Congressional Committee Investigates 15 E-rate Vendors
~ Vendors listed below ~
Message Posted July 25, 2003
Starting with the denial of almost $1 billion worth of requests for IBM in Year 5 and the arrest of officials from Connect 2, Representatives Billy Tauzin (LA) and Jim Greenwood (PA) are continuing their pursuit into identifying alleged fraud and abuse by certain E-rate service providers.
Last week the House Energy and Commerce Committee sent letters of inquiry to 15 E-rate vendors (listed below), asking for extensive, very detailed information. Although the letters did not identify these companies as having defrauded or abused the program, a spokesman for the Committee said, "Based on some of the evidence that we've reviewed already, it's clear that some vendors have gamed the system. We're trying to find out whether these are just isolated incidents or are part of a greater pattern of abuse."
Below is some of the data being requested by the committee:
(1) "A list of all E-rate clients and, for each such client, explain the types of services performed and the amount of money received for such services during each year of the relevant time period. Provide all contracts and agreements relating to such services."
(2) "All records relating to the marketing or promotion of your E-rate services, including but not limited to (i) internal records relating to plans, policies, or practices to increase or improve your E-rate business; and (ii) records relating to communications with clients or potential clients regarding increasing or maximizing E-rate funding."
(3) "All records relating to the provision of assistance by your company to any E-rate applicant regarding development of its Form 470 or Form 471 submission to USAC."
(4) "All records relating to any request, offer, promise, commitment or agreement, whether written or oral, between you and any potential E-rate applicant, under which your company would provide, either directly or indirectly through any third party, financial assistance to such applicant to help it meet its required share of E-rate-funded costs, including but not limited to any request or offer of free or reduced cost services or equipment or assistance."
In addition, IBM was asked to provide "All records relating to E-rate-related services provided to IBM (or any of IBM’s E-rate clients or potential clients) by Alpha Communications, Inc., including but not limited to (i) all records of communications between or among IBM, Alpha, and IBM E-rate clients or potential clients with respect to such services; and (ii) all contracts or statements of work agreed to between IBM and Alpha."
The list of companies receiving the Committee's letter are as follows:
Alpha Communications, Inc.
Avnet, Inc., Tempe, AZ
Checkpoint Communications, Costa Mesa, CA
Computer Assets, Inc., Espanola, NM
Ed-Tec, Inc., Lakewood, NJ
Expanets of North America, Englewood, CO
IBM
Micro Systems Enterprises, Houston, TX
NEC Business Network Solutions, IncIrving, TX
Network Konnection, Inc., Rockville, MD
SBC Datacom, Richardson, TX
SBC Global Services, Inc., San Antonio, TX
Siemens Enterprise Networks, New York, NY
Southern New England Telephone, Dallas, TX
Spectrum Communications Cabling Services, Inc., Corona, CA
jtschell@comcast.net
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(717) 730.9060 (fax)
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