WSJ: Millions fraudulently claimed eligibility for federal phone subsidies

posted at 12:41 pm on February 12, 2013 by Erika Johnsen

Steel yourselves, because this egregious revelation may very well shock you: A well-meaning but perhaps overly ambitious federal assistance program that offers a taxpayer-subsidized benefit and does not have rigorous eligibility requirements, was fraudulently taken advantage of by millions of people. (I’ll pause here a moment to let you recover.)

The Wall Street Journal reports that, of the $2.2 billion the federal government spent to provide low-income Americans with phones in 2012 alone, more than 40 percent of the programs recipients never actually proved that they were eligible to receive the benefit.

The Lifeline program—begun in 1984 to ensure that poor people aren’t cut off from jobs, families and emergency services—is funded by charges that appear on the monthly bills of every landline and wireless-phone customer. Payouts under the program have shot up from $819 million in 2008, as more wireless carriers have persuaded regulators to let them offer the service.

Suspecting that many of the new subscribers were ineligible, the Federal Communications Commission tightened the rules last year and required carriers to verify that existing subscribers were eligible. The agency estimated 15% of users would be weeded out, but far more were dropped.

A review of five top recipients of Lifeline support conducted by the FCC for the Journal showed that 41% of their more than six million subscribers either couldn’t demonstrate their eligibility or didn’t respond to requests for certification. …

Until last year, FCC rules didn’t require carriers to certify to the FCC that subscribers were eligible. Consumers could self-certify, and in many states documentation wasn’t required.

Anyone who meets federal poverty guidelines or qualifies for food stamps, Medicaid, or other assistance programs, but when the government finally required carriers to verify their recipients’ eligibility and who were then asked to actually provide documentation to that effect, surprise: Over 40 percent of participants either could not or did not bother to do so. …I wonder why that might be.

The Obama administration has engendered a terrible and job-deprived economy, to which one of their proffered solutions is simply expanding the welfare state even further (just check out food stamp growth, good grief); but with more federal assistance and the accompanying bureaucratic expansions and administrative costs come more fraud and government waste, all at the taxpayers’ expense.


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O RLY?

Robert_Paulson on February 12, 2013 at 12:44 PM

Claude Rains could not be reached for comment.

Del Dolemonte on February 12, 2013 at 12:45 PM

Obamaphone lady hardest hit!!

Bitter Clinger on February 12, 2013 at 12:45 PM

Well how are you supposed to order take-out without a phone? Do you want people to starve?

Meanie pants.

Lily on February 12, 2013 at 12:46 PM

Meh. hey, the more, the merrier. The more on government dependency regardless of qualification, the more the justification for increasing budgetary needs and employment of additional bureaucrats for the depts involved. M

ore people getting their fair share of redistributed tax revenues and more people employed by BigGov expanding its reach.

Win – Win.

hawkeye54 on February 12, 2013 at 12:46 PM

…..Good thing Eva Longoria is willing to pay more taxes.

http://video.foxbusiness.com/v/2160105342001/eva-longoria-is-willing-to-pay-more-in-taxes-are

Hey, Eva……..here’s the Treasury Department address for extra payments. Start filling out the check or are you a hypocrite? I mean millions more need free phones, healthcare, checks, food, housing.

Attn Dept G
Bureau of the Public Debt
P. O. Box 2188
Parkersburg, WV 26106-2188

Pony up Housewife!!!

PappyD61 on February 12, 2013 at 12:47 PM

At least link to the Obamaphone lady

Obamaphone Lady Hates Romney

sentinelrules on February 12, 2013 at 12:48 PM

The perfect accessory to go with their “Obama Money”.

kingsjester on February 12, 2013 at 12:48 PM

An Ipad would be nice. It would improve my quality of life. There’s got to be Ipads laying around that no one’s using. Think of the stimulation to the economy if Obama gave everyone a free Ipad, and free wireless broadband. It’s a nobrainer. And I do mean that.

Paul-Cincy on February 12, 2013 at 12:49 PM

Hey Warren Buffet, Bill Gates, Tim Cook, Eric Schmidt, Will Smith, Robert Downey Jr, Jay-Z, Justin Timberlake, Beyonce……

Here’s the link to pay more.

After all what’s a few million to you big shots. We gots people that needs a phone, food, housing, free college edumahcations, etc.

http://www.treasurydirect.gov/govt/resources/faq/faq_publicdebt.htm#DebtFinance

PappyD61 on February 12, 2013 at 12:50 PM

This thing has TANSTAAFL!!!! written all over it!

There Ain’t No Such Thing As A Free Lunch!!!!

pilamaye on February 12, 2013 at 12:51 PM

Claude Rains could not be reached for comment.

Del Dolemonte on February 12, 2013 at 12:45 PM

I’m shocked there are mentions of Claude Rains in this forum in connection with Obamaphone fraud.

Paul-Cincy on February 12, 2013 at 12:51 PM

…..Good thing Eva Longoria is willing to pay more taxes.

There is “willing” and there is “doing”. She is already more than free to add as much as she wants as a supplementary and voluntary tax payment.

She should consider it her patriotic duty.

hawkeye54 on February 12, 2013 at 12:53 PM

My EBT, My EBT, I just swiped my EBT

blammm on February 12, 2013 at 12:53 PM

“HE GAVE US A PHONE. HE GONNA DO MORE!”

Jeddite on February 12, 2013 at 12:53 PM

I am SHOCKED! Shocked I tell you!

Major Nuisance on February 12, 2013 at 12:56 PM

I didn’t sign up for the free phones. Waiting for the free homes and cars. That is coming, right?

fogw on February 12, 2013 at 12:59 PM

I wonder who these fraudulent abusers of the program are. Say what you want about Obamaphone woman, she sure seems like she’d be eligible for the program. I’m guessing the ineligibles are pretty much all illegal aliens.

boko fittleworth on February 12, 2013 at 12:59 PM

Cash for Callers

Dack Thrombosis on February 12, 2013 at 1:00 PM

Claude Rains could not be reached for comment.

Del Dolemonte on February 12, 2013 at 12:45 PM

I’m shocked there are mentions of Claude Rains in this forum in connection with Obamaphone fraud.

Paul-Cincy on February 12, 2013 at 12:51 PM

Claude would be saddened by what has happened to his adopted country.

Del Dolemonte on February 12, 2013 at 1:01 PM

It may come as a shock to some here at HA, but the voting public opted for four more years of this and more like it.

Can’t beat ‘em, join ‘em!

Cloward-Piven goes both ways.

Adopt a new philosophy: Enjoy the Decline!

GOP=Whigs.

Bruno Strozek on February 12, 2013 at 1:02 PM

The Obama administration has engendered a terrible and job-deprived economy, to which one of their proffered solutions is simply expanding the welfare state even further (just check out food stamp growth, good grief);

Reminds me of the WSJ article that pointed to the true origins of today’s booming food stamp program- George Bush.

Note that Obama has temporarily increased food stamp benefits, and those increases are set to expire barring another renewal. The major, long-term and permanent increases were enacted by Bush and the GOP:

“The food-stamp boom began with the George W. Bush Republicans, who expanded benefits in the appalling 2002 farm bill.”

http://online.wsj.com/article/SB10000872396390443847404577631580385950886.html

So the actual “welfare state expansion” of the food stamp program isn’t quite as you describe.

bayam on February 12, 2013 at 1:04 PM

There Ain’t No Such Thing As A Free Lunch!!!!

pilamaye on February 12, 2013 at 12:51 PM

Wrong.

http://www.benefits.gov/

Enjoy the Decline!

GOP=Whigs.

Bruno Strozek on February 12, 2013 at 1:07 PM

What a total BS program. I’ve got a cellphone — it cost $100. And I have a yearly contract with T-Mobile $100 for 1000 minutes. It’s for emergencies. Anything more than that, you pay for on your own.

rbj on February 12, 2013 at 1:08 PM

For crying out loud, cut this kind of sh*t off. Give them an application for a library card and leave it at that. It’ll do them more good.

BuckeyeSam on February 12, 2013 at 1:09 PM

Is there a similar program for Universal Broadband internet services..?

d1carter on February 12, 2013 at 1:09 PM

Until last year, FCC rules didn’t require carriers to certify to the FCC that subscribers were eligible. Consumers could self-certify, and in many states documentation wasn’t required.

Wonder if I can “self-certify” for a government business load to the tune of ONE TRILLION DOLLARS?

I hereby “self-certify” that I am developing a process using fungi that not only produce oil, but also vast amounts of electricity.

GarandFan on February 12, 2013 at 1:10 PM

Nothing to see here, move along.

D-fusit on February 12, 2013 at 1:12 PM

“HE GAVE US A PHONE. HE GONNA DO MORE!”

Lessee, free meals, free healthcare, free education, free homes, free gas, free cars, etc. ….

Yessiree, a whole lot more from Barry the Great Provider (TM)

hawkeye54 on February 12, 2013 at 1:14 PM

FOOD STAMPS…… The gateway to all things free!

I have teenagers that even already know that the threshold now to live a life of ease and FREE, all you need to do is make under 24,000 a year and it will actually net you 60,000+ of free benefits and tax incentives from the Government ( i.e. taxpayers pick up your tab )
HUD housing
Free medical
Free dentistry (ie CHIPS for braces not just cavity fillings or emergency services)
Free Lunch at school
Free or reduced rates for AP exams in High school
Free or reduced rate for bus/train lite rail passes
Free utilities
Free Prescriptions
Free Cell phones (dubbed the Obamaphone because of the massive expansion of the program under his administration and the connection/contracts extended to his campaign donations and Carlos Slim).

I still only have a pay as you go emergency phone, and a land line at my house which now the fees and taxes have exceeded the actual service for the phone line itself!

The list of All THINGS FREE is now endless! This is not what America was built on…… This is corruption and obscene. Where are our elected officials? Yucking it up on some patio or party slapping each other on the back giving high fives and laughing their way to a bank in the cayman islands.

ActinUpinTexas on February 12, 2013 at 1:15 PM

I hereby “self-certify” that I am developing a process using fungi that not only produce oil, but also vast amounts of electricity.

GarandFan on February 12, 2013 at 1:10 PM

Cool. We can use our windmills to blow the fungi all over everywhere, so that everyone has electricity and oil.

TexasDan on February 12, 2013 at 1:15 PM

If it’s a matter of being able to call 9-1-1, the justification for the Lifeline program in the first place, even inactive cell phones have to connect to 9-1-1 when dialed. That’s an FCC rule.

Sekhmet on February 12, 2013 at 1:16 PM

Keep Obama in prezadint, you know? He gave us a phone! He’ll give us more! He’ll destroy the dollar and punish the rich! Romney sux!

The Rogue Tomato on February 12, 2013 at 1:18 PM

What difference does it make?

Obama will just have to take more from his “Stash”.

/Lib

Galt2009 on February 12, 2013 at 1:21 PM

bayam on February 12, 2013 at 1:04 PM

Hilarious when Progressives get mad at Bush and Republicans for being too Progressive.

And stop pretending you find anything wrong with millions upon millions of Americans being on welfare and food stamps. Just stop the act already. This is your Utopia, your heaven on earth: “From each according to his ability, to each according to his need.”

visions on February 12, 2013 at 1:21 PM

bayam on February 12, 2013 at 1:04 PM

News flash Low information Proppressive – Everything in now on the Dear Liar’s watch.

Your use of that crutch will only make the Democratic party fall harder when their house of cards comes crashing down.

Galt2009 on February 12, 2013 at 1:27 PM

Obamaphones, Obamacare, ObamaEBT, Obamahomes, Obamafood, Obamadrink, Obamacars, Obamautilities and it’s ALL FREE!!!!!!!!!!

Pity we aren’t Obamafree.

ghostwalker1 on February 12, 2013 at 1:28 PM

bayam on February 12, 2013 at 1:04 PM

What did libtards say when Bush was President?

Happened on Obama’s Watch.

sentinelrules on February 12, 2013 at 1:28 PM

bayam on February 12, 2013 at 1:04 PM

Obama out-Bushes Bush, AGAIN!

And, the progressives/liberals/Marxists…, whatever, love them some Bush Obama.

Fallon on February 12, 2013 at 1:29 PM

Millions fraudulently claimed eligibility for federal phone subsidies

Surprise! Surprise! That was part of the plan to help Comrade O get re-elected.

Doesn’t matter now if the bureaucracy catches up with them and cancels their service. Dear Leader won’t be running for re-election. Now he looks forward to canonization, of the secular left wing kind. That, and some kind of Enabling Act.

farsighted on February 12, 2013 at 1:31 PM

My mother-in-law qualified for one of these. It was sent to her without a lot of paperwork. She died shortly after receiving it. When her daughter tried to return it, she was told it would eventually get turned off and not to worry about it.

GWB on February 12, 2013 at 1:32 PM

Cell phones, texting, tweeting, facebook, and intranetz are all god given, natural born, inalienable rights!!!

How else the Obamaphone lady gonna cash in on her fame?

When they start offering big screen TV’s with surround sound and free Starbucks, I may just change my party affiliation.

Oxymoron on February 12, 2013 at 1:33 PM

Here’s something just for bayam.

Obama ’09: Stimulus Will Lift 2 Million Out of Poverty; Today: 2.6 Million More in Poverty

sentinelrules on February 12, 2013 at 1:36 PM

What seems little known is this pair of facts, which seem relevant with this revelation.

First, the same funding stream provides technology to schools — and not just public schools. Without e-rate grants, most schools would not be able to afford basic infrastructure, connectivity, or service for their equipment. It would certainly be a severe problem in poorer districts. This funding stream comes from the taxes on your phone bills.

Second, this year USAC (the well from which this bounty flows — both funds for schools and phones for layabouts) is cracking down on audits of schools, and unless 90% of your students are on free lunch programs, you ain’t gettin’ jack.

So basically, one possible inference is that because of layabouts getting free Obamaphones, schools with 89% poverty rate among their students are losing funding that supports infrastructure they may already have.

Waste, fraud and abuse are PUTATIVELY one of USAC’s great concerns. From what I’ve seen as an educational insider, they’re the CAUSE of a lot of waste, fraud and abuse. In fact, there are myriad ways that as a grant recipient you can be more responsible than USAC, saving the government money AND improving your technology — and actually in so doing run afoul of eligibility gotchas and end up either losing funding or being forced to foist more expensive requirements on USAC.

This whole e-rate mess is a chasm of corruption even without “waste, fraud and abuse” technically entering the picture. Merely the way it works is insanely counterproductive, often.

Good program in theory. But now that layabouts with free phones can cause schools to go unfunded, the jig’s up.

rasqual on February 12, 2013 at 1:43 PM

And will anything happen to those people that signed up but can’t or won’t prove they were eligible? I’m guessing not. So what’s the incentive for people to not sign up and game the system until they get caught?

toby11 on February 12, 2013 at 1:43 PM

…unexpectedly…

Knott Buyinit on February 12, 2013 at 1:47 PM

I hereby “self-certify” that I am developing a process using fungi that not only produce oil, but also vast amounts of electricity.

GarandFan on February 12, 2013 at 1:10 PM

Cool. We can use our windmills to blow the fungi all over everywhere, so that everyone has electricity and oil.

TexasDan on February 12, 2013 at 1:15 PM

That sound like something bayam would come up with. Except for him/her/heshe/transgender/eunuch/ it would a serious plan that would solve our future energy needs.

acyl72 on February 12, 2013 at 1:51 PM

PhoneGate

First!

BobMbx on February 12, 2013 at 1:53 PM

I can’t think of any way to defend the action of millions of my peers, so I’ll hijack the thread with Bush.

bayam on February 12, 2013 at 1:04 PM

Fixed

BobMbx on February 12, 2013 at 1:55 PM

Remember this article the next time some proggie is whimpering about ‘the gap between the rich and the poor’. Those figures don’t include all the freebies that the takers get. A proper calculus of all sources of income or goods in lieu of income would show much different figures.

slickwillie2001 on February 12, 2013 at 2:03 PM

The Wall Street Journal reports that, of the $2.2 billion the federal government spent to provide low-income Americans with phones in 2012 alone, more than 40 percent of the programs recipients never actually proved that they were eligible to receive the benefit.

I know of two or three who have more than one Obamaphone.

But, be patient, this can be easily fixed. Once the Gang of Eight finish crafting the comprehensive immigration plan we can use it as a template for fixing this problem and all the other problems we have once and for all:

– First establish strong enforcement mechanisms to prevent people from crossing the Obamaphone eligibility border.
– Pick someone to decide that the enforcement works.
– Establish an OP-Verify system for everyone who uses a phone
– Amnesty all the existing fraudulent phone ownerships and have them pay fines and back bills, and, um, …
– Expand the program to allow more people to have Obamaphones because people really want to have Obamaphones and it’s good for the economy or something.
– Do this again in 10 or 15 years.

Dusty on February 12, 2013 at 2:03 PM

How do people get these. I’ve checked the requirements for both and I don’t see how they get them. Did they just outright lie on the applications? Doesn’t the state or feds check out anyone that applies?

Dr. Frank Enstine on February 12, 2013 at 2:04 PM

Did they just outright lie on the applications? Doesn’t the state or feds check out anyone that applies?

shazayammm Gomer!

“e’erbody what gots foodstamps, welfare, disability gets a phone!! keep obama in prezdent111″

same applies to immigration policy too

DanMan on February 12, 2013 at 2:23 PM

Look, if you want to get Cousin Pookie off the couch to vote for you – you have to give him some free shiznit. And drive his lazy dope addled brain to the polling booth. And promise more free shiznit.

It’s the way you win elections in 3rd world countries.

CHANGE!

CorporatePiggy on February 12, 2013 at 2:31 PM

So they don’t check Financial or Presidential qualifications in DC….

rgranger on February 12, 2013 at 2:40 PM

bayam on February 12, 2013 at 1:04 PM

Citing a link that people have to pay for to read won’t exactly help your case, mate!

F+

Del Dolemonte on February 12, 2013 at 2:47 PM

Passing a gas station near my house last Saturday, I saw a ‘trailer’ set up with a sign on it that stated “Free Government Cell Phones and Service”. There was approximately 30 people standing in line. Several were already TAKING ON A CELL PHONE. (A govt ‘watch-dog’ group reported 2 months ago that many recipients of free ‘Obama-phones’ ALREADY OWNED cell phones.) In the parking lot, parked right beside the govt trailer, were several Lincolns, 1 BMW, & 2 other 2013 cars (sticker or dealer plate still on the car).

easyt65 on February 12, 2013 at 2:56 PM

Spend spend spend…..

http://www.realclearpolitics.com/video/2013/02/12/hoyer_the_country_has_a_paying_for_problem_not_a_spending_problem.html

The legacy of the President formerly known as Bush.

Thanks George and Karl Rove…..what freaking Architects you are

Keep painting George.

PappyD61 on February 12, 2013 at 2:57 PM

O allowed this to go overboard folks .
The guy who got the contract is a big
O money guy !
‘Dats the way it works fools .

Lucano on February 12, 2013 at 2:58 PM

Take the program back to being for landlines only and put in a requirement to prove that you qualify instead of a silly “self-certification”.

Then the government can go ahead and remove that ridiculous $2.50 monthly fee that we pay to fund this program of notorious abuse.

40% of $2,200,000,000 is just shy of $900,000,000. We are talking real money here folks.

The reason they cleared the rolls wasn’t because of federal oversight or enforcement. They told the cell phone providers they would be fined $120,000 per person, per day if they were not eligible. Methinks that the cell phone providers knew full well what they were doing…

weaselyone on February 12, 2013 at 3:11 PM

It’s not surprising that many people didn’t respond to the verification requests since they didn’t apply for it in the first place.

VerbumSap on February 12, 2013 at 3:16 PM

The reason they cleared the rolls wasn’t because of federal oversight or enforcement. They told the cell phone providers they would be fined $120,000 per person, per day if they were not eligible. Methinks that the cell phone providers knew full well what they were doing…

weaselyone on February 12, 2013 at 3:11 PM

I smell a qui tam suit coming because Obama’s guys aren’t going to do anything.

blammm on February 12, 2013 at 3:56 PM

I smell a qui tam suit coming because Obama’s guys aren’t going to do anything.

blammm on February 12, 2013 at 3:56 PM

I am no lawyer, but I am guessing this is why the cell providers have now eliminated 40% of the participants. I wonder if one could file a qui tam suit if they were themself receiving an Obamaphone absent proper documentation? Sure they would lose their phone, but even at 15% they could certainly afford their own at that point.

weaselyone on February 12, 2013 at 4:04 PM

My Wife got an Obamaphone, we on the food stamps you see… I went Galt/Cloward/Piven do to the crap economy and the Gubmint burdens that have been placed on us all.
That said, Wife had to Qualify for the phone, costs 26.50 a month and Neither my Son nor Myself can qualify without becoming Felons, so please get the facts right before spewing nonsense,
LIB (let it burn)
Bob

Bobnormal on February 12, 2013 at 7:07 PM

They set the rules, the rest of us play the game. Just don’t win, or the rule setters will come after you.

MTF on May 21, 2013 at 6:16 AM