A group of union representatives and other activist groups took a stand Wednesday that WorldCom "should no longer benefit from the privilege of contracting with the federal government" because of the accounting problems that led to misstated earnings and the telecommunications company's bankruptcy.
The groups, called on the General Services Administration (GSA), the federal agency that oversees government contracting, to suspend the firm from bidding on contracts.
WorldCom should be made an example, and the GSA should use its "hundreds of billions of dollars of government purchasing power to deter" corporate misdeeds, Will Thomas, director of the corporate accountability project at the Gray Panthers activist group said at a press conference.
The groups also sent a letter to GSA on Wednesday, arguing that the agency has suspended the bankrupt Enron energy firm and its auditor, Arthur Andersen, from bidding on federal contracts because of similar accounting misdeeds and that WorldCom should meet the same fate. GSA may suspend a firm if "adequate evidence exists that it committed fraud, made false statements to federal securities regulators, or committed 'any other offense indicating a lack of business integrity or business honesty,'" the letter said.
In 2001, WorldCom won $425 million worth of federal contracts. Michael Salsbury, WorldCom general counsel, noted that none of the company's problems have affected WorldCom's ability to serve its customers, whether they are the federal government, businesses or consumers.
Morton Bahr, president of the Communications Workers of America (CWA), called for WorldCom to be split and its parts be allowed to operate separately or be sold to other firms. "The last thing we need today is for WorldCom to re-emerge debt free and wreak further havoc" in the telecommunications industry, he said, adding that the best way to protect the jobs of WorldCom employees is to divide the firm.
Bahr also complained that company employees were precluded from joining a union under its former executive, Bernard Ebbers, whom he described as "viciously anti-union." The workers at companies that Bahr recommended as purchasers of WorldCom's business units, such as Verizon Communications, are unionized by CWA.
Salsbury attacked the notion that punishing WorldCom would protect jobs. "If this effort by CWA were successful, the only winners would be the companies seeking to retain 100 years of monopoly control," he said. "The losers would be innocent WorldCom workers and the millions of consumers who are finally enjoying a competitive alternative."