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By Catholic Online (NEWS CONSORTIUM)

10/12/2012 (2 years ago)

Catholic Online (www.catholic.org)

Mexican telephone mogul Carlos Slim has made many millions for cheap phones for the poor

The wealthiest man on Earth, Mexican telecom mogul Carlos Slim owes a big chink of his wealth to President Obama's government program that supplies so-called "Obamaphones" to the poor. Slim, with an estimated net worth of $70 billion, owns a controlling stake in TracFone, which in turn makes $10 per phone for each device it provides to poor Americans.

A viral video posted on YouTube in which a Cleveland, Ohio, woman praised the president, saying he needed to be re-elected because he gives out free phones has brought the issue to light.

A viral video posted on YouTube in which a Cleveland, Ohio, woman praised the president, saying he needed to be re-elected because he gives out free phones has brought the issue to light.

Highlights

By Catholic Online (NEWS CONSORTIUM)

Catholic Online (www.catholic.org)

10/12/2012 (2 years ago)

Published in Business & Economics

Keywords: Obamaphones, Carlos Slim, telecommunications, government program


LOS ANGELES, CA (Catholic Online) - The company, whose president and CEO is Frederick "F.J." Pollak makes money from extra minutes and data plans it sells to subscribers who get phones and service through the government's Lifeline program.

Beginning in the Eighties, the program has only grown larger over the past four years after being expanded from supplying landlines to the poor to providing cellular phones.

A viral video posted on YouTube in which a Cleveland, Ohio, woman praised the president, saying he needed to be re-elected because he gives out free phones has brought the issue to light.

"Everybody in Cleveland, every minority, got an Obama phone. Keep Obama as president. He gave us a phone. He gonna do more," the woman says.

Slim's Movil America owns TracFone, when coupled with Simple Mobile service are huge players in the Lifeline program through the company's "SafeLink Wireless" brand. TracFone had 3.8 million subscribers through the federal program as of late 2011.

Pollak has donated at least $156,500 to Democratic candidates and committees this cycle, including at least $50,000 to the Obama campaign.

In addition, 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 re-election effort that year.

"I'm not against a company making a profit," U.S. Rep. Tim Griffin, (R-Ark.), a very vocal critic of the program says. "If they are making money off the program, the blame goes to the federal government for creating the program.

"This program is rife with waste and abuse," Griffin said. "It's set up in a way where people can receive multiple phones for free."

Griffin says he has seen cases in which single individuals obtained dozens of the phones, and said under the lax requirements, more than 80 million Americans are eligible.

According to the FCC, "Lifeline is a government benefit program supported by the Universal Service Fund that provides a discount on phone service for qualifying low-income consumers. Lifeline helps ensure that eligible consumers have the opportunities and security that phone service brings, including being able to connect to jobs, family, and emergency services."

Griffin says it's time to end a subsidy that gives the poor a luxury item and makes the world's wealthiest man richer.

"I simply do not think that the taxpayers should be footing the bill for someone's cell service and social interaction," Griffin said. "If that's the case, what should the government pay for and not pay for? Let's just start paying for everyone's gas."

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