FEBRUARY 03, 2014
The Obama administration’s efforts to keep secret information about its scandal-plagued food-stamp program received a major blow from a federal appellate court that’s ruled the government can’t hide how much money businesses make by accepting the welfare payments.
In the last few years Judicial Watch has reported extensively on the fraud and corruption surrounding food stamps, which are administered through the U.S. Department of Agriculture (USDA). Food stamp rolls have grown immensely under Obama and the government spends an astounding $80.4 billion a year on the program to meet the president’s goal of eradicating “food insecure households.” A recent USDA report estimates that $858 annually are lost through fraud, especially when recipients sell their benefits for cash at a discount to food retailers.
The USDA report notes that convenience stores and small grocers account for 85% of fraud cases even though they only account for 15% of all food stamp transactions. A newspaper in Sioux Falls launched an investigation and discovered that 622 South Dakota vendors—ranging from grocery stores to gas stations—are enrolled in the food stamp program, which was renamed Supplemental Nutrition Assistance Program (SNAP) to eliminate the stigma associated with welfare.
The newspaper, the Argus Leader, requested information from the USDA on annual payments for hundreds of thousands of businesses nationwide approved by the agency to accept SNAP. As is common among large federal agencies, the USDA refused to provide the files which were requested by the paper under the Freedom of Information Act (FOIA). The newspaper sued, a South Dakota federal judge sided with the USDA and the paper appealed to the 8th Circuit Court of Appeals in St. Louis.
The USDA argues that a statute creating the food stamp program requires businesses applying for participation to include income and sales tax information that can’t be released. The agency claims this also applies to money that retailers earn from SNAP sales once they are enrolled in the government program. In siding with the USDA, South Dakota federal Judge Karen Schreier ruled that the agency has the right to keep the information secret.
Reversing Schreier’s decision last week, the 8th Circuit rejected the USDA’s argument that the same federal provision protecting retailers’ application information from disclosure also applies to how much they are paid by the government once in the program. In fact, the appellate court agreed with the newspaper’s argument that data collected from businesses when they apply to accept food stamps doesn’t include taxpayer money they get once they are enrolled.
“The department, not any retailer, generates the information, and the underlying data is ‘obtained’ from third-party payment processors, not from individual retailers,” the three-judge panel wrote in its opinion. Besides, the appellate court points out in its ruling that “Congress has clearly indicated its intent to involve the public in counteracting fraud perpetrated by retailers participating in the program.”
There’s no doubt the USDA will spend more taxpayer dollars to appeal so it’s unlikely that the agency will make the information available anytime in the near future. In the meantime the agency responded to the federal appellate court spanking with an all too familiar “no comment.” In an e-mail to the Argus Leader the president of the Association of Health Care Journalists, also the health and science editor at a mainstream newspaper, calls SNAP a government black hole. “The secrecy involving food stamps is in a class by itself, exceeding that of any federal safety-net program.”
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