CHICAGO (CN) — Illinois claims in court that AT&T tricked the state into giving it a $144 million contract by claiming there were no qualified minority-owned subcontractors it could use for the job.
The state sued AT&T, through relator Anthony Burketh, for allegedly violating the Illinois False Claims Act to get a contract to provide CISCO brand hardware, software and services as well as equipment upgrades.
Illinois has set a minimum goal for 10 percent of all state contract work to be performed by businesses owned by a minority.
When it applied for the job in 2008, AT&T "knew and understood that a proposed contract between the state and AT&T would need to be in compliance with the state's minority owned business goals or requirement," according to the lawsuit, which was filed Tuesday in Cook County Circuit Court.
Although there were "numerous" minority-owned businesses that could have qualified as a subcontractor, such as Net Structure Assets Solutions owned by Burketh, the state says AT&T wanted to use nonparty Ray Allen Inc. instead.
According to the complaint, the telecommunications giant "knew that if it were able to convince, though falsely, the state that no legitimate minority-owned businesses were able to perform the work, the state would grant a waiver of the subcontracting goal based on that misrepresentation."
In its application the, company said no such businesses existed and asked for a waiver which, Illinois claims, was never approved, despite the contract being awarded.
"AT&T knowingly and intentionally proceeded to enter into and perform under the contract with the State of Illinois...without ever employing any qualified minority owned businesses whatsoever and with full knowledge that no waiver of that requirement had ever actually been granted," the lawsuit states.
When confronted by state officials, an employee of the company allegedly claimed the waiver had in fact been granted, and then changed her story to say that Ray Allen was a minority-owned business.
Burketh and the state, represented by Michael Leonard of Leonard Meyer LLP, are asking that AT&T return the money it was paid under the contract, as well as damages and penalties.
AT&T did not immediately return a request for comment from Courthouse News.