WASHINGTON, Nov. 4, 2024 – Supreme Court Justices seemed reluctant Monday to side with Wisconsin Bell’s argument that the False Claims Act does not apply to the Universal Service Fund.
They focused on the fact that about $100 million of the fund’s money from 2003 to 2015 came directly from the Treasury in the form of delinquent debts and penalties collected by the government – Justices Sonya Sotomayor, Neil Gorsuch, Amy Coney Barrett, and Chief Justice John Roberts all posed hypotheticals in which the high court ruled against the AT&T subsidiary on those grounds.
The roughly $8 billion-per-year subsidy program is funded by fees levied on telecom providers, with the accounting work managed by a private entity set up by the Federal Communications Commission for that purpose.
That arrangement, Wisconsin Bell has argued, shields the USF from FCA claims. The law mandates triple damages and additional penalties for fraudulently seeking government cash.
The company was originally sued by Todd Heath, a telecom auditor who alleged Wisconsin Bell inflated schools’ telecom bills in a bid to secure more USF funds. The case has turned into a dispute over whether the law applies at all, with Heath and the Solicitor General arguing the government “provides” all USF funding by standing up the program, even if the money flows between private parties.
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