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."

Comments

Why is no one going to jail?

[MrRTFM]

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.

Re:Why is no one going to jail?

[t_allardyce]

Its like people who drive how they like - speeding, running lights, parking offences etc because they can easily affort the fine, to them the fine isnt so much a punishment/deterrent but the price of a license to do whatever they want. This is exactly the same with big corporations - infact more so. Accounting is done to take into consideration fines and lawsuits, they wernt kidding in Fight-Club when they said the motor company would only issue a recall of defective cars if the estimated cost of lawsuits was bigger than the cost of the recall! Its all just another figure to stick in the spreadsheet. Some might go a little further and factor in "public relations" ie how bad something would be to their image (in money value ofcourse). For example clubbing baby seals might create a bad image but the lost sales due to that would be less than the profit made (well whatever profit you can make from clubbing baby seals). Just remember this is the capitalist system - supply and demand, money = freedom. Continuing my rant off-topic now :\ the system (when done to the full fundamentalist extreme) works so well its almost beautiful like nature itself, consider:

Drug companies rely on illness, anti-virus companies rely on security flaws, weapons manufacturers rely on war and unrest, oil companies rely on an outdated method of fuel-energy conversion, electric companies rely on people _not_ turning off their lights when they leave the room. Even the president and government have real corporate ties that ensure they have an agenda for or against something for their own benifit. Now stop complaining about the unfairness of the system and get out there and exploit someone.. i hear afew schools might be needing network equipment, now i wonder if we can sell them that 100TB/s router?

Re:Why is no one going to jail?

[Monkelectric]

That's because in the US we have a double standard for corporations vs. individuals.

If I wrote a trojan horse that installed itself unknowingly, stole personal information, and broke your computer in the proces I would go to jail right? if Claria does it, thats "business."

If I took near nude, hightly sexualized pictures of the 17 year old girl next door the police would nail my ass? But when esquire takes near nude pics of a 17 year old Britney Spears thats "business." I know a lawyer who defended a guy the government tried to convict as a SEX OFFENDER because he took a piss on the side of a highway (and thus exposed himself, and thus is a sex offender, logically). The guy would have had to register as a sex offender for the REST OF HIS LIFE for peeing on the side of the road?

Law enforcement in this country is out of control. They let corporations/government get away with murder, and they prosecute little crimes beyond reason.

Re:That's so stupid.

[NJVil]

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.

Re:I'm not paying

[Anonymous Coward]

I am not even English
What do I do??

That would depend on which variety of non-english you are.

• If French: find someone to surrender to.
• If Quebecois: secede.
• If African: start a useless discussion in the UN general assembly condemning the US.
• If Israeli: bulldoze some housing.

There is something else wrong here

[bdsesq]

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!

Money for education

[DarkOx]

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.