U.S. decides not to pursue suit against Sprint

September 22, 1990|By Leslie Cauley

The Justice Department has decided not to pursue a lawsuit against US Sprint by a former employee and a former consultant that accuses the nation's No. 3 long-distance company of trying to steal from two of its competitors confidential bid information for a $25 billion phone contract.

That does not mean, however, that the allegations that have dogged Sprint for months will be laid to rest.

According to sources familiar with the case, a prominent law firm in Philadelphia is considering stepping in where the Justice Department left off by acting as private counsel for the whistle-blowers. The Sprint whistle-blowers are represented by a law firm in Washington.

The Philadelphia law firm Berger & Montague, has earned a name for itself by taking on class-action suits against major corporations, typically on a contingency basis. Dave Berger, a partner in the firm, is a noted trial attorney.

A spokesman for Berger & Montague could not be reached for comment yesterday.

The FBI began probing allegations in late 1989 that Sprint had engaged in corporate espionage to help it win a piece of the government's FTS 2000 communications contract.

The FTS 2000 was later split, 60 percent to American Telephone & Telegraph Co. and 40 percent to Sprint, making Sprint's share of the contract worth about $10 billion. The only other bidder for the massive contract was Bethesda-based Martin Marietta Corp.

At the time of the award, Sprint was having financial difficulties and was perceived to be the underdog in the three-way bidding war.

The FBI began its probe in response to charges by a former Sprint employee and a former consultant, both of whom had worked for the Kansas City, Mo.-based company on the FTS 2000 project. The plaintiffs accused Sprint of obtaining and using confidential information to help prepare its winning bid.

Reading from a prepared statement, a Sprint spokesman in Washington said yesterday that Sprint "acted lawfully and properly" in winning the FTS 2000 contract andvowed to take whatever measures are necessary to put the matter

"Our internal investigation found no wrongdoing, and the government has apparently reached the same conclusion," the statement said.

The complaint, which remains under seal at the Justice Department, was filed under a federal statute popularly known as the whistle-blowers' law. Suits filed under the law allow private citizens to expose fraud against the governmentand collect a percentage of the reward.

In the Sprint case, the reward could reach into the millions, a government source said.

Under the federal law, neither the plaintiffs nor their attorneys are allowed to talk about such a suit.

Government sources say the main reason the government declined to pursue the case was that corroboration of the basic allegations could be not obtained.

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