WASHINGTON, D.C.-Senate Governmental Affairs Committee Chairman Susan Collins (R-ME) said today that she is dissatisfied with the General Services Agency’s (GSA) response to her inquiry on whether WorldCom Inc. should continue being eligible to bid on or receive government contracts. WorldCom, which now does business as MCI, has been accused of fraudulently bolstering its bottom line by at least $9 billion. Four of its former employees have pleaded guilty to criminal charges.
On May 16, Collins wrote a letter to GSA Administrator Stephen A. Perry asking for a detailed report on the agency’s evaluation of WorldCom’s viability as a government contractor. Last month, WorldCom agreed to pay $500 million fine imposed by the Securities and Exchange Commission (SEC) in settlement of charges that the company defrauded its investors. It was the largest fine ever imposed by the SEC on a non-Wall Street company.
“GSA’s evaluation leaves many unanswered questions,” Collins said Tuesday. “Rather than performing its own, in-depth inquiry into the company’s alleged accounting fraud, which the SEC noted last year was ‘of unprecedented magnitude,’ GSA appears to have relied very heavily upon WorldCom representations in determining the company’s continued status as a federal contractor and in extending existing contracts. In addition, GSA appears to have ignored certain outside sources of information, such as the preliminary report by former U.S. Attorney General Richard Thornburgh, which raised serious questions about WorldCom’s corporate culture,” Collins said. “The GSA appears to have focused on WorldCom’s capacity to perform the contract without consideration of the company’s business ethics and integrity, both of which are integral in determining whether a company is a ‘responsible’ government contractor.”
Collins said the committee will continue its examination of GSA’s activities regarding WorldCom.