HOUSE COMMERCE PANEL ISSUES SUBPOENA TO GET RECORDS ON E-RATE
The House Commerce Committee issued a subpoena to the Universal Service Administrative Co. (USAC) to obtain nonredacted copies of documents the committee had requested in March. USAC administers the Universal Service Fund (USF) for the FCC, including the E-rate program, which Committee Chmn. Tauzin (R-La.) suspects is riddled with fraud (CD March 14 p6). Committee spokesman Ken Johnson described the subpoena as “friendly” and said USAC had been “fully cooperative” with the committee’s investigation. The committee is seeking information on companies and individuals for potential e-rate fraud, which could include IBM.
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The committee has received more than 40,000 pages of documents from USAC, including 1,000 that were redacted, Johnson said. The information came in response to a March 13 letter from Tauzin and Oversight & Investigations Subcommittee Chmn. Greenwood (R-Pa.). Tauzin has expressed concerns about fraud in the E-rate program, which he believes could be as high as $200 million. E-rate funds Internet and telecom deployment to libraries and schools. The program is allocated about $2.25 billion each year.
The redacted portion of the documents usually pertained to either people or companies being investigated, Johnson said. There are at least 30 active state or federal investigations into the E-rate program, he said, and 7 others already have been closed. “It is critically important for us to obtain this information if we are to be successful in rooting out fraud and abuse,” Johnson said: “Clearly millions of dollars are being wasted and in some cases even stolen by unscrupulous individuals. We must put an end to it.” Johnson said the committee would hold hearings on e- rate sometime this summer.
One e-mail appeared to implicate IBM as a potential subject of investigation, although Johnson stressed that he couldn’t confirm whether that company was under investigation. Citing an example of the redacted documents, Johnson read an e-mail that the committee received. The e- mail, between 2 USAC employees, said: “Do you want [redacted] put on watch? Just concerned that they are our biggest provider.” Johnson said that IBM was the redacted subject of that e-mail. An IBM spokesman declined to comment.
A spokesman for USAC said he couldn’t comment on any investigations and couldn’t confirm whether IBM was under investigation. He said the subpoena was a procedural step to help protect USAC from civil liability. He also stressed that the redacted proportion of documents was relatively small compared with the large number of documents it gave the committee. “It was a Herculean effort,” the spokesman said of USAC’s work to provide the committee with the documents by deadline.