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Esta página no está disponible en español. Popular Says Justice Probes Ex-Unit…Unsure About Scope Of Probe
Popular Says Justice Probes Ex-Unit By Jonathan Stempel 18 January 2005 NEW YORK, Jan 18 (Reuters) - Popular Inc., the parent of Banco Popular, said on Tuesday U.S. antitrust enforcers were examining a former unit's $5 million contract under a federal program to wire a Detroit school for Internet access. Puerto Rico's largest bank by assets disclosed the investigation by the U.S. Department of Justice's antitrust division in a press statement in which it also announced a 21 percent increase in fourth-quarter profit. Popular said it was cooperating with the Justice Department. The agency did not immediately return a call seeking comment. San Juan-based Popular said the investigation concerns participation by its former GM Group Inc. unit in the "E-Rate" program, which subsidizes Internet and other communications in schools and rural health care programs. Jorge Junquera, Popular's chief financial officer, said in an interview the probe concerns a 2001 contract for GM Group to wire the Detroit school, which he did not name. The unit earned about $200,000 from the project, he said. Junquera said Popular learned of the grand jury investigation in November. "We debated the disclosure requirement, and it was not until our lawyers felt that since we were coming out with a press release(announcing quarterly results) that it was important to include it," he said. "Whatever the outcome, it won't have an effect on the operations of the business," Junquera added. "We're trying to get this matter resolved in the next few weeks." Popular said it reorganized GM Group, which it bought in 1999, into its Evertec Inc. unit in 2004. The E-Rate program is funded by companies that offer long-distance phone service, such as AT&T Corp. (T.N) and Verizon Communications Inc. (VZ.N). It is administered by the Universal Service Administrative Co., a not-for-profit regulated by the Federal Communications Commission (FCC). The program has been the object of allegations of waste, fraud and abuse, prompting federal investigations. The FCC last year froze new commitments because E-Rate did not comply with government accounting rules, but a law signed last month by President George W. Bush eased those rules through 2005. Popular Unsure About Scope Of Probe 21 January 2005 NEW YORK, Jan 21 (Reuters) - Popular Inc., the parent of Banco Popular, on Friday said it is unaware of the scope of a U.S. federal antitrust investigation of one of its units concerning a program to wire schools for Internet access. Puerto Rico's largest bank by assets said Department of Justice officials are examining the participation of its Evertec Inc. unit, known as GM Group before a 2004 reorganization, in the "E-Rate" program, which subsidizes Internet and other communications in schools and rural health care programs. San Juan-based Popular on Tuesday mentioned the investigation in a news release announcing fiscal fourth-quarter results. In an interview with Reuters on Tuesday, Chief Financial Officer Jorge Junquera said investigators were examining a 2001 contract, valued at $5 million, for GM Group to wire a school in Detroit. Popular bought GM Group in 1999. Popular on Friday said GM Group learned in 2003 of the investigation, that the investigation is not limited to work performed at Detroit schools, and that it does not know the full scope of the investigation. Junquera on Tuesday said the outcome of the investigation would not affect Popular's operations. He said the bank was cooperating with the Justice Department and trying to resolve the matter within a few weeks. The E-Rate program is funded by companies that offer long-distance telephone service, such as AT&T Corp. (T.N) and Verizon Communications Inc. (VZ.N). It is administered by the Universal Service Administrative Co., a not-for-profit regulated by the Federal Communications Commission (FCC). The program has been the object of allegations of waste, fraud and abuse, prompting federal investigations.
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