California squandered nearly $5 million in federal taxpayer dollars subsidizing phone and internet services for over 116,000 dead people, exposing a massive fraud crisis in the so-called “Obama Phone” program that epitomizes everything wrong with unchecked government welfare programs.
California’s $5 Million Fraud Scandal Exposed
FCC Inspector General findings released January 26, 2026 documented a staggering pattern of fraud in California’s administration of the federal Lifeline program. The investigation revealed that 94,596 deceased individuals in California received subsidized telecommunications services, accounting for 81% of all fraud cases among the three states permitted to operate independent verification systems. Federal funds totaling nearly $5 million flowed to service providers for these illegitimate enrollments, representing an unconscionable waste of taxpayer money collected through fees adding nearly one-third to Americans’ phone bills.
Privacy Law Enabled Systematic Abuse
California enacted Assembly Bill 1303 on October 6, 2025, which prohibited state agencies from sharing applicant data including Social Security numbers without a subpoena. This legislation directly undermined fraud prevention measures that had successfully blocked 1.3 million fraudulent attempts nationwide since 2017, saving taxpayers $137 million. The law created a convenient shield preventing the Universal Service Administrative Company from cross-checking California enrollees against the Social Security Administration’s Death Master File. While privacy advocates claimed the measure protected vulnerable populations, it effectively opened the floodgates to fraud that common-sense verification would have prevented.
Federal Action Restores Accountability
FCC Chairman Brendan Carr revoked California’s opt-out authority on November 20, 2025, mandating federal verification processes with a February 1, 2026 compliance deadline. This decisive action restored the integrity measures California’s leadership had deliberately dismantled. Chairman Carr minced no words criticizing Governor Gavin Newsom’s defense of the fraud-riddled system, noting the program was subsidizing deceased individuals rather than serving legitimate low-income households. The FCC scheduled a comprehensive vote on Lifeline reforms for February 18, 2026, focusing on restricting benefits to legal residents and eliminating duplicate enrollments.
BREAKING: An inspector general report says California Democrats signed off on free phones and internet for 94,000 dead recipients, making up 81% of the program’s fraud.
Everything they touch is soaked in corruption.
California needs a full-scale audit now. pic.twitter.com/C8nIDxAxa9
— aka (@akafaceUS) January 31, 2026
Congressional Response Targets Systemic Fraud
Representative Young Kim introduced legislation establishing a federal task force specifically targeting California’s welfare fraud epidemic spanning multiple programs including Lifeline and Medicare. Representative Kevin Kiley amplified concerns about the state’s systematic waste of federal dollars through public appearances and related anti-fraud bills. These congressional efforts reflect growing frustration with California’s approach to administering federal assistance programs. The state’s track record demonstrates how progressive governance prioritizes ideological commitments to privacy absolutism and unrestricted access over basic fiscal responsibility and program integrity safeguards that protect hardworking taxpayers.
Lifeline Program’s Troubled Legacy
The Lifeline program, established in the 1980s and dramatically expanded under President Obama between 2008 and 2016, has faced chronic fraud issues. The Universal Service Fund financing mechanism extracts approximately $1 billion annually from telecommunications customers through mandatory fees. Previous Government Accountability Office investigations in 2017 exposed what officials termed “rampant gaming” of the system. Federal reforms implemented after those revelations successfully prevented massive fraud nationwide, but California’s opt-out status and subsequent AB 1303 legislation created an accountability gap that fraudsters exploited systematically for years.
New bill targets CA's 'Obamaphone Fraud' after state collected millions for dead people's phone, internet service https://t.co/yJXgbvj6yM pic.twitter.com/GUhIFxC7b5
— New York Post (@nypost) February 27, 2026
Political Fallout and Reform Prospects
Governor Newsom attempted damage control by claiming deceased individuals enrolled before death, but the Inspector General’s findings directly contradict this defense, documenting thousands of applications submitted months after death. This scandal emerges as Newsom cultivates national political ambitions, providing ammunition for critics questioning California’s fitness to serve as a policy model. Chairman Carr’s reforms promise to save millions in taxpayer funds by ensuring only living, eligible legal residents receive subsidies. The February 18 vote represents an opportunity to restore sanity to a program that has become synonymous with government waste and the predictable failures of inadequately supervised welfare spending.
Sources:
Editorial: FCC Chairman Exposes California’s ‘Obama Phone’ Fraud Problem – Washington Times
FCC Revokes California’s Lifeline Verification Authority – Broadband Breakfast
FCC Finds Shocking Amount of Fraud in its Lifeline Program – Americans for Tax Reform