Congressmen call for probe of fraud-plagued phone fund for schools, libraries

Introduction

Two of the most powerful members of Congress who oversee telecommunications issues have started investigating financial shenanigans within the government’s controversial E-Rate fund.

The probes were announced following the release of a Center for Public Integrity report chronicling fraud and a lack of proper government oversight of the $2.25 billion program, which provides hefty discounts to help connect schools and libraries to the Internet. (See the Center report, which drew on documents acquired under the Freedom of Information Act and an FCC Inspector General’s investigation.)

House Energy and Commerce Committee Chairman W.J. (Billy) Tauzin, R-La., has started a preliminary investigation into charges the program lacks adequate oversight to prevent fraud.

“Schools are hooked up to the Internet for free and the federal government is robbed blind,” Tauzin spokesman Ken Johnson told TRDaily, a telecommunications industry newsletter. The Louisiana congressman has been a longtime critic of the E-Rate program.

On the Senate side, the incoming chairman of the Senate Communications subcommittee said one of his top priorities during this session will be reform of the program.

Sen. Conrad Burns, R-Mont., said he will lead the way on reforming the program. “We obviously have a big stake in this because of the large number of rural schools in Montana,” Burns told Medill News Service.

The chief congressional architect of the E-Rate fund, Sen. Jay Rockefeller, D-W.V., said the problems were overstated and that he would stand behind the program.

Rockefeller told the Charleston Daily Mail he is much more worried the Bush administration and the new Republican Congress will seek to kill the program.

Aides to Sen. John McCain, the incoming chairman of the Senate Commerce Committee, said his office was aware of the report and monitoring the situation, but had not yet decided whether or not to conduct investigations or hearings.