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Old 06-10-2003, 09:05 PM   #1
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Something Stinks: Pentagon gives Bankrupt Worldcom a Job

Pentagon Hands Major Iraq Deal to Scandal-Ridden WorldCom

Thursday 22 May 2003

NEW YORK: The Pentagon made an interesting choice when it hired a US company to build a small wireless phone network in Iraq: MCI, aka WorldCom Inc, perpetrator of the biggest accounting fraud in American business and not exactly a big name in cellular service.

The Iraq contract incensed WorldCom rivals and government watchdogs who say Washington has been too kind to the company since WorldCom revealed its US$11bil (RM41.8bil) accounting fraud and plunged into bankruptcy last year.

"We don't understand why MCI would be awarded this business given its status as having committed the largest corporate fraud in history," said AT&T Corp spokesman Jim McGann.

"There are many qualified, financially stable companies that could have been awarded that business, including us."

"I was curious about it, because the last time I looked, MCI's never built out a wireless network," said Len Lauer, head of Sprint Corp's wireless division.

The contract in Iraq is part of a short-term communications plan costing the Defence Department about US$45mil (RM171mil), said Lt. Col. Ken McClellan.

The Pentagon also plans to have Motorola Corp establish radio communications for security forces in Baghdad, a deal worth US$10mil to US$25mil (RM38mil to RM95mil) depending on the options exercised, said McClellan, a Pentagon spokesman.

Secret Dealings

The contract with WorldCom -- which plans to adopt the name of its MCI long distance unit when it emerges from bankruptcy -- has prompted grumbling in the telecommunications industry from people who say it was not put up for bids.

"We were not aware of it until it showed up in some news reports," Motorola spokesman Norm Sandler said.

McClellan said he had no details on the process that led to the deal, which he said was signed early this month. WorldCom spokeswoman Natasha Haubold declined to comment on details of the contract.

The company is to build a small wireless network with 19 cell towers that can serve 5,000 to 10,000 mobile phones used by reconstruction officials and aid workers in the Baghdad area.

The network, using the GSM (Global System for Mobile communications) wireless standard dominant in Europe and the Middle East, is expected to be running by July.

"This is an interim, quick government solution -- this is not the basis for some national long-term solution for Iraq," McClellan said. "That will probably have to be undertaken by the Iraqis."

WorldCom is not a commercial wireless carrier. It once resold other wireless carriers' service in the United States but dropped that approach recently.

However, Haubold said her company is fully qualified to perform the Iraq work.

'Deep' Relationship

She pointed to the company's work on a wireless system in Haiti in the 1990s and a 2002 contract, in which it served as a subcontractor, to provide long-distance connections for a wireless network in Afghanistan.

McClellan agreed that WorldCom's experience in Haiti and Afghanistan is "analogous work" to what is needed in Iraq.

Haubold also stressed the company's overall deep relationship with the US military and government.

In fact, a recent review by Washington Technology, a trade newspaper that follows computing-related sales to the government, found that WorldCom jumped to eighth among all federal technology contractors in 2002, with US$772mil (RM2.9bil) in sales.
It was the first time WorldCom cracked the top 10.

That US$772mil figure refers only to deals in which WorldCom is the prime contractor to federal agencies. The company gets much more taxpayer money -- exactly how much is not disclosed -- from state contracts and from federal deals in which it is a subcontractor.

That infuriates WorldCom critics, who say the government has kept the company afloat while the General Services Administration barred Enron and Arthur Andersen from getting contracts after their scandals emerged.

US Govt Bailouts

They also say it shows how little WorldCom would be hurt by the proposed US$500mil (RM1.9bil) fine the company has agreed to pay to settle Securities and Exchange Commission fraud charges.

"The US$500mil is in a sense, laundered by the taxpayers," said Tom Schatz, president of Citizens Against Government Waste.

Although the Iraq wireless deal is minor compared to other government contracts WorldCom has won -- including a satellite data pact announced Tuesday with the National Oceanic & Atmospheric Administration -- Schatz found it questionable.

"Why would you have a company that is not really in that line of business providing that service for another country?" he said. "Given the circumstances and the bailout the government seems to be engaged in, that is certainly is not fair to their competitors or the taxpayers."

McClellan declined to comment on whether the WorldCom fraud made the company a bad choice for the Iraq contract.

"That would probably be a question for the lawyers," he said.

Last year, Sprint and Global Crossing Ltd, another WorldCom rival, complained to the General Accounting Office about a US$450mil (RM1.7bil) contract awarded by the Defence Information Systems Agency to WorldCom for a computer network used by Pentagon scientists.

The GAO, the investigative arm of Congress, said the Defence agency "relied on grossly inaccurate financial information in making a determination that WorldCom was a responsible contractor."

But the GAO said it lacked the jurisdiction to rule on the complaint. -- AP

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Old 06-10-2003, 10:24 PM   #2
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So, We need the GAO because???
Eliminating that office should save millions..
*Trying to figure out how to get this across to people who don't
pay attention*

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Old 06-11-2003, 02:02 AM   #3
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I didn't read the article you posted about the ties between high Pentagon employees and (defense) organisations that well, even when it was quite interesting (and disturbing). Do you know about any ties between WorldCom and the Pentagon?
It is really strange to see that even now WorldCom is rewarded a contract without a bidding process, considering their reputation in the recent past. Shouldn't companies that are rewarded government contracts be of good behaviour? Strange...

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Old 06-11-2003, 02:28 AM   #4
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its not strange! its corrupt! cant everyone see this?! are there people blind enough not to see the stupidity in this?!
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Old 06-11-2003, 10:03 AM   #5
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This definitely stinks.

I'd certainly like to find the connection this admin has to worldcom.
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Old 06-11-2003, 10:13 AM   #6
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I am sure you could find "connections" between the Administration and each of the major telecom companies.

And who will raise the issue - the telecom that did not get the contract (here AT&T).
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Old 06-11-2003, 10:21 AM   #7
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thats pretty ridiculous.

however if they wanted the absolute best network they wouldnt have awarded an 'american' company with the contract.
regardless it stinks. not that country of origin really matters anymore...
im the candyman. and the candyman is back.
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Old 06-11-2003, 10:31 AM   #8
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This burns me up. They give a contract to a bunch of crooks?? The idiots.
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Old 06-11-2003, 10:47 AM   #9
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"This is an interim, quick government solution -- this is not the basis for some national long-term solution for Iraq," McClellan said.
I think this says it all.
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Old 06-11-2003, 01:13 PM   #10
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smells like bad fish

well, the did not choose Global Crossing (one of my friend's dad's co's...)
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Old 06-11-2003, 01:21 PM   #11
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Any statistics avail. How much money the different Telecommunication companies spent over the last years (incl. election campaigns) to which party?

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Old 06-11-2003, 02:48 PM   #12
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*sniff* *sniff* No actually that smells about right.
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Old 06-11-2003, 02:51 PM   #13
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Ken Lay - ENRON is playing golf
He gave boatloads of money to Bush and Co.

Hillary's Dirty Dough

Sen. Hillary Clinton, who has attacked President Bush in the corporate corruption scandals, has at least one close connection with people who are in deep trouble because of the alleged corporate funny-money games they've been playing while pumping cash into her campaign coffers.

Sam Waksal, the recently indicted CEO of ImClone, for example, gave the New York Democrat $27,000, which she refuses to return.

Waksal, indicted for insider trading, bank fraud and obstruction of justice, has been one of Hillary's financial angels - she's been the No. 1 recipient of his generosity, according to the New York Post's ace political reporter Deborah Orin. In the story "Hill's Filthy Lucre" in today's Post, Orin lists Waksal's contributions to Hillary:

$20,000 to her soft-money committee for her 2000 Senate race;

Another $2,000 given directly to that campaign;

$5,000 to HILLPAC, her political action committee, in 2001.
Orin reports that Waksal and his family have "funneled big bucks to a number of Democratic soft-money groups and candidates," noting that Clinton also got another $15,000 from the Waksal family and top ImClone execs during the 2000 race.
Another big Hillary supporter, Martha Stewart, a Waksal pal, is suspected of having used insider information to bail out of ImClone stock the day before news that the FDA was refusing to approve a widely touted anti-cancer drug made by the company was made public.

Stewart has been a source of large contributions to Democrats. According to, since 1999 she has kicked in a whopping $155,000 plus to Democrats, including $1,000 to Hillary's campaign fund on July 7, 1999.

As has reported, during a Middletown, N.Y., appearance, Mrs. Clinton complained that neither the Bush administration nor the Securities and Exchange Commission had "shown much leadership" as the (corporate) corruption unfolded.

In a direct reference to the president's remarks during a press conference, Clinton charged, "I don't think it is adequate to just say there are some bad people and that we're going to go after them," according to Middletown's Times Herald-Record.

But it's OK to take their money and keep it.

"She [Clinton] has no plans to return the money at this time. So far as we know, he did not give us any money in 2002," Clinton spokeswoman Karen Dunn told Orin.

Unlike Hillary, some Democrats have already said they intend to return their Waksal donations, including Rep. Nita Lowey, D-Westchester, who is picking a charity for the $1,000 she got back in 1998, Orin reported, adding that Democratic presidential hopeful Sen. John Kerry, D-Mass., is also giving to charity years of campaign donations he got from the Waksal family.
Waksal , Imclone is going to jail for seven years.
Martha is next.
They are GUILTY of giving money to wrong people.
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Old 06-11-2003, 09:02 PM   #14
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Originally posted by Popmartijn

I didn't read the article you posted about the ties between high Pentagon employees and (defense) organisations that well, even when it was quite interesting (and disturbing). Do you know about any ties between WorldCom and the Pentagon?
It is really strange to see that even now WorldCom is rewarded a contract without a bidding process, considering their reputation in the recent past. Shouldn't companies that are rewarded government contracts be of good behaviour? Strange...

C ya!

Pentagon holds the phone

Government sees no peril but keeps an eye on WorldCom's military communications contracts.
June 27, 2002: 1:59 PM EDT

WASHINGTON (CNN) - WorldCom holds billions of dollars of federal contracts, including several with the Pentagon that are vital to maintaining global military communications.

Pentagon officials told CNN Thursday they do not believe the company's current financial problems will jeopardize national security, but they also said they will continue to monitor the situation.

Under a nine-year, $400 million contract with the Pentagon's Defense Information System Agency (DISA), WorldCom (WCOM: Research, Estimates) provides services for the military system that handles all communications traffic ranging from "unclassified" through the "secret" level.

The company also holds a 10-year, $4 billion contract to provide fiber and satellite communications services through the DISA for all federal users stationed in the Middle East, Caribbean, South America and Asia-Pacific.

And WorldCom recently was part of a team that won an eight-year, $7 billion Navy and Marine Corps intranet contract, providing secure access to voice, video and data communications.

As part of its work with the federal government, WorldCom was called in on Sept. 11 to ensure that military command and control networks between the Pentagon and forces around the world continued to function.

WorldCom also holds key contracts with the FAA, the Postal Service and the Congressional House of Representatives for telecommunications services.
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Old 06-16-2003, 09:53 PM   #15
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worldcom screwed america and americans...plain and simple...this administration is ridiculously light on ppl who commit crimes that shaft regular people.

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