Program to aid the poor lining the pockets of the wealthy
A wireless company profiting from the so-called “Obama phone” giveaway program is run by a prominent Democratic donor whose wife has raised more than $1.5 million for the president since 2007.
Last week a video
of a President Barack Obama supporter in Ohio claiming to have received
a free phone from the president—“[Obama] gave us a phone!”—went viral,
prompting media outlets to investigate.
Since 1985 the Federal Communications Commission (FCC) has operated a
program called Lifeline, originally designed to provide free landline
phone service for low-income individuals. The government subsidizes telecommunications firms providing the service, and those firms also pass on costs to customers via the “Universal Service Charge” on their phone bills.
The program expanded to include cell phones in 2008. That change has rapidly increased
the cost to the federal government—$1.6 billion in 2011, up from $772
million in 2008. The number of Lifeline beneficiaries rose from 7.1 million to 12.5 million during the same period; cell phones account for roughly half of that 12.5 million.
One of the major providers of the free cell phones—3.8 million subscribers
as of late 2011—is Miami-based TracFone Wireless, a company whose
president and CEO, Frederick “F.J.” Pollak, has donated at least
$156,500 to Democratic candidates and committees this cycle, including
at least $50,000 to the Obama campaign.
Pollak’s wife, Abigail, is a campaign bundler for Obama who has raised more than $632,000 for the president this cycle,
and more than $1.5 million since 2007. She has personally contributed
more than $200,000 to Democratic candidates and committees since 2008.
The Pollaks hosted Obama at their Miami Beach home in June for a $40,000-per-plate fundraising dinner, and hosted a similar event with Michelle Obama in July 2008. The couple personally donated a combined $66,200 to Obama’s reelection effort that year.
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