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Government Shouldn't Play Favorites in Telecom Industry
by Robert R..Eberle, Ph.D., GOPUSA
14 August 2003MCI

Why is the government treating MCI/Worldcom differently than Enron?

Let's say that you or I had an annual review by our employer regarding
our work performance. If the review contained words like "massive
fraud," "failings," "material weaknesses," "deficiencies," "not
presently responsible," "poor record of integrity and business ethics,"
and "serious concerns," I suppose a reasonable person would expect to be
fired, if not sued. So it should come as no surprise that these are just
a few of the words contained in a July 31 letter from the General
Services Administration to MCI/WorldCom notifying them that they were
being suspended from bidding on new federal contracts and face potential
debarment from any future contract work with the U.S. government.

The problem is, the words had been used exhaustively for nearly a year
and a half to describe MCI/WorldCom's scam that resulted in thousands of
employees losing their jobs and pensions and millions of investors
losing billions of dollars. The rippling impact on the entire telecom
sector resulted in layoffs and an even greater downturn in an already
hurting industry.

And what did the federal government do during that time? It rewarded
MCI/WorldCom's self-admitted fraud with nearly a billion dollars in
government contracts.

When the Enron and Arthur Andersen accounting shenanigans came to light,
the government immediately debarred the companies from bidding on
federal contracts. Not unlike MCI/WorldCom, thousands of employees, and
several of my friends, were immediately terminated and pensions became

MCI/WorldCom says that debarment by the government puts thousands of
remaining jobs at risk, and somehow that has become the mantra of
MCI/WorldCom supporters in the federal government. This inconsistency
begs the question: Why is there a double standard in how our government
punishes fraud and treats the victims of it?

Enron declared bankruptcy and Arthur Andersen dissolved. Enron is still
operating as a company under bankruptcy protection, just like
MCI/WorldCom. But Enron can't do business with the federal government
and MCI/WorldCom, until two weeks ago, benefited with hundreds of
millions of dollars in contracts from a very sympathetic Uncle Sam.
Despite the fact that the company had used bogus balance sheets in order
to win government contracts until they were caught last year. That is

MCI/WorldCom will make their case for why they shouldn't be debarred
sometime this month. A couple of weeks after that, a bankruptcy judge
will decide on whether or not to accept MCI/WorldCom's reorganization
plan. Undoubtedly, consumers benefit when given a choice in long
distance carriers. And if MCI/WorldCom's reorganization is accepted,
they are free to offer that service to businesses and consumers based
upon the free market values of capitalism.

But until the time that the federal government has determined that
MCI/WorldCom is in full compliance with the most basic tenets of ethical
business practices, and that the corrupt, win-at-any-cost culture which
pervades the company is eliminated, taxpayer dollars should be denied
and MCI/WorldCom must be debarred.

A slap on the wrist only serves to encourage others to do the same, and
the government will be responsible for setting the bar so low that
government contracting standards will not even be worth the paper on
which they are printed. Not unlike MCI/WorldCom's balance sheet for many

Bobby Eberle is President and CEO of GOPUSA.com

Email Bobby Eberle

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