In a rush to clear a growing case backlog, the fraud unit at Washington's Department of Social and Health Services tossed out nearly 5,000 tips of possible welfare fraud over a few weeks in 2012.
DSHS maintains that most of the tips were "junk," despite the fact that they originated from the department's own case workers -- staff members who deal directly with applicants and are trained to detect fraudulent behavior.
The former United States attorney from the Eastern District of Washington has a hard time believing that so many tips from hands-on employees could be deemed worthless.
“These are tips given by people who are face-to-face with the applicants,” said Jim McDevitt, who was hired by Gov. Chris Gregoire in 2011 to review DSHS's anti-fraud efforts.
“That’s the slap in the face," McDevitt said of the purge. "You’re telling these people, 'Oh, you’re not qualified to send us tips because we just got the tip and we threw the case out.'”
The purge of the tips raises questions about DSHS's commitment to follow through on reforms that began two and a half years ago after KING 5 Investigators series found widespread fraud in various DSHS assistance programs.
The 2010-2011 KING 5 series -- “Their Crime, Your Dime” -- found numerous merchants paying food stamp recipients 50 cents on the dollar in cash for their benefits, and then redeeming them for full value from the federal government.
KING 5 also found welfare cash recipients spending their benefits in casinos and strip clubs. Numerous tips to DSHS from law enforcement officers, lawmakers and the public were ignored.
The KING investigation and a blistering report by McDevitt led to what was at the time called a thorough overhaul of DSHS’s fraud unit.
The 2012 purge of tips was revealed in DSHS documents obtained by the KING 5 Investigators via public records requests. An April 3, 2012 email that Office of Fraud and Accountability Senior Director Steve Lowe sent to his staff praising the “backlog team” that “cleared up nearly 5000 cases since 3/15.”
The email indicates that over the course of just 14 work days, the seven member backlog team poured over nearly 5,000 fraud tips -- and tossed most of them out.
“An analysis of that was done, about somewhere between 80 to 85 percent of that was junk,” Lowe told KING 5 in an interview.
The tips came from DSHS eligibility workers at offices across the state who screen applicants for state and federal assistance programs. They are also trained to spot red flags for fraud, and if they have suspicions they can send a fraud early detection – or FRED – referral to OFA for further investigation.
Lowe defended the purge, saying DSHS financial and eligibility workers were dumping cases from their workload by sending them over to his investigators.
“Well, they would just shove the work over to us. It would sit in a pool and it was junk,” said Lowe.
McDevitt, the former prosecutor hired audit DSHS's anti-fraud efforts, says a year after he issued a blistering report that backed up many of KING 5's findings, he offered to conduct a follow-up investigation for the state. He provided KING 5 with a 2012 letter from then DSHS Secretary Robin Arnold-Williams in which she responded with a glowing progress report, saying the fraud unit “reduced the backlog of eligibility investigations by 40%.”
The letter makes no mention of the thousands of cases that were disposed of months earlier.
“(She) made it sound like a lot of progress was made, 'Thank you very much but no thanks. We don’t need a follow-up ‘cause we’re doing just fine on our own,'” said McDevitt. “I wasn’t invited back to take a look.”
OFA Director Lowe said the pace of progress has been slower than he expected, but he said new computer systems and an improved FRED processing system is helping reduce the backlog, which stands today at around 2,000 cases. He also said increased numbers of cases are being referred to criminal prosecutors.
But records show OFA has also been hampered by employee turnover, two discrimination lawsuits filed by female employees and an audit of OFA's handling of food stamp cases by the State Auditor’s Office.
Lowe conceded that he hasn’t been able to live up to his original pledge turn the office around in one-and-a-half years.
“We’re gonna need three years to get this back to where we wanted to get it. We are headed the right way. Nobody’s perfect,” said Lowe.
“Three years, that’s a lot of money that’s going to leak out and that’s money that’s not going to the people who really need it,” said state Sen. Andy Hill (R-Redmond), chairman of the influential Ways and Means Committee.
Hill said his staff has launched an investigation into KING 5's findings.
“I think there’s clear evidence that there may be some problems and I’ve already started a follow-up with my office to dig in and see what’s going on,” said Hill.