U.S. Sen. David Vitter (R-La.), today met with TracFone CEO, F.J. Pollak, about the free government cell phone welfare program. Vitter said he's committed to ending the program and asked Pollak to return all money TracFone has received from the waste, fraud and abuse coming from the program.
"TracFone is upset because I'm fighting to end this program, which would also end their corporate welfare," Vitter said. "The program was created to expand access to landline service for low-income households, but unfortunately it's expanded far beyond its original intent. Now it's an out-of-control, fraud-ridden entitlement program that spoils what should be a worthwhile helping hand."
On May 7, 2013 Vitter introduced legislation to end the welfare subsidy for mobile phone service in the Lifeline Program. Vitter also introduced this legislation as an amendment to the Senate budget resolution in March. The amendment failed 46-to-53.
The Lifeline Program was created in 1984 to expand landline services for low-income households through the Universal Service Fund (USF). The program supporting mobile phones was expanded in 2008 to include wireless service providers. The program has grown from $143 million in 2008 to nearly $2 billion in 2012.
In May, TracFone ran an advertisement in the Times-Picayune attacking Vitter for his efforts to eliminate a free government cell phone program.
Vitter responded with a letter to Pollak. The letter is below.
May 20, 2013
Mr. F.J. Pollak
9700 NW 112th Avenue
Miami, FL 33178
Dear Mr. Pollak:
Thank you for the large and expensive newspaper ads which your company ran against me yesterday and last Thursday in the Times-Picayune, attacking my efforts to end the free government cell phone program.
I say "thank you" because I am confident the ads will help call attention to this out-of-control, fraud-ridden entitlement program and, ultimately, help end it.
I do have two specific comments and two specific questions.
1) As you undoubtedly know, this free government cell phone program, started in 2008 (three years after Hurricane Katrina), had nothing to do with helping cope with Katrina. By suggesting otherwise, your ads are misleading and offensive, particularly to victims of Katrina.
2) The ads are also misleading in suggesting the program has nothing to do with welfare, federal spending programs, or taxpayers. As you know, welfare eligibility criteria are used, and it is funded by every taxpayer who pays for his or her own land line and/or cell phone (pretty much every taxpayer).
The questions, to which I request specific answers:
1) How much revenue has your company enjoyed from this government program?
2) As you know, a 2011 FCC report found that the top five companies benefiting from the program, including yours, could not verify the eligibility of 41% of the participants you signed up. Will you return all money related to any such cases involving your company?
Your specific answers to these two questions, or your refusal to give them, will say a lot about you and this program.