DOJ, FCC Settle With HP (For $16.25 Mil!) Over E-Rate Fraud In Dallas, Houston ISDs
Back in June 2009, you may recall, the Dallas Independent School District and the U.S. Department of Justice settled up over the misuse of funds provided to the district for the feds' E-Rate program, which was created in 1996 to give "affordable access to telecommunications services for all
eligible schools and libraries, particularly those in rural and
economically disadvantaged areas." The DISD had to cough up $750,000 -- thanks, mostly, to yacht-lovin', Super Bowl-goin' Ruben Bohuchot, the former associate superintendent for technology sentenced to 11 years in years in prison in November '08 after two whistle-blowers stepped forward in Dallas federal court exactly five years ago this week.
Now comes word, from the DOJ and the Federal Communications Commission, which oversees the E-Rate program, that they've come to terms with Hewlett-Packard, which, according to the FCC's release, "lavished gifts on Dallas Independent School District and Houston Independent School District personnel in order to get contracts that included some $17 million in HP equipment." Per the settlement, HP's agreed to pay $16.25 million into the E-Rate program, with $1,424,969 of that going to the whistle-blowers, Dan Cain and Pamela Tingley.
From the settlement agreement, this summation of the allegations:
The United States contends that it has certain civil claims, as specified in Paragraph 2, below, against HP for engaging in the following conduct (the "Covered Conduct") during the period from 2002 to 2005 in the Dallas and Houston Independent School Districts: (1) conspiring to rig the competitive bidding of E-Rate contracts; (2) subverting the competitive bidding processes for E-Rate contracts through the provision of gratuities, including meals, trips, and tickets, to school district representatives in violation of school district policies or rules and E-Rate Program rules; and (3) unjust enrichment from E-Rate contracts received as a result of violations of the competitive bidding processes.
Says Tony West, Assistant Attorney General for the Civil Division of the Department of Justice, in the DOJ's release , "We will continue to pursue those who use improper inducements to undermine the integrity of this important program." To which FCC Chairman Julius Genachowski adds, "Today's settlement shows the extensive efforts of the FCC and DOJ to protect the E-rate program from waste, fraud, and abuse, and to deter misconduct in the future."
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