WASHINGTON -- The Agriculture Department on Thursday came out with new steps to fight fraud in food stamps, a federal program that has taken center stage as Congress struggles to adopt a long-term farm policy bill.
The actions announced by Agriculture Undersecretary Kevin Concannon include giving the department new authority to penalize retailers who traffic in food stamps and requiring states to make use of federal databases, including prison and death records, to ensure that food benefits go to those who are eligible.
The Supplemental Nutrition Assistance Program (food stamps) has seen participation climb from 28 million at the start of the recession in 2008 to 46 million today. The department says food stamp fraud already is at record lows due to increased oversight, but is sensitive to any reports of abuse as Congress tries to pass a five-year farm bill this year that includes nearly $80 billion a year for food stamps.
In their year-long investigative series “Their Crime, Your Dime,” KING-TV in Seattle, WA exposed rampant welfare fraud in Washington state. Using hidden cameras and inside sources, it documented merchants in a Seattle business district scheming millions from the federal program. KING also found the problems went beyond the state's borders. Records obtained through the Freedom of Information Act revealed the federal government’s poor track record. KING charted the massive growth of the food stamp program, in comparison to the shrinking numbers of fraud investigations nationwide by federal law enforcement.
The rate of trafficking or fraud is currently about 1 percent, one of the lowest among federal programs, Concannon said. But in a program in which even a small amount of abuse can amount to millions of dollars, "We are very mindful of public confidence" that only those who qualify for benefits will receive them.
The new sanctions would allow the department to both disqualify a retailer who traffics and assess a fine proportionate to the amount of food stamp business the store does. Currently the department cannot do both, and too often the penalties "may have been viewed as a slap on the wrist," Concannon said.
States also would be required to check a national database to verify that applicants haven't been disqualified in other states and confirm from Social Security Administration records that the applicant is not in jail or deceased.
The farm bill, which sets policy on crop subsidies and conservation, has made it through Congress in the past because it has been linked to food stamps and other nutrition programs, thus uniting rural and urban lawmakers. With the current farm law set to expire at the end of September, the Senate passed a new bill in June and the House Agriculture Committee approved a similar version in July.
But House GOP leaders have declined to bring the bill to the floor for a vote, fearing that disputes over food stamps would lead to its defeat. The House bill would cut current food stamp spending by about 2 percent, or $1.6 billion a year, mainly by cracking down on policies making it easier for states to bestow benefits. But House conservatives are demanding further cuts in the program while some Democrats say they are excessive and would result in several million people being removed from food stamp rolls. The Senate-passed farm bill reduced food stamp spending by about $400 million a year.
Food stamps comprise some 80 percent of the nearly $100 billion a year in spending approved by the House and Senate bills.
The Agriculture Department says the trafficking rate has fallen from about 4 cents on the dollar in 1993 to about 1 cent in the 2006-2008 period, and that in 2010 only 3 percent of payments went to ineligible households or to eligible households in excessive amounts.
Concannon said that in the third quarter of this budget year the department fined or temporarily disqualified 574 stores for violating program rules and permanently disqualified 1,016 stores for trafficking in food stamp benefits.
The department also has sent letters to the heads of Craigslist, eBay, Facebook and Twitter to seek their help in preventing the illegal sale of food stamp benefits online and proposed rules giving states the option to contact recipients when there have been an excessive number of requests for the electronic benefit transfer cards used in food stamp transactions.
That has not satisfied critics such as Sen. Jeff Sessions, R-Ala., who says tens of billions of dollars could be saved by tightening eligibility standards and changing a system in which states are encouraged to increase their food stamp budgets. He has pointed to an agreement, made in 2004, when the Mexican Embassy and consulates in the United States cooperated in disseminating information about food stamp eligibility to Mexicans working in this country and a program that allows states to provide benefits to individuals whose assets exceed the food stamp limit if they receive some other federal welfare benefit.
In March 2011, KING found Washington state replaces nearly 30,000 food stamp cards a month, no questions asked. KING revealed that the cards were currency on the streets, with welfare recipients handing their benefit-loaded cards over in exchange for drugs. State officials brushed off warnings about the problem, including that the cards were being sold on Craigslist.