Obama Administration Sues Sprint for Overcharging for Wiretapping Expenses

Saturday, March 08, 2014
(AP graphic)

The U.S. Department of Justice is going after Sprint in federal court claiming the telecommunications company overcharged law enforcement agencies for wiretapping costs.


When the Federal Bureau of Investigation (FBI) or the Drug Enforcement Administration (DEA) needs to spy on someone, they go through phone companies like Sprint, ordering them to tap into the person’s or group’s communications. The telecoms in turn can charge the government for certain costs related to the surveillance, but only within limits.


The Obama administration says Sprint went beyond those limits, inflating its bills to the FBI, DEA and other agencies by 58%. In terms of dollars, the overcharging amounted to $21 million, and took place over three-and-a-half years.


More specifically, Sprint stands accused of billing for capital expenditures—such as equipment costs—related to surveillance requests, which is prohibited under federal law and regulations.


The company tried to get away with the extra charges by disguising them as other spying costs that are legally billable, the complaint (pdf) states.


Sprint denies the allegations, saying its billing was legal and proper.


“Under the law, the government is required to reimburse Sprint for its reasonable costs incurred when assisting law enforcement agencies with electronic surveillance,” John Taylor, a Sprint spokesman, told The Wall Street Journal. “The invoices Sprint has submitted to the government fully comply with the law. We have fully cooperated with this investigation and intend to defend this matter vigorously.”


The government’s lawsuit, which stems from a Justice Department Inspector General investigation, seeks treble damages plus civil penalties up to $11,000 per violation. Sprint’s alleged overbilling “caus[ed] a significant loss to the government’s limited resources,” said attorney Melinda Haag in San Francisco, where the suit was filed in federal court, according to Wired.


During the period that Sprint was accused of overbilling, the agency that racked up the highest total wiretapping bill was the DEA, at $21 million. The FBI was second at $10.6 million, the U.S. Marshals Service third at $3.2 million, and the Bureau of Alcohol, Tobacco, Firearms and Explosives at nearly half a million dollars. Also billed by Sprint for surveillance services were Immigration and Custom Enforcement and the U.S. Secret Service.

-Noel Brinkerhoff, Danny Biederman


To Learn More:

U.S. Sues Sprint, Alleging It Overbilled Law Enforcement for Surveillance – Update (by Andrew Grossman and Thomas Gryta, Wall Street Journal)

Justice Department Suing Sprint Over Wiretap Bills (by Jeffrey Benzing, Main Justice)

Sprint Accused of Overcharging Feds Millions for Wiretapping (by David Kravets, Wired)

United States of America v. Sprint Communications, Inc. (U.S. District Court, Northern District of California, San Francisco Division) (pdf)

Law Enforcement Demands Cell Phone Details from Telecoms more than 3,500 Times a Day (by Noel Brinkerhoff and David Wallechinsky, AllGov)

Obama Fights to Protect “Lobbyist Privacy” for Telecoms (by Noel Brinkerhoff, AllGov)


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