WASHINGTON, D.C.—Senate Governmental Affairs Committee Chairman Susan Collins (R-ME) renewed her request that the General Services Administration (GSA) begin an in-depth examination of WorldCom Inc.’s financial and ethical dealings to determine whether the company should continue being eligible to bid on or receive government contracts. The Governmental Affairs Committee oversees contracting with the federal government.
In a June 6 letter to GSA Administrator Stephen A. Perry, Collins noted that a new report from GSA’s Inspector General (IG) supports her belief that GSA has failed to undertake a thorough evaluation of WorldCom’s suitability as a federal contractor, and urges the agency to begin the formal proceedings. In the June 2, 2003, report, the IG recommends that GSA initiate suspension proceedings against WorldCom, Inc. and its subsidiary, MCI WorldCom Communications, Inc.
“Although I reserve judgment on the ultimate question of WorldCom’s suitability as a federal contractor, I hope that GSA will promptly follow the IG’s recommendation and perform the type of probing investigation and analysis that, in my view, should have occurred months ago,” Collins said.
Last year, WorldCom, which now does business as MCI, was accused of fraudulently bolstering its bottom line by at least $9 billion. Several of its former employees have pleaded guilty to criminal charges, and in July 2002, the company filed a Chapter 11 bankruptcy petition. Last month, WorldCom agreed to pay a $1.5 billion 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. But that amount will be reduced to $500 million in proportion to the amount most creditors are receiving as part of WorldCom’s proposed plan to emerge from bankruptcy.
“Taxpayers deserve answers to the many questions raised by WorldCom’s activities,” Collins said. “Unfortunately, GSA seems to have relied extensively on WorldCom’s own representations in conducting what appears to be an inadequate investigation of the company’s actions. Although some neutral parties appear to have been consulted, I see no indication that GSA considered significant contrary evidence raised by other sources.”
Collins’ letter is posted on the committee’s website at http://govt-aff.senate.gov