The corruption of the welfare state is on display in a new undercover video from Project Veritas, which sent undercover videographers to get some of those free “Obamaphones”… while openly telling the corporate reps distributing the phones that they intended to sell them for drug money.

The corporate representatives were not fazed by this in the slightest. One of them helpfully directed the undercover operative to a pawn shop, to find out how much cash he could get for that taxpayer-funded cell phone. “Yeah, I don’t care what you do with it,” the representative mutters. Another rep seems mildly disturbed by the sale of these phones for drug money, but describes it as a fairly common practice.

One representative acknowledges that selling the phone is illegal, but suggests pleading the Fifth if caught. (Project Veritas playfully illustrates this with a quick shot of IRS official Lois Lerner taking the Fifth to avoid congressional testimony.)

For an amusing change of pace, a female Project Veritas undercover filmmaker bursts into a profanity-laced rant about how she needs to “sell as many of these phones as possible to pay off my bills and stuff” – bills she ran up by purchasing designer handbags. “All I’m saying is, thank god for Obama, because Obama is basically paying for Louis Vuitton bag right now, if you know what I mean,” she declares. That’s laying it on a bit thick, but the phone company representatives are serenely untroubled, advising her to keep her plans to herself.

(A disclaimer, which is also duly delivered by Project Veritas at the beginning of the video: the “free” cell phone program long predates the election of Barack Obama, but the phones have become widely known as “Obamaphones,” including among beneficiaries of the program. Most Americans learned about this jaw-dropping excess of the welfare state when an Obama supporter was filmed ranting about “Obamaphones” at a Mitt Romney for President rally in 2012. The true name of the program is “Lifeline,” its cell phone benefits began under President Bush, and it adds up to a cool $2.19 billion per year, sucked out of you taxpaying chumps through a surcharge on your monthly phone bills.)

If your blood isn’t boiling yet, wait until you see how company managers, including corporate executives, handle reports of illegal conduct by their employees. The video ends with a promise that it will be sent to Dave Skogen, CEO of Global Connection Inc. of America, one of the big companies that rakes in millions from the “free” cell phone program. The UK Daily Mail picks up the story from there:

Company CEO Dave Skogen wrote to an O’Keefe associate on June 10, assuring her that ‘[s]hould an agent or employee of GCIOA not live up to our standards, including enforcing the rules of the Lifeline program, we respond quickly and in an appropriate manner.’ ‘We do not benefit from customers selling their Stand Up Wireless phones and do not encourage them to do so,’ he wrote.

But when MailOnline contacted Skogen for this story and shared a lengthy collection of direct quotations from his salespeople’s remarks, he offered little other than an assurance that ‘[w]e have been and will continue to be committed to following all applicable laws and regulations as we serve our customers.’ Pressed for a more detailed statement, Skogen complained that MailOnline ‘asked us to respond to a story on a program that does not exist (free government cell phones) and a video we have not seen.’

A “program that does not exist?” Skogen’s company has made $38 million from the Lifeline program, and he thinks it doesn’t exist?

The Daily Mail weighs the prime corporate welfare steaks that have been cut from this plump cash cow:

Both land line and mobile bills in all 50 states and the District of Columbia include a Federal Universal Service Charge, a portion of which subsidizes the program.

That makes the program a handout to both lower-income Americans and the companies that supply the phones. To many on the political right, the enterprise has been twisted beyond any semblance of its original purpose. Like industry leader TracFone, which has received more than $1.5 billion – including $440 million in 2012 alone – to provide phones to 3.9 million recipients, StandUp and Terracom behave more like corporate titans than good Samaritans.

TracFone is owned by Mexican multibillionaire Carlos Slim Helu. Stand Up Wireless’s parent company, Global Connection Inc. of America, has collected more than $38 million for its subsidized phones. The company itself is owned by Milestone Partners, a venture capital firm based in Radnor, Pennsylvania. The Oklahoma-based TerraCom Wireless has harvested a total of $168 million for its participation across 23 states. Its self-described ‘sister company,’ YourTel America, Inc., has reaped nearly another $103 million.

As you might expect from a giveaway program that tosses out small, expensive electronic items with wild abandon, Lifeline is sick with fraud. Until very recently, it ran largely on the honor system, allowing some “beneficiaries” to scurry off with eight or more “free” phones in their pockets. A review last year found that forty-one percent of the six-million-plus “subscribers” could not demonstrate their eligibility when challenged, which would work out to a billion dollars in fraud. The Daily Mail notes that two of the big Lifeline providers, TerraCom and YouTel, just agreed to a million-dollar settlement with the FCC after double-billing the government for these “free” phones. (A TerraCom spokesman said the company discovered the problem itself, and duly reported it to the FCC.) Only after this shocking abuse was exposed did Big Government decide it was time to start making Lifeline participants verify their eligibility and demonstrate that they meet the income criteria.

This program is absolutely ridiculous, which means it will go on forever, growing larger with every passing year. There was an effort to shut the cell phone giveaway down this month, but of course the Democrats killed it. That won’t stop them from telling you there isn’t an ounce of fat to be trimmed from Big Government, and threatening to fire cops and teachers the next time fiscally responsible leaders want to reduce the rate at which government spending grows.

Louisiana Sen. David Vitter and Arkansas Rep. Scott Griffin, both Republicans, would rather the mobile phone component of Lifeline actually didn’t exist. They have pushed to eliminate cell phones from the program, leaving the land line portion intact for emergencies and career-building uses. ‘The free government cell phones issue just keeps getting more outrageous,’ Vitter told MailOnline.

‘This phone program has expanded far beyond its original intent, and having Washington force people to pay for free cell phones for others is offensive enough, but the waste, fraud and abuse is beyond words.’ Vitter attempted to attach his legislation to the Farm Bill this month, but Majority Leader Harry Reid blocked a vote. For his recent efforts, Vitter has attracted attack ads in his own district from TracFone. Griffin is most concerned with what he sees as corporate welfare in the phone program. ‘It’s not fair that people who work, save and pay for their cell phones are forced to fund the Lifeline program that pads the pockets of people like Carlos Slim, the foreign billionaire who has repeatedly been named the World�??s Richest Man,’ Griffin said.

‘The tactics used by many of these companies demonstrate that their focus is on maximizing profits, not helping low-income individuals or saving taxpayers money.’



What say you, anti-corporate-welfare liberals? Can we join forces and wipe out this absurd program, restoring Lifeline to its original purpose of wiring low-income homes for minimal land-line service, to help poor Americans find jobs and summon emergency assistance? Or is there some corporate welfare you’re completely comfortable with, no matter how bankrupt the government becomes?

Update: Global Connection CEO Dave Skogen told Fox News that “any employee involved has already been terminated.” It’s not clear if he means every employee of his company who appeared in the Project Veritas video, or if his company is working on some broader initiative to clean up “free cell phone” abuses. In any event, it looks like Skogen has heard of the Lifeline program, after all.