Video shows workers offering 'Obamaphones' to those vowing to sell them -- for drugs

Shown here is an image, from a video released by Project Veritas, of a Philadelphia location for Stand Up Wireless. (Project Veritas)

A Republican senator renewed his criticism of a government-backed program that hands out cell phones after an undercover video showed vendors helping people obtain the phones even after saying they wanted to sell them for drugs and other items.

The video was released by conservative activist James O'Keefe and his group Project Veritas. It claimed to show undercover investigators visiting Philadelphia locations for phone vendor Stand Up Wireless and locations for one other company.

In one exchange, the investigator -- posing as someone who wants a free phone -- asks if the phone will belong to him after he gets it.

"Whatever you want to do with it," the worker says.

The investigator floats the possibility of getting "money for heroin." The employee responds: "Hey, I don't judge."

Global Connection Inc. of America, the parent company for Stand Up Wireless, has already taken disciplinary action against the employees in question.

"Any employee involved has already been terminated," CEO Dave Skogen told FoxNews.com.

But Sen. David Vitter, R-La., who has long been critical of the phone hand-out program -- which was dubbed the "Obamaphone" during the 2012 campaign -- slammed the initiative in light of the video.

"The free government cell phones issue just keeps getting more outrageous," Vitter said in a statement. "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."

Vitter has previously, and unsuccessfully, pushed legislation to strip funding for cell phones under the Lifeline program. He wants the program to focus only on landline services.

The 22-minute Project Veritas video showed undercover activists going to several locations and asking about the phones. It's unclear how many locations they ultimately visited before recording the exchanges shown in the video.

In one exchange, which apparently happened in May, a Stand Up Wireless vendor told the activist that the phone would belong to him if he got it.

The activist then asked the worker about the phone's value. The worker recommended going to "any pawn shop. They'll be more than happy to tell you."

"So I could get the phone and then sell it?" he said.

"Yeah -- I don't care what you do with it," the worker replied.

Stand Up Wireless issued a written statement late Tuesday saying the workers in the video were shown "falling short of company standards."

"In response, all team members involved have been disciplined and three have been terminated. All customer-facing team members are receiving additional training. It is not company policy, nor is it beneficial for the company in any way, for our customers to sell their phones," the statement said. "Stand Up Wireless has been and continues to be a law abiding company that operates consistently with all rules and laws in a highly regulated industry."

The Lifeline program was originally launched under the Reagan administration to help poor people have access to phones for emergencies, job searches and other vital communications. The program is funded by charges that appear on the monthly bills of every phone customer in the country.

The cost of the program, though, has tripled to $2.2 billion in 2012 from $819 million in 2008, when cell phones were added. The risk of abuse has also risen.

Only low-income people on welfare and food stamps legally qualify, but some lawmakers say the program is out of control.

Sen. Claire McCaskill, a Democrat from Missouri, was incensed when she got an offer for a free phone. She said earlier this year that the solicitation was a sign that money was "being wasted here."

The FCC has defended the program as important for helping tens of millions of low-income Americans afford basic phone options. But even they admit the program has holes. Last year the agency tightened the rules for the program and required carriers to verify existing members were eligible. The FCC also said its new rules have eliminated more than 1.1 million duplicate subscriptions and saved $214 million in 2012.