GOP senator accuses the FCC of missing ‘Obamaphone’ fraud

Sen. Jeff Sessions (R-Ala.) accused the Federal Communications Commission on Thursday of failing to prevent fraud and abuse in its cellphone subsidy program for the poor.

Sessions, the ranking Republican on the Senate Budget Committee, sent a letter to Acting FCC Chairwoman Mignon Clyburn, demanding more information about what the FCC is doing to ensure that only eligible people receive subsidies.

He pointed to a recent article in the National Review in which the writer enrolled in the problem despite being ineligible. 

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"It is important that all federal programs be effectively administered and that these programs adhere to the highest standards in order to protect the funds provided by the American people," Sessions wrote. "The news article suggests serious flaws in this program. These public concerns must be addressed."

The program, called Lifeline, has been derisively referred to as the "Obamaphone" program, although it began long before Obama took office.

Congress first enacted the Lifeline program in 1985 during the Reagan administration to provide landline phone access. In 2005, under President George W. Bush, the FCC expanded the program to cover cellphone service. To qualify, people must have an income at or below 135 percent of the poverty level or receive other federal subsidies such as food stamps. 

The program pays for phone service, not the phones themselves. But many companies that receive funding through the program offer free and low-cost phones to their subscribers. The program is funded through fees that the telephone companies pass on to all consumers on their monthly bills.

Lifeline gained more attention last year when conservatives seized on a viral video of a woman saying she would vote for President Obama because he gave her a free phone.

The FCC has aggressively defended the importance of the program, but acknowledged widespread problems with fraud and abuse.

Lifeline has grown from costing $822 million in 2008 to more than $2 billion in 2012.

In an effort to eliminate waste, the FCC last year toughened its eligibility standards and created a database to ensure that multiple companies were not receiving subsidies to provide service to the same customer. The agency claims the reforms are on track to save $400 million this year.

But in his letter, Sessions insisted that the FCC hasn't done enough to crack down on wasteful spending.