry into the agency’s decision regarding MCI/WorldCom.  She noted that GSA “appears to have relied very heavily upon WorldCom representations” in making its decision, and “ignored certain outside sources of information” such as the recent report to the federal bankruptcy court by former U.S. Attorney General Richard Thornburgh, which “raised serious questions about WorldCom’s corporate culture.”

Since MCI/WorldCom announced its bankruptcy, the government has provided more than $770 million in business for the company.  That contrasts with a mere $500 million proposed fine by the Securities and Exchange Commission.

“The fact that the phones may work is not the only issue affecting MCI/WorldCom’s ability to do business with the federal government.  Agencies must also consider a company’s business ethics and integrity.  With the GSA investigation, taxpayers will be closer to learning whether the federal government’s hidden bailout of MCI/WorldCom is coming to an end.  Based on consistent application of federal procurement rules, GSA should unplug MCI/WorldCom from government contracts,” concluded 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 www.cagw.org.