The Independent View: Watchdog Finds Fraud in FCC Program

A Government Accountability Office (GAO) Report released Thursday Details significant Fraud and Abuse in the 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.

The GAO tested 19 of the roughly 900 Providers and found Phone Companies Approved Applicants for Fraudulent Individuals 63% of the time. The Eligibility of 36% 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.

Rep. Frank Pallone Jr. (NJ), the top Democrat on the House Energy and Commerce Committee, 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.