Watchdog: Deceased individuals getting money from FCC’s Lifeline program

Greg Nash

A Government Accountability Office (GAO) report released Thursday details significant fraud and abuse in a Federal Communications Commission (FCC) Lifeline program, which is designed to subsidize broadband and phone services for low-income households.

The GAO report, requested four years ago by Sen. Claire McCaskill (D-Mo.), detailed numerous instances of misuse and gaps in its oversight.

For example, investigators found that $1.2 million in program subsidies went to fake or deceased individuals.

{mosads}The GAO tested 19 of the roughly 900 providers and found phone companies approved applicants for fraudulent individuals 63 percent of the time. 

The eligibility of 36 percent of subscribers — 1.2 million of the 3.5 million program participants audited — could not be verified.

The government watchdog said providers’ use of subcontractors, which did not conduct necessary background checks or interviews, contributed to the inconsistencies. 

The report found that a review mechanism to prevent abuse was vastly underperforming. A private, nonprofit corporation called the Universal Service Administrative Company audited less than one-tenth of one percent of participating carriers, the GAO said.

“A complete lack of oversight is causing this program to fail the American taxpayer — everything that could go wrong is going wrong,” McCaskill said. “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.”

The report also found that the FCC has never evaluated whether Lifeline in its 30-year history achieved its goals.

One of new FCC Chairman Ajit Pai’s (R) first moves earlier in the year was to cut nine providers from the Lifeline program, citing a desire to reduce waste.

“Last year, Chairman Pai’s investigation into the Lifeline program revealed serious weaknesses in federal safeguards,” said Neil Grace, an FCC spokesperson, when asked for comment on the report.

“Chairman Pai looks forward to working with his colleagues to crack down on the unscrupulous providers that abuse the program, because every dollar that is spent on subsidizing somebody who doesn’t need the help by definition does not go to someone who does,” Grace added.

The top Democrat in the House Energy and Commerce Committee, Rep. Frank Pallone Jr. (N.J.), called for caution regarding the study’s findings. Pallone said that reforms had been implemented at the FCC since portions of the investigation were conducted, which he claimed “reined in a billion dollars in waste, fraud and abuse.” 

“Lifeline has been a critical springboard for struggling families across the country for decades, and it would be a mistake to use this report as an excuse to rip away this essential service from struggling families and hardworking people,” Pallone said.

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