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<nettime> WorldCom gets Iraq contract
geert lovink on Mon, 23 Jun 2003 15:26:41 +0200 (CEST)

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<nettime> WorldCom gets Iraq contract

(A I am trying to catch up, I missed this hilarous news item about
WorldCom (soon-be-renamed-into MCI) winning a telecom contract in Iraq.
Stories about fundamentalist right supporting WorldCom in the mid-late
nineties have been around for a long time and plenty of evidence for this
can be found in old issues of Wired magazine. The Washington Christians
are damned good in forgiving... amongst each other. /geert)


WorldCom's Iraq deal assailed Critics wonder why MCI got contract after
fraud scandal


NEW YORK -- The Pentagon made an interesting choice when it hired a U.S.
company to build a small wireless phone network in Iraq: MCI, aka WorldCom
Inc., perpetrator of the biggest accounting fraud in U.S. 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 $11 billion 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," AT&T
Corp. spokesman Jim McGann said. "There are many qualified, financially
stable companies that could have been awarded that business, including

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

The contract in Iraq is part of a short-term communications plan costing
the Defense Department about $45 million, said Lt. Col. Ken McClellan, a
Pentagon spokesman.

The Pentagon also plans to have Motorola Corp. establish radio
communications for security forces in Baghdad, a deal worth $10 million to
$25 million depending on the options exercised, he said.

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 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.

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
U.S. 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
$772 million in sales.

It was the first time that WorldCom cracked the top 10.

That $772 million 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.

They also say it shows how little WorldCom would be hurt by the proposed
$500 million fine that the company has agreed to pay to settle Securities
and Exchange Commission fraud charges.

"The $500 million 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 not fair to their competitors or the taxpayers."

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