Cops, Courts and Fire Government

With New Investigative Powers, PA Inspector General Intends To Crack Down On Food Stamp Fraud

Supreme Court Chief Justice Thomas Saylor swearing in Bruce Beemer.
Credit: PA Internet News Service

The powers granted to Pennsylvania’s Inspector General office last year are so new, the agency’s website still states that its investigators lack the power to issue subpoenas.

Act 29 of 2017 transformed the department from a civil administrative agency to a full-scale investigative body, codifying what previously had been established by executive orders. The intent was to give the Inspector General’s agents new powers to go after welfare fraud and any malfeasance within the executive branch.

When Inspector General Bruce Beemer appeared last week before the House Appropriations Committee, several members remarked that it was, as far as they knew, the first time his office had been called to testify before their body.

What they wanted to know was: what will Beemer and his agents do with their newfound powers?

Beemer said that one big difference will be the ability to use search warrants and subpoenas as part of their investigations. He cited as an example investigations into the use of EBT cards for the federal Supplemental Nutrition Assistance Program, also known as “food stamps.” Historically, Beemer said, his office has been able to investigate and combat instances where individuals have misused EBT cards, but his agents didn’t have the tools to go after crime rings that make such misuse possible. He likened it to being able to arrest low-level illegal drug users or dealers, but being unable to attack the higher rungs of a drug operation.

SNAP fraud, Beemer said, usually occurs when someone trades an EBT card for cash, typically for some amount less than the value the card possesses. In that way, the person getting the cash is able to circumvent the spending limitations associated with EBT cards.

“Vendors across the commonwealth are creating a market where they are taking the card and the pin number and then giving the individual cash in some form,” Beemer said. “Say the card has a value of $100 or $200, they may give the individual $50 or $100 in cash [and] make a profit by doing that, because then they can turn around and use the card in some fashion even though it’s not intended for them.”

On top of the obvious issue of misuse of taxpayer money, Beemer said, an additional concern is that the practice is contributing to drug abuse in Pennsylvania.

“It’s helping to fuel issues surrounding the opioid crisis, because many people that are getting benefits, they need the cash for a reason, and one of the primary reasons we’re seeing is to obtain opioids or contraband,” he said.

So while the person selling the EBT card has long been a focus of his department, now his team has the ability to go after the other side of the transaction, too.

“I hope to be back here next year and be able to give you some specific idea of the kinds of investigations we’ve been able to run and what we’ve been able to do to try to combat some of these issues surrounding the vendors,” Beemer said. “Because they’re the ones that are, in my view, creating so much of the problem. Their greed is creating a market whereby they can make a whole host of money off the backs of people who should be using that EBT card for other reasons.”

The most recent annual report on the Inspector General’s website, from fiscal year 2016-17, states that the office saved taxpayers $76.1 million through its investigations of welfare fraud. The report states that the office returns $12 in cost savings and collections for every $1 spent on investigations.

Rep. R. Lee James, R-Seneca, asked Beemer to provide some idea of the scope of what his department was finding.

“It’s a common practice for [the Department of Human Services] to quickly refer, especially newfound, issues of potential welfare fraud,” James asked. “So … are you getting very many of these? If so, how many?”

Beemer replied that his department fielded almost 25,000 referrals for investigations in the last fiscal year, and that those primarily came from county assistance offices.

“I can tell you that in approximately 50 percent of those cases, there’s a determination made that there was some sort of fraud,” he said.

He went on to say that while referrals and investigations may fluctuate from year to year, the 50 percent rate of fraud findings holds steady.

About the author

Pennsylvania Watchdog

Pennsylvania Watchdog