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Use and Abuse of Food Stamps

Yesterday we growled about a Judicial Watch blog post that discussed the White House's apparent obsession with food, going so far as "spending more than $75 million on research that will help address food security challenges in the U.S. and globally. The money will go to 21 universities throughout the country that will “find solutions to increasing food availability and decreasing the number of food insecure individuals,” according to an announcement posted by the U.S. Department of Agriculture (USDA)."

Then in last Friday's Washington Times, we read an investigative story by Luke Rosiak that notes, "(v)iolations don't deter food stamp vendors' hunger for misuse." Rosiak and the Times used a FOIA request, and "obtained a list of stores sanctioned from 2005 to March 2012 and compared it by address to the Agriculture Department’s inventory of stores currently accepting food stamps."

And what did Mr. Rosiak and the Washington Times find? The story is rather lengthy, but this seems to be the essence of the story:

"Over the seven-year span, nearly 12,000 retailers, or 1 in 21, faced disciplinary measures for allowing food stamps to be used for ineligible items; 6,400 were permanently banned for flagrantly converting large amounts to cash. But as of last month, food stamp recipients still could go to 2,300 of those same outlets and make purchases. At more than 1 in 4, the store is the same right down to the name.

"The Agriculture Department said owners, not the stores, are banned, and a store can continue to accept food stamps if the owner, after being caught, sells the establishment to someone else.

"But The Times found many suspiciously timed sales, seemingly less than arms-length or to a friend or associate, and even cases in which local business records indicated that no ownership change had taken place at all."

Mr. Rosiak also reports that violators are "almost never prosecuted" (print version), writing:

“One of the most common ways a disqualified retailer can circumvent FNS’ efforts to keep them out of the program is by enlisting a ‘straw owner,’ often a family member, acquaintance or employee, as the alleged owner,” the Agriculture Department’s inspector general testified.

"But for most, the deterrent virtually ends there: In fiscal 2011, the Food and Nutrition Service said in its new rules proposal, “civil or criminal court action was concluded on approximately 5 firms.”

"The department’s inspector general, however, said the criminal tallies were much higher."

There is a related story, too, that says, "Many states are 'gaming' entitlements' to up federal benefits." According to Rosiak:

"The ploys involve a tendency for entitlement programs to make receiving one entitlement a ticket to receive another: If a person is on food stamps, for example, he’s automatically eligible for a free cellphone. Some states and recipients have learned that by gaining a foothold via a program with lax requirements or low cost, the recipient can open the door to greater federally funded benefits from other programs.

"Seventeen states have devised shell implementations of one the Low-Income Home Energy Assistance Program to boost the amount of federally funded food stamp dollars their food stamp, or Supplemental Nutrition Assistance Program, recipients receive.

"Being on the low-income program, because it is presumably an indicator of poverty, triggers an increase in the number of dollars a food stamp recipient receives each month. So states have taken to paying token amounts in the program, such as $1 a year, so that recipients’ allotment of food stamp dollars will increase an average of $1,080 annually.

“These 17 states designed their programs to exploit the food stamp program. This is not right,” Sen. Pat Roberts, Kansas Republican, said Tuesday on the Senate floor."

As I said, the entire two-stories are quite lengthy, but well-worth reading. And kudos to Luke Rosiak for his hard work on this project.

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