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The McCarville Report
Archive for: January 14th, 2013

Coffee Acquires Lee Slater’s Law Practice

coffeeStaff

Secretary of State Glenn Coffee announced today that when he leaves that post at month’s end he will acquire the law practice of incoming Ethics Commission Director Lee Slater.

Coffee said, “I’m very excited about the opportunity to continue the efforts begun by Lee. He has become the expert in matters involving the intersection of politics and law. As Pro Tem of the State Senate I was his client and I witnessed first-hand his skill and expertise in these matters.”

Coffee said he will continue to represent Governor Fallin in the Sardis Lake lawsuit and as general counsel for TVC Marketing Associates, a family business he helped establish over 20 years ago.


Corporation Commission Okays Capture Of Private Information

cellsJerry Bohnen
Contributing Editor

The Corporation Commission has signed off on confidentiality agreements to protect customer data of two more companies targeted for commission review as they reap millions in providing phones to the poor, under a federal program that some Oklahoma officials suspect is rife with fraud.

The suspected fraud has resulted in an investigation into the federal Lifeline program by the Federal Communications Commission, which has ultimate responsibility for the program.
The Commissioners last week approved the agreements for ICON and TerraCom Inc. while Commissioner Bob Anthony dissented, saying in the hearing, “This concerns me. I don’t want to be a part of an investigation that captures private information.”
He called it an investigation while Brandy Wreath, the Director of the Commission’s Public Utilities Division, suggested it was not a formal investigation but rather a review of the millions being made by a handful of mostly-cell phone related companies, some that literally have operated out of the back of pickup trucks parked on street corners.
Others have set up tents at various locations and given away the cell phones to those who filled out forms and swore they were impoverished.  The federal government, using fees collected from phone customers nationwide under the Federal Universal Service Fee, reimburses the phone companies under a so-called Lifeline program run in each state.
The money collected by ICON, TerraCom and a few others are staggering—tens of millions of dollars a year for each. Last year, the Oklahoma-based TerraCom hauled in nearly $36 million, averaging $3 million a month.  ICON made $25 million in federal reimbursement money
At least three others are high priority under the Commission review. But they were not identified by a Commission official with the Public Utilities Division during the hearing.  However it’s believed True Wireless is targeted after it raked in nearly $46 million in 2012 as payment for Oklahoma low-income customers, including $7.5 million in October.  Its lowest monthly income from was $2.8 million in January of last year.
Another company, Assist Wireless, received nearly $29 million from the federal government last year. One other company believed to be raising doubts among Corporation Commission officials is Easy Wireless after it jumped from $466,000 in May of last year to more than a million dollars a month from July through November. All sought and received agreements from the Corporation Commission to protect not only their customer lists but other ‘highly-sensitive confidential information and documents.’  The Commission also agreed in two other previous agreements with some of the other firms being reviewed, not to introduce some of the proprietary and confidential material as evidence in any commission hearings.
 To protect its own liability in the review, the Commission is also seeking information from rural telephone companies that also receive Lifeline funding from the federal government. But their yearly revenue through the Lifeline program is miniscule compared to the five firms in question. For instance, Chickasaw Telecom averages $12,000-$15,000 a month. EPIC Touch averages $22 to $60 a month. Pine Cellular receives anywhere from $132,000 to $197,000 a month.
What concerned Anthony in Thursday’s hearing was the social security numbers provided in such lists of customers and whether the Commission had adequate security to protect them. And in questioning Public Utility Division officials, he was told the “review” as they prefer to call it rather an investigation, focuses mainly on five companies and their 410,000 customers of the federally-funded Lifeline program.
But Corporation Commissioner Patrice Douglas made it clear in the hearing, “We’re not going after individuals, just the phone companies.” And a PUD official stated, “We have no plans to contact individual customers—that’s up to the federal government.”
   Still, Commissioner Anthony expressed concern as he questioned the PUD director and and his officials about amassing private information on hundreds of thousands of Oklahomans. “We’re engaged in a whole different form of regulation—reminds me of the Cash for Clunkers which was poorly designed and easily defrauded.”
   Staffers told him in the cases where full social security numbers were provided they were mistakenly given by the targeted phone companies and destroyed. The staff is accepting only the last 4 digits of the customers’ social security numbers.
   The companies are making their millions by recruiting customers who fill out the paperwork, sometimes doing so from the back of the pickup trucks or tents on street corners. Then the federal government reimburses those firms. In the case of phone service for those residents of tribal land in Oklahoma, the companies are paid $34.25 a month. That adds up when the list of customers totals into the hundreds of thousands, and the firms have very little overhead costs because they don’t have massive headquarters. They might not have headquarters at all.
One Commission source indicated the program initially took hold for landline customers then some firms quickly realized a fortune could be made by providing cellular phones. Plus, because of the way the tribal provision was included in the 1997 Federal law, it covered nearly 98% of Oklahoma and thus expanded the virtual gold mine for the companies.
Some have referred to the program as‘Obamaphones’ because of a nationally seen video last year showing a woman who said she would vote for President Obama because he gave her a free phones. But President Obama had nothing to do with the creation of the program. However, the President has given active support to it.
Police in Tulsa have long suspected the program aided drug pushers. And one such drug dealer openly admitted the program allowed him to have several cell phones for his illegal operations. In Thursday’s hearing, an attorney for the Commission’s PUD explained, “We’re not jumping to conclusions because we found in one case 30 people using the same address with only 9 social security numbers.” The same attorney stated the review already discovered some 20,000 customers have multiple phones from the same addresses.  Under Lifeline, only one such ‘free’ phone is provided per household.
   Should the commission review of the five companies and others result in any questionable findings, a show cause motion could be filed to remove the company’s eligibility for payment from the Lifeline program.
  Under the Universal Service Fund, the Lifeline assistance was intended for low income consumers.  The Lifeline help offered a $10 a month service for the subscribers. If the subscriber lived on Native American Land, another $25 a month would be offered. The program is funded by long distance and other telecommunications companies who have passed the cost on to—their customers.
Under the plan, there is a federal Lifeline operation and an Oklahoma Lifeline. But because of more restrictive regulations created by the state, the five firms under review aren’t participating in the Oklahoma Lifeline program.
”We’ll get back to you on that,” was the standard answer when state officials pressed the FCC about the matter. And it went on for months and months. Not until U.S. Senator Tom Coburn, (R) Oklahoma,  included the Lifeline program in his 2012“Wastebook” report, did the growing cries of fraud finally get the attention of the Federal Communications System. Coburn said the phone subsidy program was ‘ballooning out of control’ and claimed it had ‘morphed into a massive entitlement.’ Entitlement—a word that was part and parcel of the Presidential campaign by Mitt Romney in his unsuccessful bid to unseat President Obama.
Adding to the skepticism among some state officials is the existence of the Universal Service Administration Company, referred often as USAC.  It was designated by the FCC to manage the contributed revenues and to distribute the funds to the participating telecoms. And now, as questions are being raised about the lack of accountability and enforcement on USAC’s part (FCC), the FCC has ordered USAC to carry out the investigation.
The Lifeline payouts to the Oklahoma telecoms, as well as others nationally, can be reviewed at: http://www.usac.org/li/tools/disbursements/default.aspx.

If Government’s Going To Protect Us From EVERYTHING…

..acar


Pinnell: Two More Firsts

shannonRepublican State Chairman Matt Pinnell

Last week we posted a picture on the OKGOP Facebook page of our new Speaker of the House, TW Shannon, being sworn in to office. To date the picture has generated over 6,100 “likes,” over 200 comments, and has been shared over 350 times, all records for our page. Needless to say, people are excited about our new Speaker.

We certainly recognize that TW’s colleagues didn’t elect him because of the color of his skin (which happens to be black) or the tribe that he is a member of (which happens to be the Chickasaw Nation). Instead, they elected him because of his strong leadership skills and conservative vision that will help unite our caucus.

However, we do recognize and celebrate firsts. And TW just so happens to be the first black Speaker in state history. Furthermore, he picked a woman (Pam Peterson R-Tulsa) to serve as his Majority Floor Leader, also a first in state history.

You heard that right…the first black Speaker and first female Majority Floor Leader in our state’s history are both Republican. Forgive me if, as Chairman of the Oklahoma Republican Party, I want to brag about these firsts. I feel obligated in large part because Democrats (including the OK Democrat Party) continue to perpetuate the notion that conservatives have a “war on women” and we don’t connect with minority voters. That’s absolute baloney, and we’ve proven that it’s untrue here in Oklahoma for years.

We proved it in 2010 when we elected our first female Governor, Mary Fallin. Who was, yes, a Republican. That first and the two I’ve mentioned should be celebrated. The celebration though will be short, as we now have work to do. That being said, I’ll take two firsts like the ones we got last week any day! So congratulations again to Speaker Shannon and Majority Floor Leader Peterson. As you requested, Speaker, prayers for humility and wisdom to you both.


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