Senate Governmental Affairs Committee Chairman Collins “Extremely Disturbed” by Latest MCI WorldCom Allegations

WASHINGTON, D.C.-Senate Governmental Affairs Committee Chairman Susan Collins (R-ME), whose committee is conducting an investigation into the federal government’s contracting process with MCI WorldCom, today commented on the latest troubling allegations about the telecommunications company.

“This weekend’s reports containing new allegations of fraud and deceit at MCI WorldCom are extremely disturbing. The Governmental Affairs Committee has been conducting an investigation to determine whether or not the federal government should continue to contract with MCI WorldCom. Under the law, generally no federal agency can contract with a company unless it is found to possess adequate integrity and ethics to do business with the government.

“These latest allegations suggest that MCI was engaging in fraud long before WorldCom acquired it, and may still be engaging in fraud today. If these allegations are true, it would undermine MCI WorldCom’s claims that the fraud was limited to just a few ‘bad apples,’ and that the company has been thoroughly reformed. Even worse, if these allegations are true, MCI WorldCom may be guilty of defrauding the government, its customers, and other telecommunications firms.

“I am particularly concerned about the possibility that MCI WorldCom has engaged in fraud in its provision of government services. Some allegations even suggest that this activity may have compromised secure information. To the extent that these allegations prove true, they raise additional questions about MCI WorldCom’s business practices and ethics.”

Earlier this year, Collins asked the General Services Administration to begin an in-depth examination of whether the federal government had conducted a sufficiently thorough analysis of WorldCom Inc.’s financial and ethical dealings before deciding to contract with the company. The Governmental Affairs Committee oversees contracting with the federal government.

As part of the committee’s efforts to gather information about the government’s contracting process with WorldCom, Collins also has asked seven other federal agencies for information regarding any contracts between the agencies and WorldCom initiated or extended within the last year. The agencies are the Postal Service, the Department of Veterans’ Affairs, the State Department, the Department of Defense, the Department of Commerce, the Social Security Administration, and the Federal Aviation Administration.