O'Keefe's Cameras Reveal 'Obama Phone' Fraud

The Lifeline federal phone program, nicknamed "Obama Phone," has hit another snag after hidden cameras revealed its vulnerability to consumer fraud.

Undercover video shot in May by conservative activist James O'Keefe's Veritas Project shows two corporate distributors of the cell phones for the poor handing them out to people who suggested they would sell them for drug money, to buy shoes and handbags, or to pay off their bills.

In some cases, people handing out the phones laughed at the remarks or even advised recipients of the phone that it was acceptable to sell them.



In 2008 the program expanded, offering free cell phones to low-income people and earning them the name "Obama Phones," after a woman spoke excitedly on video how she would vote for the president because he had given her a phone.

Six million people now are said to have received free phones under the program, which cost taxpayers about $2.9 billion in 2012.

The program has since earned widespread criticism from lawmakers who consider it a glaring example of government waste. Congressional legislation was introduced this spring to remove the cell phone component of the program.

"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," GOP Sen. David Vitter of Louisiana told MailOnline. "The free government cell phones issue just keeps getting more outrageous."

Vitter attempted this month to attach legislation to defund the program to the Farm Bill, but Majority Leader Harry Reid blocked the vote, MailOnline reported.

In 2012, the FCC completed a review of the program's criteria and expenses and mandated a new set of standards after it was found that at least 41 percent of participants could not confirm their eligibility.