Lawmakers spar over possible fraud in phone subsidy program

Lawmakers spar over possible fraud in phone subsidy program
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Lawmakers on Tuesday sparred over the Federal Communications Commission’s Lifeline subsidy program, which pays for internet and phone service for low-income Americans.

Republican FCC Commissioner Ajit Pai has expressed concerns that households may be receiving extra or unneeded subsidies, which are against the program's rules.

Democratic Rep. Anna Eshoo, the ranking member of the House Energy and Commerce Committee’s, though ripped into Pai at the hearing, pressing him on whether he had actually found evidence of fraud.


Eshoo asked Pai at the oversight hearing if his investigation into the program had considered that some addresses include more than one household, for example homeless shelters or veterans' homes, where residents might be entitled to multiple subsidies.

“Because they exist in my congressional district, in everyone’s congressional district,” she said. “And if you’re using those multi-household addresses to allege that there’s fraud, then, you know what, you’ve got to be really careful with this.”

“I agree completely congresswoman,” Pai responded. “That’s why I said we don’t know, it’s potentially fraudulent and we need to investigate given the magnitude of that number.”

“So you don’t know, you’re just saying it might be?,” Eshoo shot back. The Democrat then repeatedly asked Pai whether he had found concrete evidence of fraud in the Lifeline program.

“No, just answer me, yes for no,” she said, eventually. “Have you uncovered any fraud so far?”

“To date, I have not reached that conclusion,” Pai replied.


Republicans have long alleged that the Lifeline program is susceptible to waste and fraud, and argue the program should not be expanded without more safeguards.

Pai’s office says that an abnormally high number of people have been signed up for the program. The program has protections to prevent households from getting extra subsidies. But phone carriers are allowed to override those safeguards if they determine someone is eligible for subsidies.

Pai said in a June letter “apparent duplicates” cost taxpayers $476 million.

The Energy and Commerce Committee’s Democrats released a report on Tuesday, just as the hearing began, arguing that Republican’s allegations of abuse and waste in the program were “based on faulty assumptions and bad data.”

The commission’s Democratic chairman, Tom Wheeler, successfully pushed to expand the Lifeline program earlier this year to cover high-speed internet service.

He took his own beating over the issue on Tuesday, with subcommittee Chairman Greg Walden following Eshoo’s comments with his own questions for Wheeler.

Walden also grilled Wheeler on the potential for fraud in the program.

“So you’re going to say there is no fraud there, yes or no?” Walden asked him.

Wheeler responded that the commission was “vigilantly working” to investigate fraud and abuse.

“Just like Commissioner Pai is,” Walden said.