USDA asked to explain food stamp fraud

The chairman of the U.S. House's government oversight committee Tuesday directed U.S. Department of Agriculture officials to explain how they will prevent food-stamp merchants banned for fraud from staying in the program.

Chairman Darrell Issa, R-Calif., citing Scripps newspaper and broadcast investigations of the barred retailers published Monday, said he also will hold hearings on the alleged abuses uncovered by Scripps.

The ABC15 Investigators on Monday revealed several Valley retailers accused of cheating the food stamp system.

“We expect to give the USDA a very short leash on bringing real reform to this failed policy,” Issa said.

In a Tuesday letter to USDA Under Secretary Kevin Concannon, who heads the food stamp program, Issa asked the agency to detail what USDA does to keep the "permanently disqualified" vendors from quietly staying in the business.

"… the Scripps article found pervasive weaknesses in USDA’s process for disqualifying and reauthorizing merchants to accept benefits," Issa's letter said.

READ THE FULL LETTER

Issa, chairman of the House Committee on Oversight and Government Reform, also raised the possibility that oversight of the program might be moved to an independent agency "more dedicated to cleaning up the mess."

Using records obtained under a Freedom of Information Act and extensive data analysis, Scripps compared storeowners who had been banned with those currently permitted to accept food stamps.

By reviewing local business filings, liquor licenses, health inspection reports and state corporations filings, the reporters found evidence in dozens of cases in New York, Los Angeles, Phoenix, San Diego, Tulsa, Okla., West Palm Beach, Fla., Baltimore and other communities across the country where the store ownership hadn’t changed.

Before the Scripps reports were published, the USDA opened a criminal investigation of one suspect minimart, ejected a Baltimore convenience store from the food-stamp program, and opened administrative inquiries into several others stores -- all identified by Scripps.

USDA also announced it would tighten oversight of vendor applications by seeking more types of records, employing the method used by the Scripps reporters.

USDA's Concannon did not respond to a request for comment Tuesday. But in the past, he has noted a long-term drop in food-stamp fraud -- and the department's energetic commitment to rooting it out.

And in letters to the editors of Scripps newspapers Tuesday, Concannon defended the integrity of "the vast majority of people participating in the program," both as retailers and food-stamp recipients.

Because food stamps provide nutrition to 46 million people each month, Concannon's letter said, "The stakes are simply too high to let a few bad actors compromise this vital program."

But Issa is far from satisfied. In an interview with KGTV, San Diego, Issa called the Scripps discoveries the "tip of the iceberg."

He praised Scripps for uncovering the problem. "This makes a difference when we have watchdogs who have done their homework, and allow us to do the rest of the job for you."