‘Obama­phone’ pro­gram rife with fraud

Re­port: One-third may not be fully qual­i­fied

The Washington Times Daily - - POLITICS - BY STEPHEN DINAN

The con­tro­ver­sial “Obama­phone” pro­gram, which pays for cell­phones for the poor, is rife with fraud, ac­cord­ing to a new gov­ern­ment re­port re­leased Thurs­day that found more than a third of en­rollees may not even be qual­i­fied.

Known of­fi­cially as the Life­line Pro­gram, the phone give­away be­came a sym­bol of gov­ern­ment waste in the pre­vi­ous ad­min­is­tra­tion. Now a new re­port from the Gov­ern­ment Ac­count­abil­ity Of­fice bears out those con­cerns.

The re­port, re­quested by Sen. Claire McCaskill, Mis­souri Demo­crat, also says the pro­gram has stashed some $9 bil­lion in as­sets in pri­vate bank ac­counts rather than with the fed­eral trea­sury, fur­ther in­creas­ing risks and de­priv­ing tax­pay­ers of the full ben­e­fit of that money.

“A com­plete lack of over­sight is caus­ing this pro­gram to fail the Amer­i­can tax­payer — ev­ery­thing that could go wrong is go­ing wrong,” said Mrs. McCaskill, rank­ing Demo­crat on the Se­nate’s chief over­sight com­mit­tee and who is a for­mer state au­di­tor in Mis­souri.

“We’re cur­rently let­ting phone com­pa­nies cash a gov­ern­ment check ev­ery month with lit­tle more than the honor sys­tem to hold them ac­count­able, and that sim­ply can’t con­tinue,” she said.

The pro­gram, run by the Fed­eral Com­mu­ni­ca­tions Com­mis­sion, pre­dates Pres­i­dent Obama, but it gained at­ten­tion dur­ing his ad­min­is­tra­tion when re­cip­i­ents be­gan to as­so­ciate the free phone with other ben­e­fits he doled out to the poor.

Some 10.6 mil­lion peo­ple have an Obama­phone, but 36 per­cent of them may not qual­ify, in­ves­ti­ga­tors said af­ter sam­pling the pop­u­la­tion and find­ing a huge chunk of peo­ple couldn’t prove they were el­i­gi­ble.

More than 5,500 peo­ple were found to be en­rolled for two phones, while the pro­gram was pay­ing for nearly 6,400 phones for per­sons the gov­ern­ment has listed as hav­ing died.

In­ves­ti­ga­tors also sub­mit­ted fraud­u­lent ap­pli­ca­tions to see what would hap­pen, and 12 of the 19 phone car­ri­ers they ap­plied to ap­proved a phone.

The the­ory be­hind the pro­gram was that poor peo­ple needed a phone to ap­ply for a job or con­duct other busi­ness in the mod­ern econ­omy, so they were pro­vided with what was sup­posed to be a low-cost, lim­ited-ser­vice ben­e­fit.

Though the pro­gram is ad­min­is­tered by the fed­eral gov­ern­ment, fund­ing comes from cell­phone car­ri­ers, who pass the costs on to cus­tomers through the uni­ver­sal ser­vice fee charge that many see on their monthly bills.

Thurs­day’s re­port is just the lat­est warn­ing from the GAO, which is the gov­ern­ment’s chief watch­dog. Pre­vi­ous re­ports had warned the Obama ad­min­is­tra­tion the pro­gram was sus­cep­ti­ble to dou­ble-dip­ping, and that the FCC didn’t even have a good yard­stick to mea­sure whether the pro­gram was meet­ing its goals.

The FCC had promised to make changes, but the new re­port says those have fallen short.

GAO in­ves­ti­ga­tors ques­tioned whether the pro­gram is even needed any­more. The price of phones and ser­vice on many plans have dropped dra­mat­i­cally, mak­ing them af­ford­able for nearly ev­ery­one, the GAO says. In­ves­ti­ga­tors also found that with­out the free gov­ern­ment phone, many re­cip­i­ents would gladly pay for the ser­vices on their own any­way.

In its of­fi­cial re­sponse, the FCC called the GAO’s re­port “thought­ful” and promised to try to clean up the pro­gram. It said it’s al­ready taken steps to im­prove the sit­u­a­tion.

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