Top secret: What food stamps buy
by Luke Rosiak, p.washingtontimes.comJune 24th 2012
Americans spend $80 billion each year financing food stamps for the poor, but the country has no idea where or how the money is spent.
Food stamps can be spent on goods ranging from candy to steak and are accepted at retailers from gas stations that primarily sell potato chips to fried-chicken restaurants. And as the amount spent on food stamps has more than doubled in recent years, the amount of food stamps laundered into cash has increased dramatically, government statistics show.
But the government won't say which stores are doing the most business in food stamps, and even it doesn't know what kinds of food those taxpayer dollars buy.
Coinciding with lobbying by convenience stores, the U.S. Department of Agriculture, which administers the program in conjunction with states, contends that disclosing how much each store authorized to accept benefits, known as the Supplemental Nutritional Assistance Program (SNAP), receives in taxpayer funds would amount to revealing trade secrets.
As a result, fraud is hard to track and the efficacy of the massive program is impossible to evaluate.
As the House debates the once-every-five-years farm bill, the majority of which goes to food stamps, there is a renewed and fervent call from a broad spectrum of camps that the information - some of the most high-dollar, frequently requested and closely held secrets of the government - be set free.
"We can't release it based on federal rules. If it were up to us, I wouldn't have a problem releasing the information. It's taxpayer money," said Tom Steinhauser with the division of benefit programs for the Virginia Department of Social Services.
The District said it would be illegal to tell the newspaper how many food stamp dollars were flowing to each local vendor, but first offered to sell The Washington Times the information for $125,000.
"Why don't you just pay the charges? Your paper has a lot of money," said David Umansky, spokesman for the District's chief financial officer.
Told that the newspaper would not pay, the CFO's office then said that only JP Morgan, to which it contracted out operations, had access to the store totals and that the office had never looked at them. After six months of the local government attempting to extract the information from JP Morgan, the District finally said that releasing the information would be illegal.
States instructed not to tell
Maryland denied The Times' request for data under the Freedom of Information Act, saying the information belonged to the federal government, which instructed states not to release it.
Legislation seemingly designed to protect the industry goes so far as to say that anyone who releases the amount of food stamp dollars paid to a store can be jailed.
Profiting from the poor's taxpayer-funded purchases has become big business for a mix of major companies and corner bodegas, which have spent millions of dollars lobbying Congress and the USDA to keep the money flowing freely.
The National Association of Convenience Store Operators alone spends millions of dollars on lobbying yearly, including $1 million in the first quarter of this year.
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In February, 7-Eleven hired a former aide to House Speaker John A. Boehner, Ohio Republican, to lobby on "issues related to the general application and approval process for qualified establishments serving SNAP-eligible recipients."
The USDA is notoriously secretive about who receives its money, relying on weak legal reasoning, said Steve Ellis of the watchdog group Taxpayers for Common Sense.
"USDA hides behind a specious proprietary data argument: The public doesn't want to know internal business decisions or information about specific individuals' finances," he said. "The USDA sees retailers, junk food manufacturers and the big ag lobby as their customers, rather than the taxpayer."
The agency also has no idea what type of food the benefits are buying, even though the combination of universal bar codes and benefit cards makes that entirely feasible.
"It's one of those questions that frankly those of us who have been working on this issue have been struggling with a long time because we need to see the data. The industry looks at it as proprietary. The USDA doesn't track where that money goes," said Beth Johnson, a former Senate Agriculture Committee and USDA staffer who now consults for the Snack Food Association.
She noted that stores have breakdowns of products bought with food stamps but declined to share them with the USDA.
The junk food lobby appreciates the informational void.
'Anecdotal info'
Susan Smith of the National Confectioners Association, a candy trade group, dismissed assertions that food stamp recipients commonly buy candy and soda as "anecdotal info," while declining to call for the collection of statistics.
The government is "keenly interested" in what types of food the $80 billion purchases, but has not made an effort to track it.
"USDA is preparing to update a study of the feasibility of capturing detailed purchase data from over 200,000 retailers that redeem SNAP benefits, and continue to explore other options to gather information on SNAP participants' diet quality," Jimmie Turner, a spokesman for the USDA, said by email.
The demand for the information has been festering for years.
Last year, the Argus Leader, a South Dakota newspaper, sued the USDA for the information, and the USDA has fought fiercely in court filings that have stretched through this month to prevent disclosure.
This month, the public-interest group Eat Drink Politics called on the USDA to release the totals by retailer and for Congress to require the USDA to determine what types of food are purchased.
In a few cases, states have released subsets of the information, triggering the anger of the USDA.
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In two years, Wal-Mart received about half of the $1 billion in SNAP expenditures in Oklahoma, the state revealed to the Tulsa World, as Eat Drink Politics noted.
In the District and other urban areas, much more is likely spent at corner stores where junk food is more abundant and fraud is more common. If a small corner store reported high levels of food stamp sales, that could be an obvious indicator that it was accepting customers' food stamps and giving back cash, a common scheme.
Eat Drink Politics called on the House to mandate that the USDA begin tracking food types and release store totals, calling them "critical to effective evaluation."
The Senate passed a version of the farm bill Thursday that lowers food stamp spending by $4.5 billion. But no one in either chamber has proposed an amendment to require the USDA to reveal where the remaining money is going.
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