Waste and Fraud Besiege U.S. Program to Link Poor Schools to Internet

By SAM DILLON

Published: NY Times, June 17, 2004

WASHINGTON, June 16 – When the El Paso school system wanted to upgrade its Internet connections three years ago, it tapped into a federal program that offers assistance for such projects.

The program paid the International Business Machines Corporation $35 million to build a network powerful enough to serve a small city. But the network would be so sophisticated that the 90-school district could not run it without help.

Foreseeing the problem, I.B.M. charged the district an additional $27 million, paid by the federal program, to build a lavish maintenance call-in center to keep the network running. The center operated for nine months. Then, with no more money to support it, I.B.M. dismantled it and left town.

The federal effort to help poor schools connect to the Internet, the E-rate program, which collects a fee from all American phone users to distribute $2.25 billion a year to such schools and libraries, wasted enormous sums as El Paso built its extravagant network in the 2001-2 school year, according to documents and federal lawmakers.

But the problems have not been there alone. In Brevard County, Fla., school officials used E-rate money to install a $1 million network server, a powerful device more suited to the needs of a multinational corporation, in a 650-pupil elementary school. And just three weeks ago in San Francisco, a subsidiary of the computer giant NEC agreed to plead guilty to two federal felony counts related to the program.

Across the nation in recent months – in El Paso and in New York and Pennsylvania, in Puerto Rico and Atlanta, in Milwaukee and Chicago – investigations or audits of the program have turned up not only waste but also bid-rigging and other fraud, according to lawmakers and investigators. A report issued last week by the Federal Communications Commission, which oversees the E-rate program, said 42 criminal investigations were under way.

On Thursday, Congress is to open hearings on all that has gone wrong. The hearings will be held by the House Energy and Commerce Subcommittee on Oversight and Investigations, whose chairman, Representative James C. Greenwood of Pennsylvania, says the F.C.C.’s supervision was weak.

Mr. Greenwood said that since schools often must pay only 10 percent of the cost of equipment and services while E-rate picks up the rest, “contractors have mastered the art of coming into these districts, recommending gold-plated architecture, and school officials, buying at 10 cents on the dollar, take everything they recommend.’

‘The F.C.C.’s supervision was weak’? Weak? It wasn’t weak, it was non-existent. Michael Powell’s FCC never saw a corporate thief without offering to hold the swag-bag for it and shield it from the cops. Once again, corporate greed trumps social need and the US Treasury becomes nothing more than a cash cow for corporate profits at the expense of one of the few remaining programs meant to help less rich schools keep up with technology.

There is simply no shame any more.

College Crisis in California

It seems like whenever a state has a fiscal crisis, education funds are at the top of the list for cuts. The budget crunch in California–which is being repeated all across the nation–has ‘necessitated’ large-scale cuts in funding for community colleges just at a time when one of the largest classes in CA history is graduating.

The report [by the National Center for Public Policy and Higher Education] criticizes the state for abdicating its responsibility to prepare for the new tidal wave of new college students — more than 700,000 high school graduates bound for college from last year to the end of the decade. Most are Latino, and many will be the first in their families to attend college. And although three-fourths of them are headed for community colleges, those systems are not currently funded to serve their existing base of students, the report concludes.

“We saw these students coming; everyone knew they were there,” said Patrick Callan, president of the National Center for Public Policy and Higher Education.

Yet increased demand and shrinking state support have resulted in an estimated 175,000 students forgoing community colleges in recent years and an estimated 25,000 eligible students being turned away from California State University and University of California systems for the coming year, according to the report.

“Multiply that by another five or six years and you will have an educational and economic catastrophe for California,” Callan said.

The good news is that a coalition of business, labor and community groups are beginning to grapple with the problem that the State government has ignored, although nothing they’ve proposed will solve the problem by itself. But the question is: why is this happening?

It’s happening, at least in part, because California was raped mercilessly by the Texas energy industry, who stole–that’s the only word for it–$$billions$$ from CA’s treasury by creating phony shortages to justify massive increases in their prices–as much as $250/kilowatt-hr. That crime all but emptied CA’s coffers at a time when other factors were putting enormous pressure on the budget. CA was deeply in the red and cuts had to be made.

This is an over-simplified picture, I realize, but there’s no getting around the fact that much less harsh cuts would have had to be made were it not for the embezzlement by Texas’ energy corps. That money, despite CA’s slam-dunk lawsuit, will likely never be recovered. So who is paying for this theft? The ones who usually pay for it–kids.

Community colleges are magnets for poor, low-income, and minority kids who want to make their lives better because they’re affordable. Without the community colleges, these kids are cut off from a chance for a brighter future. Is the fact that they are poor and often minority the reason this problem has been ignored until now? Is this a class and race war all at once? I’d hate to think these kids were the ones the state legislature voted to dump on because Latinos don’t count….