NEW YORK, July 28 (UPI) -- Verizon Communications Inc. wants the federal government to suspend MCI from government contracts pending an investigation by the Justice Department.
The request came Monday as Verizon and other MCI competitors accused WorldCom Inc., which does business as MCI, of scheming to redirect telephone traffic to avoid hundreds of millions of dollars owed to local telephone companies.
If the rerouting is confirmed, it could pose significant new problems for MCI's Chapter 11 reorganization proceedings and its business with federal agencies, the Wall Street Journal reported. The U.S. government is MCI's largest customer.
Verizon claims MCI's alleged fraudulent practices date to at least the early 1990s and are continuing, giving it unfair competitive advantage in bidding for government contracts.
AT&T, SBC and Verizon complain MCI's recent settlement with the government over securities fraud charges was too lenient, and the company should be liquidated, rather than reorganized.
