By the Price of Business show, Media Partner of The Times USA.
Kevin Price, host of the Price of Business show, recently interviewed New York Times best selling author, Peter Schweitzer, about a new report released by the Government Accountability Institute. The Institute’s mission is to hold government agencies accountable. According to its website, the goal of the institute is to “investigate and expose crony capitalism, misuse of taxpayer monies, and other governmental corruption or malfeasance.” Schweitzer is the author of the mega best seller, Clinton Cash.
Schweitzer is an old friend of Kevin Price and the Price of Business show and it is obvious in this interesting engagement:
According to the executive summary of this important report:
The Supplemental Nutrition Assistance Program (SNAP), or federal food stamps, grew dramatically in the aftermath of the 2008 economic recession. Yet, despite a vastly improved economy and an unemployment rate of 3.9 percent as of August 2018, SNAP remains about 45 percent larger than its pre-recession size. Although participation and program costs have steadily declined since peak-year 2013, just under 39 million Americans—nearly one in eight—still receive taxpayer-funded SNAP assistance as of July this year. The program’s total cost was over $68 billion in 2017.1 That is roughly the combined annual budgets of the U.S. Department of Homeland Security (DHS), the U.S. Environmental Protection Agency (EPA), and the U.S. Department of Treasury.2 As the U.S. Department of Agriculture’s Food and Nutrition Service (FNS) scaled up the program, large amounts of fraud were inevitable. But FNS claimed annual fraud rates of just one percent, and record low “payment errors.”3 More recent data show a 1.5 percent trafficking fraud rate where SNAP benefits are exchanged for cash or non-eligible items.4 These are figures that few in program integrity areas of SNAP believe to be true.5 This report by the Government Accountability Institute (GAI) will show that FNS has hidden systemic fraud and allowed large-scale waste and abuse to go unabated for years. The report will explain the most common types of fraud by both beneficiaries and by many authorized vendors who are entrusted to redeem program benefits honestly. The report will also show that FNS mismanaged many aspects of this important program, resulting in:
- Allowing SNAP and other public assistance funds to be used in connection with acts of terrorism in the United States and abroad. Millions of dollars have been sent to terror-prone nations such as Yemen and Somalia through hawalas and money-laundering by SNAP-approved vendors who were known to be supporting terrorist organizations including “Al Qaeda in the Arabian Peninsula.” (p. 46)
- Dramatically increasing food stamp participation without providing support for necessary increases in fraud investigators, especially at the state level. Large amounts of fraud likely went unaddressed for lack of manpower. (p. 5)
- Using bureaucratic constraints to hamper state and federal enforcement efforts while masking immense amounts of fraud as “inadvertent program errors.” (p. 17)
- Permitting undocumented immigrants to obtain food stamps. FNS prohibits asking about the citizenship status of any household members other than the SNAP applicant. (p. 21)
- Allowing “food stamp millionaires” to remain in the program. (p. 25)
- Expanding the number of approved SNAP vendors by 50 percent without providing adequate oversight, and at a time when the USDA’s own investigative staff was at its lowest level since 1978. (p. 33)
- Allowing more than half of SNAP vendors to be made up of convenience stores and small- to medium-sized grocery stores, where 94 percent of all illegal SNAP trafficking occurs. (p. 35)
- Re-certifying SNAP vendors who were previously thrown out for fraud and allowing suspected sham merchants—even a “farmer’s market” with fruit displays made out of plastic—to traffic SNAP benefits for years. (p. 37)
- Issuing bogus national “error rates” that masked billions in improper payments to SNAP recipients. The practice goes back to at least 2010, with FNS declining to report any national error rate in fiscal years 2015 and 2016. (p. 42)
- SNAP meets vital needs for millions of vulnerable Americans. But fraud, waste, and abuse are rampant in the program. Every benefit dollar wasted, or improperly obtained, is a dollar diverted from those who need SNAP the most. Even though the size of SNAP has modestly declined since its 2013 pinnacle, many reforms are needed to safeguard against fraud and mismanagement of taxpayer resources. In particular, state and federal integrity-enforcement units need greater overall support, and FNS-approved SNAP vendors, especially convenience stores and small grocery stores, need greater oversight. Most trafficking occurs at these locations, and further scrutiny would reduce opportunities for food stamp recipients to illegally exchange their food benefits for cash.
Read the report in its entirety here.
