MCI defends its federal record

MCI, the beleaguered telecom provider struggling to emerge from bankruptcy, struck back June 4 at critics who are urging the General Services Administration to debar the firm.

Public advocacy groups have issued repeated calls for GSA to ban MCI from federal circles ever since the company — then called WorldCom Inc. — admitted to overstating its profits by more than $9 billion in a 2002 corporate scandal. The most recent broadside came from Sen. Susan Collins, (R-Maine), who earlier this week said that GSA's investigation into MCI was itself suspect.

Jerry Edgerton, senior vice president of MCI Government Markets, told reporters June 4 that MCI's government division had nothing to do with the ethical lapses. "As a business unit, we had been practicing ethical behavior," he said. "Through this entire period of time we have conducted ourselves as a good government contractor should."

Collins, chairwoman of the Senate Governmental Affairs Committee, questioned GSA's handling of the matter.

"GSA's evaluation leaves many unanswered questions," she said in a written statement. "Rather than performing its own, in-depth inquiry into the company's alleged accounting fraud, which the [Security and Exchange Commission] noted last year was 'of unprecedented magnitude,' GSA appears to have relied very heavily upon WorldCom representations in determining the company's continued status as a federal contractor and in extending existing contracts."

Collins, who also leveled her concerns in a May letter to GSA Administrator Stephen Perry, said GSA seemed to have ignored some other sources of information. She specifically referred to a preliminary report by former U.S. Attorney General Richard Thornburgh, "which raised serious questions about WorldCom's corporate culture."

A GSA spokesperson declined to comment on the allegations, saying only that "GSA will continue to work with Senator Collins and the Senate Governmental Affairs Committee to provide any information that is needed."

The agency exercised the first of four possible one-year options late last year to extend MCI's place on the FTS 2001 contract, the primary contract vehicle that agencies use to buy long distance voice and data services. Edgerton pointed to that and several recent contract wins as evidence that the company's performance in the government is meeting agency needs.