The D.C.–based Center for Public Integrity issued a report January 9 warning that the $2.25-billion e-rate program, which subsidizes schools and libraries at a rate of 20 to 90% for telecommunications costs, is “honeycombed with fraud and financial shenanigans.” Released after charges were filed against a New York City Internet service for conspiring to steal millions of dollars in connection with the subsidy, the report is based on investigations by the Federal Communications Commission, according to the January 10 New York Times.
Mel Blackwell, a spokesman for the Universal Service Administrative Company that administers the e-rate plan, told the Times that problems were showing up because his company and the FCC were reviewing contracts that they considered high risk and that dated from the early years of the program, which was launched in 1996.
Lynne Bradley, director of government relations for the American Library Association’s Washington Office, said that “any waste or abuse should be thoroughly investigated and prosecuted to the fullest extent possible.” She added that the program has been under such intense scrutiny that fraud would probably turn out to be less widespread than the report suggested.
Posted January 13, 2003.