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Verizon pressured to return money tied to contract scandal

Opponents of the Department of Education’s $120 million contract with Verizon aren’t letting the contract’s approval silence their criticism.

Manhattan Borough President Scott Stringer led a press conference today to demand that Verizon return hundreds of thousands of dollars that it earned through a contractor’s fraud.

City investigators found that Willard Lanham overbilled the DOE by $3.6 million while subcontracting with Verizon and IBM. The investigators’ report concludes that Verizon concealed irregularities in Lanham’s accounting until the department raised red flags of its own. Verizon made as much as $800,000 through the illicit transactions, according to the report.

Lanham, the man at the center of the scandal, was arrested and charged with mail fraud and theft, but his trial has not yet started.

Verizon officials said they would pay back the money, but Stringer said the fact that the company hasn’t done so already calls into question its integrity.

“You must return the money,” Stringer said. “You must send a signal to the city that you will be a good corporate citizen.”

A Verizon spokesman, John Bonomo, said the company is in talks about reimbursing the city.

“As we previously indicated, as a matter of goodwill we have told DOE we would return any inappropriate profits,” Bonomo said. “We have been in discussions with DOE.”

Many of the people standing behind Stringer outside the Municipal Building were members of the Communication Workers of America, a union that includes many Verizon workers. CWA members protested the contract during the Aug. 17 Panel for Educational Policy meeting when it was approved, but they said that their objection was to the approval coming while they were on strike. CWA ended its strike Aug. 22 and is set to resume negotiations with Verizon’s management tomorrow.

“Negotiations are still going on but just because we’re back to the table doesn’t mean Verizon will do the right thing,” said John Feaster, a staff representative with CWA’s Local 1101.

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