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CWA: Government Inaction Backs Lawbreaking Companies

Following is a statement by Morton Bahr, president of the Communications Workers of America, on the effort to ban WorldCom Inc., from obtaining federal contracts.

It is nothing short of outrageous that, just one day after the U.S. Securities and Exchange Commission (SEC) announced that it was expanding its major fraud investigation into WorldCom Inc., another branch of the federal government – the Veterans Administration – moved to enter into a multi-million dollar deal with the scandal-ridden telecommunications firm.

The Bush Administration must decide if the acceptance of SEC Chairman Harvey Pitt’s resignation is the start of a new approach to ending corporate crime or just window dressing.

CWA and eight other organizations pressed the General Services Administration on October 30th to find WorldCom unfit to participate in future federal contracts. This week, the SEC filed additional charges against WorldCom, declaring that the company inflated earnings by an additional $2 billion, bringing the total amount of its financial misstatements to more than $9 billion.

On the eve of Veteran’s Day, we repeat our call to the federal government: debar WorldCom from future federal contracts.

The VA’s action demonstrates the need for the General Services Administration to act now to debar WorldCom. It is outrageous that the GSA is sitting by idly while huge new federal contracts are being handed out to the firm that has been charged in the largest financial mismanagement scandal in U.S. history. The GSA acted swiftly to bar Enron and Arthur Andersen on the grounds that they were unfit to do business with the government. Why is the Bush Administration not taking similar action against WorldCom, which has committed abuses that dwarf those of Enron and Arthur Andersen?

The VA contract, the first awarded by the federal government since WorldCom’s corruption was disclosed, clearly shows that the GSA must act now before WorldCom is rewarded yet again for its corporate crimes. CWA again calls on the federal government to hold WorldCom to the same standards that were applied to Andersen and Enron.

The only appropriate negotiations for the SEC and the Bush Administration should involve how to sell or spin off WorldCom’s assets to protect the jobs of the workers at the companies WorldCom holds captive. In the meantime, no new contracts should be awarded to America’s biggest corporate criminal – WorldCom.

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