CWA: GSA Decision Rewards WorldCom for its Corporate, Public Abuse

Following is a statement by the Communications Workers of America on the decision by the General Services Administration to allow WorldCom to continue doing business with the federal government:

The decision by the General Services Administration to allow WorldCom Inc., to continue doing business with the federal government is an insult to taxpayers.

Just eight days after the Securities and Exchange Commission reported a new high for WorldCom’s financial misreporting – in excess of $9 billion -- and announced that it was broadening the investigation into what is the biggest corporate fraud in history, the GSA chooses to reward the country’s biggest corporate lawbreaker.

GSA’s decision means the American public will continue to subsidize the excesses and abuses of WorldCom executives, many of whom are facing criminal charges in addition to civil fraud liability.

This stunning “disconnect” between what one federal agency says and what another does raises real concerns about the Bush administration’s commitment to rooting out financial wrongdoers and safeguarding the workers, investors and pensioners who have lost billions in the WorldCom debacle.

In fact, in December 2001, the Bush administration overturned a rule put in place by President Clinton that insisted that the federal government would not do business with corporations that perpetrated civil and criminal fraud. If this rule were still in place, ethically challenged companies like WorldCom wouldn’t have another opportunity to fleece the public and taxpayers.

CWA and a coalition of organizations have called on GSA and the federal government to continue this policy and bar WorldCom and other companies that violate the law from participating in future federal contracts. Instead, GSA took the meaningless step of declaring that former WorldCom officers can no longer do business with the federal government.

The reason for this favoritism is not clear. The Bush administration should treat these corporate crimes seriously and show that it is serious about cracking down on corporate fraud and abuse. Talk is cheap -- the public expects and demands real action.

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