Alleged 'Obamaphone' Fraud Kept Silent Until After Vote to Expand Program, FCC Member Says

A Federal Communications Commission member said the agency told commissioners to stay mum on a fraud case regarding so called “Obamaphones” until after a vote to renew the program, the Washington Free Beacon reported.

The FCC alleged that Total Call Mobile committed fraud in the federal Lifeline program of $10 million and that the federal agency would seek $51 million in damages and penalties, the Free Beacon reported.

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But Republican FCC member Ajit Pai said members were told not to talk about the case until after the April 1 vote to expand the Lifeline program. Pai voted with the rest of the members to unanimously approve the Notice of Liability, or NAL, but gave a partial written dissent.

“Commissioners were told that the Notice of Apparent Liability could not be released or publicly discussed until April 1, 2016, conveniently one day after the Commission was scheduled to expand the Lifeline program to broadband,” Pai wrote. “That’s not right.”

FCC spokesman Will Wiquist told the Free Beacon, “The timing of the enforcement action was in no way related to the timing of the vote on the program modernization.”

The Lifeline program subsidizes cell phone plans for low income Americans usually on food stamps or the Supplemental Nutrition Assistance Program.

The phone program began in the 1980s, but was expanded over time and became known as “Obamaphones” after a famous YouTube video from 2012.

From the Washington Free Beacon on the fraud case:

The FCC’s NAL last week accused cell phone provider Total Call Mobile, which provides Lifeline services in 19 states, of “systematic and egregious misconduct” and “widespread enrollment fraud.”

According to the commission, Total Call employees enrolled tens of thousands of duplicate Lifeline beneficiaries and pocketed the extra subsidies. The FCC caught onto the scheme when the company enrolled an undercover FCC investigator in the program without asking for any eligibility documentation.

“Since 2014, Total Call has requested and received an estimated $9.7 million dollars in improper payments from the Universal Service Fund for duplicate or ineligible consumers despite repeated and explicit warnings from its own employees, in some cases compliance specialists, that company sales agents were engaged in widespread enrollment fraud,” the FCC said in a news release.