Former AT&T lawyer says company systemically overcharged neediest schools, ignored E-Rate rules

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Theodore Marcus once was an in-house lawyer for AT&T, tasked with reviewing whether the company was overcharging schools and libraries for Internet and telephone service. Marcus came to believe that AT&T did not charge low prices required by law, misled the government about its compliance with the rules of a federal program (E-Rate), and then rebuffed his concerns. A few months before he left AT&T, Marcus handed what he thought was damning information to a lawyer suing the company, with the expectation that he might share in the payout if the suit was victorious. As a result, AT&T is now accusing Marcus of “shocking” legal misconduct and is trying to persuade a federal judge to dismiss a sweeping lawsuit because of it. The future of the case will depend, in part, on whether a federal court views Marcus as a whistleblower trying to right a wrong, or a corporate lawyer violating his duty to his former employer.

If the pattern of overcharging that Marcus and others have alleged is true, the telecom co mpany deprived hundreds of school districts nationwide of millions of dollars they could have used for education expenses. Limited money in the E-Rate fund at that time could have funded service to more communities. “There’s been no consequences for a bunch of folks…who failed to do what they were supposed to do for a program that’s supposed to take care of poor children,” Marcus said. "That’s what’s driving me. These are poor Black and Brown kids and they cannot fend for themselves and you have to do what’s right. There has to be an accounting.”

‘There has to be an accounting’: Former AT&T lawyer says company systemically overcharged neediest schools