(Washington, D.C.) – Two reports released today provide proof that executives and others at MCI/WorldCom committed acts of fraud and deception that are sufficient to exclude the company from receiving new government contracts.  The reports come on top of calls from Citizens Against Government Waste (CAGW) and Senate Governmental Affairs Committee Chairman Susan Collins (R-Maine) to investigate why the government has failed to stop using taxpayer dollars to do business with the company.

“While the evidence continues to mount against MCI, the government keeps on rewarding the company with new contracts,” CAGW President Tom Schatz said.  “MCI committed the largest fraud in history and cheated thousands of people out of billions of dollars, yet the government continues to bail it out.  This is a slap in the face to all of the innocent victims of MCI’s fraud.  Americans are being hit twice – first as investors in MCI/WorldCom and then as taxpayers.”

The first report was issued by former U.S. Attorney General Richard L. Thornburgh for the federal bankruptcy court in New York.  The second report was prepared by an MCI special investigative committee for the company’s board of directors.  Both reports detail acts of fraud and deception by senior executives and other employees, primarily blaming the atmosphere fostered by founder and former chief executive Bernard Ebbers.

“Other companies, such as Enron and Arthur Andersen, have been debarred from conducting business with the government for similar fraudulent practices,” Schatz continued.  “There is no reason for the double standard currently being applied to MCI.”

Since filing for bankruptcy, MCI has received more than $750 million in federal contracts, making the government the company’s largest customer.  The proposed $500 million settlement with the Securities and Exchange Commission pales in comparison to the government’s business with MCI.  One Department of Defense contract gave the company $45 million to build a cell phone network in Iraq.  But MCI had to subcontract that work to Ericsson, a Swedish company, because MCI is not in the domestic cell phone business.

“By awarding MCI these contracts, the federal government is bailing out a corrupt corporation with taxpayer dollars,” Schatz concluded.  “Unless the appropriate steps are taken to prevent new contracts with MCI, the government will fail to deter similar behavior by other corporations and continue to put tax dollars at risk.”

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.