Cisco has been under attack by auditors in West Virginia who claim that the company bamboozled the state out of millions of dollars.
The controversy stems from a $24 million contract signed in 2010 in which the state bought 1,164 high-end routers.
The story is weird and getting weirder.
For instance, it turns out that many of those routers have been sitting in boxes, unused for over two years. That's because at the time they were bought, some locations didn't have access to a high-speed fiber network. There was nothing to hook the router up to.
The auditors' major claim is that Cisco talked the state into buying big, expensive routers that cost more than $20,000 apiece when smaller, cheaper routers would have worked fine. The auditor says that the state overpaid by between $8 million and $14 million (up to one half of the contract).
The auditor wants the state to consider blacklisting Cisco from future contracts.
That would be a symbolic as well as fiscal blow to Cisco: West Virginia is CEO John Chamber's home state.
Cisco isn't the only one on the hot seat. The state employees who signed the contract are getting blame, too.
The governor's office is now investigating.
So, late last week, a group of West Virginia officials jumped to Cisco's defense with a long letter to the governor's office. They also promised that all of the routers sitting in boxes will be hooked up by June.
In response to the controversy, Cisco last week said it would refund any unused or replaced routers.
Here's a copy of the letter sent by Cisco.
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