FCC: 41 percent of Lifeline phone subsidies in 2012 weren't verified. Among the top five providers receiving money for telecom service to the poor in 2012, 41 percent of their customers either couldn't or didn't prove they were eligible. The lack of answers leaves a real possibility that some of the $2.2 billion spent on Lifeline in 2012 might have gone to those who didn't need it. In response, the FCC is keen to claim that its reforms may have saved $214 million last year….Let's assume a 41 percent fraud rate, though I assume it is closer to 50 percent in this program. (We can also assume 20 percent to 30 percent waste, fraud, and abuse in most federal programs, sadly. Read the old classic Government Waste A to Z for a depressing analysis.) At $2.2 billion annually, that means the Lifeline program and us, the taxpayers, are being scammed for $902 million annually.
Similar issues have been found in so many programs that the recent claim by Rep. Nancy Pelosi that we don't have a spending problem is laughably absurd. Of course we have a spending problem. From military waste (weapons even the Pentagon doesn't want) to disability fraud, there is a spending problem.
When money is "given away" to people and companies, there will be fraud. Preventing fraud costs money — enforcement is expensive for governments.
What a sad example of a government safety net benefiting large companies and individual thieves. I don't know if the law made it hard for the phone companies to verify claims of eligibility, which has sometimes been a problem with aid programs, but the companies should have raised some questions. Instead, they willingly cashed the federal checks.