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Groups Want WorldCom Banned From Federal Contracts

Oct 30, 2002 | AP

Nine labor and advocacy groups have united in an attempt to block WorldCom Inc. from winning future government contracts.

The groups sent a letter to the General Services Administration Wednesday urging the government to suspend WorldCom from bidding on federal contracts.

"WorldCom's behavior has harmed both the telecommunication sector and the larger U.S. economy and it should be punished for its actions," the letter said.

WorldCom blamed the Baby Bells and their operating companies for the orchestrated efforts against the Clinton-based corporation, which filed for Chapter 11 bankruptcy protection in July.

The Bell companies have asked the Federal Communications Commission to revoke the licenses WorldCom needs to operate, maintaining it would be bad for the industry and consumers if WorldCom emerged from bankruptcy without its massive debt load.

Among the groups that urged the GSA to bar WorldCom from bidding on federal contracts is the 700,000-member Communications Workers of America. WorldCom does not have unionized workers.

"WorldCom not only deserves debarment from federal contracts but should be broken up and its valuable subsidiaries, including MCI, spun off or sold to responsible companies," CWA president Morton Bahr said at a news conference, Dow Jones Newswires reported.

WorldCom responded, "It's unfortunate that a major labor union is attacking the jobs of 63,000 WorldCom employees in an effort to shield its members from competition. CWA's sole interest in this stems from its cozy relationship with the Bell companies, whose stated goal is to prevent WorldCom from emerging from bankruptcy."

Joining with the CWA in signing the letter were the National Consumers League, Gray Panthers, Labor Council for Latin American Advancement, National Black Chamber of Commerce, Asian Pacific American Labor Alliance, American Association of People with Disabilities, Community Action Partnership and Native American Chamber of Commerce.

WorldCom, parent of No. 2 long distance carrier MCI, filed for Chapter 11 bankruptcy protection in July following disclosures that it had disguised more than $7 billion in expenses with fraudulent accounting, helping to boost revenues and report profits instead of losses.

The revelation of the accounting fraud led to criminal charges against several former top executives.

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