Georgia Businessman Guilty of E-Rate Bribery

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A businessman from Peachtree City, Georgia, has been found guilty of bribery-related charges in connection with the U.S. E-Rate program, intended to help schools and libraries in poor areas connect to the Internet.

R. Clay Harris, 56, was found guilty Thursday of bribery and conspiring to bribe a former Atlanta Public School official, the U.S. Department of Justice announced. He is scheduled to be sentenced in U.S District Court for the Northern District of Georgia on Oct. 22, and he faces a maximum of 45 years in prison.

Harris was CEO and majority owner of Multimedia Communications Services when he paid more than US$230,000 to M&S Consulting, a business co-owned by Arthur Scott, who was also director of Atlanta Public School's operational technology and telecommunications division, according to the DOJ. The second owner of M&S Consulting was Scott's wife, Evelyn Myers Scott.

In exchange for Multimedia's "favorable treatment" of M&S Consulting, Arthur Scott, in January 2001, submitted E-Rate funding applications for more than $22 million for Multimedia to provide equipment and services to Atlanta Public Schools, the DOJ said. The request was done without competitive bidding, the agency said.

In January 2002, Arthur Scott submitted additional E-rate funding applications requesting more than $16 million for Multimedia to provide equipment and services to Atlanta schools, again without competitive bidding. Harris' payments to Scott stopped when Multimedia was forced to submit bids in a competitive process in December 2002. Multimedia was not selected for further E-Rate work at the Atlanta schools.

Arthur Scott pleaded guilty to conspiracy and bribery charges in May 2007, and Evelyn Myers Scott pleaded guilty to a charge of conspiracy to deprive of honest services in May 2007. Both of the Scotts testified against Harris. Arthur Scott is serving a sentence of three years and one month in federal prison. Evelyn Myers Scott is serving a sentence of two years.

"Businesspeople who think they can bribe their way into contracts with school systems and government agencies face the risk of being caught and convicted," U.S. Attorney David Nahmias, of the Northern District of Georgia, said in a statement. "Our investigations into public corruption do not end with the conviction of the public officials; we seek to investigate and prosecute the business people who pay bribes and join the corrupt conspiracies. In this case, we have already convicted the recipients of Harris' bribes, and now he too will go to prison."

The E-rate program, administered by the U.S. Federal Communications Commission, was created by the U.S. Congress in 1996 to provide funding to connect needy schools to the Internet and was authorized to provide billions of dollars in funding. In recent years, several networking vendors and school officials have been investigated and charged with E-Rate fraud.

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