MCI wins Iraq gig, shovels $500m to shareholders
Iraq saved for GSM
MCI has won the gig to build Iraq's mobile phone network. The value of the contract is undisclosed.
Sensibly, the US Government ignored demands from Congressman Darrell Issa (R., San Diego) to ditch the outdated, 'French' GSM option, in favour of an All-American Qualcomm CDMA network. Technical considerations aside, the Middle East is an all GSM-zone. It makes sense for Iraq to be GSM too.
It's been a good couple of days for MCI, the company formerly known as Worldcom. Today the company agreed to pay shareholders $500m, around one week's revenue, in a settlement with the SEC over fraud charges concerning $9bn, give or take a billion, in inflated revenues.
Mitch Marcus, founder of BoycottMCI.com, slammed the SEC's "slap on the wrist". In a statement he declared that this settlement is "unlikely to provide solace to the tens of thousands of stock investors, mutual fund shareholders and pensioners who were taken to the cleaners by the fraud at WorldCom.
"The SEC had the opportunity here to recommend that WorldCom/MCI be liquidated through Chapter 7, as opposed to smoothly running the gauntlet via Chapter 11, and/or recommend that the Department of Justice commense criminal proceedings. The SEC dropped the ball and forced state Attorneys General to step in and take the tough, no-nonsense steps that the federal government should have in the first place...
"Nonetheless, the settlement sends a very strong message to the General Services Administration (GSA). If the GSA debarred Arthur Andersen (fined just $7 million by the SEC), there should be no doubt but that the GSA should cut off WorldCom/MCI from the federal contracting gravy train. WorldCom/MCI is manifestly unfit to continue as a company and, at an absolute minimum, there is no reason why U.S. taxpayers should be the disgraced firm's No. 1 customer. In fact, there are today 500 million new reasons why the GSA and all the consumers should boycott WorldCom/MCI."
MCI's Iraq gig shows that the company remains very much on the US government gravy train.
The SEC deal will have to be squared by a couple of judges, but it looks at long last that the company formerly known Worldcom could break free from the consequences of its disastrous, corrupt past. Who knows, CEO Michael Capellas may even one day justify his obscenely large pay package. ®
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