McCaskill Demands Answers on Efforts to Follow through on Almost $90 Million in Fines Proposed against Lifeline Providers

FCC announced plans to fine 12 Lifeline providers more than $94 million four years ago, almost $90 million still outstanding; 10 of 12 companies still receive Lifeline program funds

WASHINGTON - U.S. Senator Claire McCaskill, the top-ranking Democrat on the Senate Homeland Security and Governmental Affairs Committee, is demanding answers from the Federal Communications Commission (FCC) over what it’s doing to follow through on almost $90 million in fines it proposed against Lifeline carriers who profited by violating program rules, for example through collecting subsidies for duplicate or ineligible subscriber accounts. Ten of the 12 companies cited continue to receive more than $2.4 billion through the program between 2014 and 2016.

“It’s outrageous that the government continues to pay billions of taxpayer dollars to companies when it has taken no action to collect the millions in penalties it proposed against those same companies,” McCaskill said. “I’m determined to tackle the rampant waste, fraud, and abuse in this program and I look forward to hearing from the government about its plans to recover taxpayer dollars that never should’ve gone to these companies in the first place.”

Between September 2013 and February 2014, the FCC proposed more than $94 million in fines to 12 Lifeline providers for enrolling ineligible subscribers. Only one of the companies has publicly agreed to pay money back to the FCC, and 10 of the companies continue to receive Lifeline payments from the FCC. These 10 companies received more than $2.4 billion from the program between 2014 and 2016. “It is critical that you ensure that the FCC Enforcement Bureau acts swiftly and aggressively to hold companies accountable for violating Lifeline program rules,” McCaskill wrote to FCC Chairman Ajit Pai. “These rules serve to protect taxpayers and the low-income Americans who rely on Lifeline for necessary communications services, and they cannot do so without robust enforcement by the FCC.” McCaskill’s letter requested details on what the FCC is doing to collect remaining fines and why it continues to allow Lifeline providers who previously violated program rules to continue to participate in the program.

McCaskill began her oversight of the Lifeline program in 2011, when she urged the FCC to provide stronger oversight of the program, resulting in the FCC issuing new orders to crack down on waste, fraud, and abuse. Her letter today is part of her continued efforts to push for aggressive enforcement of Lifeline providers who broke rules.

Earlier this year, McCaskill joined Republican Senators Ron Johnson of Wisconsin and Rob Portman of Ohio and Democratic Senator Tom Carper of Delaware in calling for the Government Accountability Office to share information from its investigation with the FCC and the FCC Office of Inspector General so the agency and its inspector general can further investigate and pursue enforcement actions. McCaskill and Johnson also requested a forensic audit of top Lifeline provider companies in an effort to hold them accountable for any waste, fraud, or abuse of taxpayer dollars. At a hearing earlier this year, McCaskill called for answers from Pai on what he is doing to hold Lifeline companies accountable. Her questions focused on the report she requested that detailed numerous problems and vulnerabilities ranging from an inability to verify the eligibility of over one-third of selected participants, to providing Lifeline benefits to fictitious or deceased individuals, to auditing less than one-half of one percent of the telecommunication providers responsible for providing service. In 2014, McCaskill requested that the FCC refer possible criminal violators in the program to the Justice Department for criminal investigation, and subsequently the Justice Department indicted three men charged with defrauding the program of approximately $32 million.

Read McCaskill’s letter to the FCC HERE.

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