I have a little free advice for felons interested in working a lucrative scam with the assistance of an increasingly tight-lipped, if not increasingly tight-fisted, federal government.
Open a small convenience store and ask the Food and Nutrition Service to let you sell stuff through the gigantic $50 billion-a-year Supplemental Nutrition Assistance Program I wrote about in the most recent edition of Wisconsin Interest.

It is true that if you are a crook, you’re not supposed to be able to do this. Federal regulations state that the FNS must deny the application of any retailer with a conviction for, among other things, embezzlement, theft, forgery, receiving stolen property or obstruction – and for a good reason. Small retail stores are notorious for trafficking SNAP benefits, or what used to be known as food stamps before the advent of electronic, taxpayer-funded debit cards.

The trafficking scam is a simple one. A crooked store owner takes $100 off a shopper’s debit card and – instead of giving the shopper $100 of food – gives him or her, say, $50 in cash. The store owner then pockets the other $50 himself.
Such illegal trafficking is rare in big, publicly owned grocery stores that sell most of the food bought with SNAP benefits. But it’s still strikingly common in convenience stores and small corner groceries and gas stations that are part of the program known in Wisconsin as FoodShare. In fact, according to a 2006 report done for the FNS, over 9% of such small retailers in the national SNAP program traffic benefits. Overall, about 1% of every benefit dollar is trafficked, an amount that seems small until you realize that’s now about $500 million a year at the national level – and that FNS doesn’t really seem to much care.

A 2008 audit by the USDA’s Office of the Inspector General (OIG) pointed out that FNS doesn’t do background checks of retailers and, therefore, can’t comply with its own requirement to keep criminals out of the program.
FNS, it turns out, has no intention of changing its ways.
“FNS and OIG have since (the audit) concurred that obtaining criminal history as part of retailer authorization is neither feasible nor practical,” Alan Shannon, director of the FNS public affairs office in the Midwest Region told me in an email. “In part, FNS does not have the statutory authority to access this information.”

Confused as to why the agency couldn’t, at a minimum, run the names of store owners through online, public databases of criminal offenses such as Wisconsin’s CCAP, or why they couldn’t push for a change in the law, I filed a Freedom of Information Act (FOIA) request with the FNS for the names of the owners of the 2,900 Wisconsin retail stores that are part of the SNAP/FoodShare program. I figured I’d take a few minutes and just run a few checks myself.

FNS’s response: No. Releasing the names of store owners would be “a clearly unwarranted invasion of (their) personal privacy.”

The good news is I can appeal – along with, perhaps, a few hundred thousand others.

According to the Associated Press, denial of Freedom of Information Act requests skyrocketed in fiscal year 2009, which ended last October. While the number of FOIA requests filed with 17 major federal agencies decreased 10% between fiscal year 2008 and fiscal year 2009 (from 493,610 to 444,924), the use of exemptions that at least initially allow denial of records requests (exemptions such as the claim that “personal privacy” trumps taxpayer concern) rose almost 50% (from 312,683 to 466,872), AP reported.

In the interest of full disclosure (hey, somebody has to try it) the White House noted in response to AP that the majority of agencies have increased FOIA requests granted in part or in full. The overall trend, however, is toward more secrecy that is both illogical and costly. Not just costly to those of us who would likely have to spend untold thousands on a good First Amendment attorney to find out who owns a convenience store making money off taxpayers. Costly, too, to taxpayers themselves whose money is maybe ending up in the pockets of crooks illogically protected by a government that appears to think ownership of a business is the sort of personal information Americans find so shameful that they don’t want it spread around to their neighbors.

Let’s face it. Many of the newspapers across the country that used to have the deep pockets and the patience to fight such illogic are no longer able to consistently perform what is really a public service. The politicians and the bureaucrats know it. They also know that most of the rest of us interested in good public policy can’t spend our lives fighting expensive, never-ending battles with unknown outcomes.

It would be a lot easier to just oh-so-quietly open a convenience store and go from there.

March 25, 2010

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