Friday, November 18, 2011

Senate Bill 5327 and the Hop Thanh

So, the obvious rebuttal to my last posting might be something relating to there being laws about fraud or some kind of enforcement or regulation, etc.

Let me tell you a bit about SB 5327 that was passed this year in Washington State. If you want to read all about it you can go to the info on the state legislature website, but generally it limits use of Electronic Benefit Transfer (EBT) cards at places deemed to be reasonable exclusions, such as businesses specializing in adult entertainment, gambling, and the like. Sounds like the legislature is really looking out for the taxpayers, right? Well, what they don't publicize is that the state employees who suggested this to the legislature also suggested they limit use of EBT cards at ATMs, because if a person can't use their EBT card like a debit or credit card to pay for their tab at the strip club the way they can at the grocery store, but they can use the ATM at the door to get cash... well, do you see where that's going? But the legislature didn't bother with that part. So, if you're a legislator who wants to stop people from using government benefits funded by your taxpaying constituents for illegal activity, well, you just left a loophole big enough for everyone to walk right through. If, on the other hand, you're a legislator who wants to make it look like you're putting in place sound anti-fraud policies, while effectively doing very little to offend the persons committing the fraud you are supposedly fighting, then you have succeeded quite nicely.

Now, I recognize that some people reading this who identify themselves as "compassionate liberals" and classify those other kind of people who point out opportunities to commit welfare fraud as "heartless conservatives bent on the destruction of all that is good" assume that people who carry around EBT cards are in desperate need and use their benefits for essentials that aren't covered by food stamps like toothpaste. To these people, I apologize for the writers of the memos about Santa Claus, the Easter Bunny, and the Tooth Fairy; apparently, they forgot to send you this one: not all those who are referred to by politicians as "our most vulnerable citizens" are as honorably needy as you think... Sure, there are victims of abuse who need support, there are victims of the recession who need some help getting back on their feet and making ends meet, there are people with developmental disabilities, children in foster care, people with substance abuse problems, and children of parents with substance abuse problems. I believe there are a lot more people in such circumstances now than there have been at any other time, as least so far in my lifetime. But, to pretend that fraud doesn't happen, or that it doesn't happen enough to be concerned with... well that is just plain stupid.

I participated in a conference call a few weeks ago that was with regard to the new Office of Fraud and Accountability, which isn't really new, it just has a new name and a new boss. I'm guessing their purpose is fairly obvious. I am not sure how detailed I can be in releasing information that was given to us, but just to be safe I won't be too specific and just say this: they have backlogs in fraud cases numbering in the thousands, some dating back to a year ago, and the number of employees to work these cases is in the teens. In the last couple years this particular group of employees has been cut by more than 80%. According to management they are hoping to increase their abilities through utilization of better computer techniques for detecting patterns of fraud, but it still seems to me that it might be helpful to have a few more employees dedicated to this function.

Not that there haven't been some successes in limiting fraud. There was a flurry of excitement when one of my coworkers saw a story in the newspaper about federal raids that shut down businesses participating in welfare fraud. Unfortunately, as this story and follow-up stories acknowledge, the individuals trading in their food benefits for cash to buy drugs and other illegal items will probably just go somewhere else. The story said that in one year alone the two stores that were shut down cashed out $2 million in food benefits at 50 cents on the dollar.

If you're like me, your next question is, what happened to all the people who illegally traded in all those benefits? Well, generally, probably nothing. However, the fraud investigator who works at my office was exultantly telling anyone who would listen about a big break with one individual. Let us say, for example, that this client used most of their benefits in the area where they lived, but then on one occasion happened to make a purchase using their card at one of the stores that was raided. Let us also suppose that this store was hours away from their home and that their purchase was a surprisingly round number. It could be that this person would deny that they have ever used benefits illegally. They may, if pressed, admit that they have used benefits illegally in ways other than cashing them out at this particular store, but of course they have good reasons and didn't know it wasn't allowed and won't do it again. Then perhaps this person was told that the store was under surveillance, and asked what might be seen on that video? At which point, the individual's demeanor may have changed. They may have also been presented with an internet printout of a social networking site where the individual advertised sale of their benefits card. At this point, the person may or may not have agreed to sign a statement admitting their guilt in exchange for having their food benefits denied for 1 year. Wow! What a fabulous success it would be if something like that really happened. Stopping crime dead in its tracks...

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