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W.Va.'s $24M router buy slammed on Capitol Hill

CHARLESTON, W.Va. -- A giant-sized photograph of Kanawha County's Marmet Branch Library made its way to the U.S. Capitol on Wednesday.

During a congressional hearing, House Republican lawmakers held up the photo and railed against West Virginia's decision to use stimulus funds to put a $22,600 Internet router in the tiny library that has a single computer terminal for patrons.

The library -- open three days a week -- is housed in a trailer that costs less than the router. The high-capacity stimulus-funded routers are designed to serve hundreds of Internet connections.

"We're talking about millions and millions of dollars here that were wasted," said U.S. Rep. Greg Walden, R-Oregon, who serves as chairman of the House Subcommittee on Communications and Technology.

Earlier this month, the West Virginia Legislative Auditor's Office found that West Virginia wasted at least $7.9 million -- and up to $15 million -- on the routers. The state is installing the devices at more than 1,000 "community anchor institutions" -- schools, libraries, State Police detachments, health centers, planning agencies, county courthouses and other public facilities. The audit concluded that West Virginia could have purchased smaller, less expensive routers for hundreds of sites.

On Wednesday, Republican lawmakers sparred with the Obama administration's telecommunications chief, Lawrence Strickling, who defended West Virginia's decision to buy the oversized routers with stimulus funds.

"There's no question the routers that West Virginia chose, through the process it used, provide superior capabilities," said Strickling, who heads the National Telecommunications & Information Administration. "There's no doubt that, if those routers are installed there, they're going to have far more capacity than one would expect they need now. But what West Virginia did was [think] how do we do this in a future-proof way . . . what do we need for the next 10 years?"

Walden read Strickling portions of the Legislative Auditor's report that scolded the state for circumventing its regular bid process and buying high-capacity Cisco 3945 series routers using a contract for Internet telephone service.

"So you're happy with the outcome in West Virginia?" Walden asked Strickling. "You believe what they did . . . is a good use of taxpayer money? I expect you to go after it, if [stimulus funds] have been wasted, and West Virginia to give it back to us."

Strickling criticized the state audit, saying it calculated savings based on the Cisco routers' list price -- and didn't take into account that the state received a discount for buying 1,164 routers in bulk.

"We're confusing the capabilities of what they're getting with the cost they paid," he said.

"Have you read the West Virginia audit that clearly identifies the problems and waste here, and calls for future investigations?" Walden asked Strickling.

"Yes, I did," Strickling responded.

Walden pointed to the Marmet library photo. "So you're OK with this little single-wide trailer having a $20,000 router?"

"That's not what I said, Mr. Chairman," Strickling responded.

"I believe it is," Walden said.

Later Wednesday, Legislative Auditor Aaron Allred said Strickling mischaracterized how the state audit calculated the wasted stimulus funds.

"Mr. Strickling does not know what he is talking about when he was referring to list price of the routers," Allred said. "Cisco would have obviously discounted 1,164 smaller routers. The cost savings could have been greater than what we reported. We took a conservative approach."

Stickling noted that a U.S. Commerce Department inspector general's report found less waste.

The federal audit estimated that the state could have saved $1.2 million by purchasing Cisco 2900 series routers -- a size smaller than the routers purchased -- in 23 counties with fewer than 20,000 residents. Those counties received 231 of the 1,164 routers.

The federal auditors did not calculate cost savings on routers smaller than the 2900 series, nor in West Virginia counties with more than 20,000 people -- where more than 900 routers were assigned.

Based on the federal analysis, the state's decision to put a $22,600 router at the Marmet library was appropriate because the facility sits in Kanawha County, a county with more than 20,000 people.

"The [inspector general] didn't dig as deep as the West Virginia auditor did," Walden said.

Amid questions about the Marmet library's router, Strickling said "the community" plans to build a 5,500-square-foot library in Marmet.

"If Marmet had a new library and capacity for the future, we wouldn't be having the discussion," said U.S. Rep. Anna Eshoo, D-Calif. "It's the shed that doesn't look good."

At a meeting Tuesday, the Kanawha County Public Library board, which oversees the Marmet library, talked about closing facilities, not building new ones. After a state Supreme Court decision last week, the Kanawha library system could lose as much as 40 percent of its funding, which comes from the Kanawha County Board of Education.

Eshoo also defended Cisco on Wednesday. The state audit recommended that the West Virginia Purchasing Division investigate if Cisco sales representatives and engineers who brokered the router deal should be barred from doing business with state government in West Virginia.

"Cisco did not write up the order," Eshoo said. "They responded to a customer and sold them what they asked for."

The Gazette has previously reported that state officials purchased the Cisco routers after consulting with Cisco sales reps and engineers. Verizon sold the Cisco routers to the state.

Federal and state auditors found that West Virginia officials made the $24 million router purchase without conducting a study to determine what size routers were needed at public facilities.

Strickling told federal lawmakers that Gov. Earl Ray Tomblin is putting together a group that's working with Cisco to discuss the router deal and possible next steps.

Rep. John Shimkus, R-Ill., criticized Strickling for comments he made during a congressional hearing last May. At the time, Strickling was responding to a series of Gazette reports that raised questions about the router purchase.

"You did say, 'Don't believe everything you read in the newspaper,'" Shimkus reminded Strickling on Wednesday. "And after government review and oversight, the reality is you can believe what you read in that newspaper."

Reach Eric Eyre at ericeyre@wvgazette.com or 304-348-4869.


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