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NEC Admits To Ripping Off Schools Through E-Rate Program
MAurelius writes "The New York Times (regist. req'd) is reporting that NEC now admits to ripping off multiple low-income school districts by connecting them to the internet with equipment more advanced and expensive than necessary. Several orders of magnitude more expensive. All paid for by telephone rate-payers. That would be you."
And you expected any less with a pseudo-govermental federally mandated tax? The federal goverment has no business doing this; it should be done by the states as needed.
No, that would not be me, because I don't live in the US.
NEC then sent a bill to the E-Rate administrators, a quasi-governmental agency for tens of millions of dollars more than the actual cost of the equipment.
....
If someone robs a bank overnight (no people harmed) and takes 10 million dollars the shit would hit the fan.
But a corporation?
and to pay $20.7 million in fines and restitution.
Oh, I suppose theres no harm trying is there - if they get caught, they only pay double what they could have scammed.
You can't expect to wield supreme executive power, just because some watery tart threw a sword at you
Thank our campaign laws and legal bribery.
I am sure it was bought and paid for by lobbiest from NEC who convinced the politicans to buy this for kickbacks in return.
http://saveie6.com/
Having seen school budgets and taken coursework on school budgets and having had a hand in compiling a departmental school budget, I can state with some certainty that if a small group of influential people wants to hide something, they will hide it.
Granted, there are some amounts of money that can't be hidden, but this particular scam involved getting districts to buy too much unnecessary equiment (1 network server per classroom in one case) and overcharging for it because the districts didn't follow competitive-bidding procedures.
I guess the point I'm trying to make is that even though the budget process is "public," a lot of the particulars are obfuscated by those few who control the budget pen. There's always a fair amount of pork in any budget (schools included), but this particular scheme involved defrauding the federal government (as opposed to defrauding the citizens of a town), which is what is landing them in hot water.
What exactly is wrong with gaining karma from doing something that benefits the readers of slashdot? I'm thankful the grandparent found that link, and I'm thankful it was +5 so I could see it no matter what.
Sounds more like a slap on the wrist. E-Rate system costs run into billions. Getting measly 20 million back isn't going to bankrupt NEC, nor refund those irresponsibly misappropriated funds. As a California resident, I'm not going to see my portion of money refunded, or at least properly distributed as a result of this judgement.
Justice will never be served as long as there are powerful lobbies who buy politicians to channel their expensive and always-redundant products and services to public schools. There is incredible amount of pork flowing through the system as I type this message, and god knows when it will be brought into limelight, if ever.
I think they claimed they "needed" the equipment.
It's as if you buy a computer at a store and they tell you that you have to add a 900$ sound card [which is just a cheap 10$ CMPCI clone] to make the computer work then pocket the difference.
How is that not fraud? You were told you needed the sound card [not true] and that the sale price was 900$ [also not true]. Similarly they were told they needed equipment that wasn't required.
I mean what is the alternative? If you can't rely on the word of the service provider than you might as well learn to be a medic, car mechanic, building architect, etc, etc, etc.
Granted I agree the average school I.T. guy is just some jackass college dropout [was my experience when in high school] who should have known better. I'd be happier if they burned some IT guys and NEC sales people simultaneously.
Tom
Someday, I'll have a real sig.
NEC then sent a bill to the E-Rate administrators, a quasi-governmental agency for tens of millions of dollars more than the actual cost of the equipment.
If they over charged tens of millions of dollars and are only paying back 20 million this seems like NEC still made money on the deal.
What every happened to triple damages?
So far as NEC is concerned crime still pays!
My school in North London had a server room full of expensive optical hardware, several firewalls and servers, bought at a cost to students of around a million pounds. I once managed to get my hands on a bandwidth usage chart, and found that a Linksys router, around 100 at the time, and three 20-port switches, each around 100 could easily cope with the usage patterns.
It's telling that the IT administrators who installed the million pound system where an equivalent solution under 500 could have worked just fine, all left that year. The school is left with a completely irrelevant infrastructure that costs thousands of pounds a year to maintain and support.
All of this happens because, when a school installs a system, it's not their money that's being spent, but that of the students (or sometimes the taxpayer). Big hardware firms love to wine and dine school purchasing directors in a bid to convince them that they really need this fancy kit. It's in all of their interests to squander the money, and nothing is happening to change that.
Any time the public largesse is expanded there will be those that abuse it. There are always people that will see this public generosity as an opportunity for a free lunch
Actually.. those who were responsible should have to pay them back at least 3 times, and from their personal account.
That a company takes the damage when things go wrong is understandable, but when people have intentionally screwed things up, they should be held personally accountable.
It amazes me that it seems acceptable to politicians that individual citizens can be put out of their life savings by an organisation like the RIAA over possibly endangering their income, while big corporations can rip of the citizens and the responsible people just walk away.
I guess I missed the part of the article where NEC bought a politician. My guess would be every other reader of the story did, too, because it simply wasn't there to be read.
I did see where one person ( one as in 1, one more than zero, one less than two ) had been caught taking a bribe, and the money wasn't even from NEC, but from another company involved.
The wire fraud count appears to be NEC taking the hit for what the employee did. Of course, there are no further detailsto clarify the story, so I get to assume a lot of things (sorta like what you did in posting your reply), since the NY Times is typically trying to advance an agenda.
Dawn of the Dead
This is because taxes are too high. There's so much money flowing into the government that there's no accountability.
Look at what you paid last year for Federal, State, and local taxes. Chances are that the local taxes you paid (typically property tax) support you local community and school, and are the lowest amount of the three. State taxes (income and sales taxes) are next, and then Federal taxes.
If this was flipped on its head, where the smallest amount of tax went to the Federal government and the largest share stayed in the local community, we'd likely see lower taxes because local elected officials are more accountable to their constituents than those at the state or federal level.
A fine is a tax you pay for doing wrong and a tax is a fine you pay for doing all right.
Then I realized it was just poor people who were getting ripped off. Whew! I mean, if NEC doesn't do it, some payday loan place or another scam artist will anyway.
Okay, so there actually was a quote in the article: "Schools are being promised million-dollar systems when a system costing $10,000 would make more sense."
This is TWO orders of magnitude, and it is not printed as fact, but is merely a quotation, and even the quotation doesn't say that this exact thing ever happened.
This gets back to my rant on providing more money for education. There IS NO LACK OF FUNDS for Education in the United States, there is a TOTAL lack of of responsibility for those funds. I vote down (and will continue to do so) every school levey and politian that would increase school taxes. I think public schools are one of the most important institution we have in this country though. The issue is I have been to school recently as a 20 something I can tell you that most of their budget is waste. Why in heavens name do we need video on demand huge writing labs of computers fast one with P4s for word processing? Not to mention new uniforms for the band every year or half of the other eqipment they buy and never use. The huge mulitmedia room my HS built that I saw when I went back to visit cost close to a million dollars and according to my younger sister has been used all of about once in two years. Its all over kill, schools are run by a bunch of know nothing administrators that think technology is going to solve all their education problems. Instead of spending money on hightech schools should spend money on text books, teachers, and the building(a confortable enviorment is importand for learning). This is not to say they should not have a well outfited computer lab to teach things like computer science . I won't support any money for schools untill I see it being spent on what matters though, teachers and books. In MN Ventera cut the budget drasticly at first school admins tried all sorts of scare tactics like claiming they could only afford to run schools four days a week and would have to cut every after school program and riddiculous claims like that. What really happend though is Jessy pushed the budget through and schools had to start to be responsible with the money, I don't see as much flasy new toys but overall the schools have not suffered. They simply buy books and teachers and maintain the buildings. It works good. Now idealy we could not cut school budgets and pay teachers more, that might result in better teachers, and again as a recent grad I learned more from teachers then and multimedia presentation tought me. A good lecurer with a chalk and a blackboard is far more valuable then some hack with power point.
Repeal the 17th Amendment TODAY! Also Please Read http://www.gnu.org/philosophy/right-to-read.html
a) 1996 - Gore/Clinton tax *your* phone bill to "put internet on every school"
b) Any school can spend whatever money and get the ERATE fund to reimburse the school
The waste and subsequent abuse happened because this tax should not even have existed to begin with. If school districts had to spend their own money, based on *local* taxation , this sort of careless purchasing would not happen.
You vote for politicians who introduce taxes, you bring this upon yourself.
The next pasture is always greener
"Every new law is a new opportunity for graft."
One of Heinlein's. It seems appropriate here.
Of COURSE collecting a big pot of tax money for "wiring the schools for internet" will attract those with the political connections to tap it. And of COURSE they will set their prices and install the equipment that gives them the entirety of that pot of money. Why the surprise?
If you want it done at a decent price you don't say: "Here's X billion dollars per year. Who can wire the schools for that?". You say: "School districts: Get hooked up. We've raised your budget a bit, but meet at least Y level of service and if there's any left over you can use it for equipment, supplies, teachers, books, software, sporting goods, building repairs, or whatever else you need."
But IMHO, while the opportunity for graft is ALWAYS a factor in new laws (even if not intentionally), this one DID have an ulterior motive:
By wiring the schools to the internet, the government added weight to the "protect the children" argument for passing regulations limiting what could be posted there.
You will recall the figurehead of this push was Al Gore, during the period when the air was filled with internet-content-regulation and for-the-CHILDren trial balloons - shortly after his wife Tipper's attempt to regulate music content was slapped down. (I believe the quote that got mangled into "Al Gore claims to have invented the Internet." came from that very push.)
The internet was created BY adults FOR adults - or at least the set of people that INCLUDES adults. It was intended to be a medium for transmitting ANY information, cheaply and without restriction. It's as much an adult world as the streets of a city. It has its universities, its industries, and its billboards. But it also has its red light districts, its radical political recruiters, and its underworld.
Children who are below the maturity level to wander this world unharmed should no more be encouraged to go there unsupervised than they should be bussed to the local "adult enterprise zone" and left on their own. And attempts to turn it into a padded cell for kids are as misguided, as tyrannical, and as futile as attempts to do the same to the streets of the city.
Bantam Dominique roosters crow a four-note song. Once you've heard it as "Happy BIRTHday" you can't NOT hear it that way
If an individual pleaded guilty to a *felony* stealing/fraud/etc then they would most likely get a significant prison sentence.
Not only that, but the individual would give up their right to vote and thus their influence over gvmt. Not so the corp.
IMHO, CEO's and executive officers ought to be responsible, *personally* for the acts of their companies - both civil and criminal. Unless the Executive can show that it would have been completely unreasonable for them to have known about the malfeasence.
Cheers,
Greg
[a particular company] would offer to get the school wired, and would offer to do the rather complex paperwork to get grants from the state (or maybe federal, I can't recall). They then would wire schools with rather pricey equipment. Not obscenely out of line equipment, but certainly more expensive than needed.
Maybe there was a "gentleman's agreement" that equipment would be jacked up a bit if the supplier did such paperwork for them. Dealing with gvmt paperwork can be costly itself. It may not be the "proper" way to do it, but it can get both sides what they want in some cases. In other words, a school may have no budget to perform such paperwork, but have a computer budget. Thus, the school can shift the paperwork costs, which they have no budget for, into the computer budget, which may be more plump in comparison. It is simply Radar O'reilly-like (MASH) wheeling and dealing and clever barter to get what you need. (I don't know if the NEC case is this way though.)
Table-ized A.I.