In California, Undercover Video of Abortion Clinics, Bad; But For Smog Tests, Great!

    This week, California Attorney General Xavier Becerra charged two pro-life activists from the Center for Medical Progress who recorded secret video of Planned Parenthood representatives discussing selling baby parts from abortion. The two are charged with 15 felonies for violating privacy laws (a questionable decision in and of itself, as I noted on Twitter.)
    Becerra replaced Kamala Harris as CA's attorney general when Harris was elected to the US Senate in 2016. Harris began the investigation of the CMP's secret videos, including arranging an FBI raid of one of the defendant's homes.
    Harris, however, has not always taken a dim view of undercover video. In a 2014, Harris used undercover surveillance video to nab a... smog test scofflaw (scoughlaw?).

    So undercover video to reveal abortion industry misconduct and fraud: bad! Smog test fraud? Good! Thanks, California.

'Sheriff Biden' Versus The Weed Agency

    In a 2011 blog post titled There's a New Sheriff in Town, the White House announced that Vice President Joe Biden was spearheading a new "effort to root out wasteful spending at every agency and department in the Federal Government" called the Campaign to Cut Waste. As if to emphasize the urgency of the situation, another post went up on the White House blog just fifty-six minutes later entitled TooManyWebsites.gov (a tongue-in-cheek title). Then-Director of Digital Strategy Macon Phillips singled out several websites on Sheriff Biden's most wanted list:

As the President points out in this video, our government doesn't need a website dedicated to foresters who play the fiddle. We also don’t need multiple sites dealing with invasive plants (here and here).  And I‘m pretty sure the website dedicated to the Centennial of Flight can come down... particularly since the Centennial was in 2003.

     Here's where reality runs smack into fiction, or vice versa. In 2014, National Review's Jim Geraghty released his novel The Weed Agency. His book chronicles the saga of the fictional USDA Agency of Invasive Species, a zombie-like government entity that refuses to quit. In a parallel with Geraghty's book that almost seems like a promotional stunt, the two real-life "invasive plant" websites showcased by the White House more than three years ago as examples of redundancy that we "don't need"... both still exist today (here and here, and pictured below):

    As you might imagine, Geraghty wasn't exactly caught flat-footed by this revelation.  When asked for comment, he responded:

Somehow I am less than stunned to see that bold promises about cutting waste have not been kept. Barack Obama and Joe Biden, like Bill Clinton and Al Gore before them, and Jimmy Carter before them, knew that a key part of the progressive agenda requires restoring people's faith in government, including its efficiency and effectiveness. Thus, they contend - and fool themselves into thinking -- they have some magic formula for getting large bureaucracies with many layers of middle management, widely dispersed accountability, and a culture of complacency - and turning them into cost-efficient well-oiled machines. The forces of the status quo nods, smiles and carries on as if nothing changed. The difference between the Right and the Left is that this drives us bonkers, while the Left eventually shrugs its shoulders and accepts it as part of the price of doing business, so to speak.

     The invasive plant websites were not the only ones to evade, at least initially, Biden's Campaign to Cut Waste. As Macon Phillips points out in his blog post, President Obama himself recorded a video in which he derided the notion that the federal government needed "a website dedicated to foresters who play the fiddle." Here's a screen capture of the website from the president's video:

    However, more than three years after President Obama's chiding video was recorded, the government was still paying for the "fiddlin' foresters" site. (The address to which the White House linked, "fiddllinforresters.gov", never actually existed; both "fiddllin" and "forresters" were spelled incorrectly in the url Phillips used.) As recently as May 2014, www.fiddlinforesters.us was still in place as this archived page shows:

    While visitors to the main address of the site were greeted with a message that the "site has been temporarily shut down," the whole site was actually still intact. A check on the domain registration for the site reveals an official Forest Service email address and phone number under contact information. The individual listed is none other than one of the original Fiddlin' Foresters, Jane Leche, who works as a Public Affairs Specialist for the Forest Service. So while the website was finally shut down, the domain name remains registered even today.
     The final example in the TooManyWebsites.gov blog post was the Centennial of Flight website. This government-operated website celebrating the Wright Brothers' first flight did not go down without a fight, either. More than a year after Macon Phillips said he was "pretty sure the website... can come down," a cached version shows it was still hanging on in October 2012, though its days were numbered.
    However, even in this case, that's not the end of the story. The site was rescued by a non-profit organization and centennialofflight.gov was rechristened centennialofflight.net where the original content of the site is preserved and even updated. But, in fairness, at least it's no longer on the government's dime.
    Finally, Vice President Biden singled out one more website in the New Sheriff in Town blog post, noting that "your tax dollars pay for a website dedicated to the Desert Tortoise." That website indeed was shut down, though more than a year later the site was still active as a redirect... to the new tortoise site at majovedata.gov... which was also subsequently shut down. However, in true government fashion, the desert tortoise is by no means ignored. The U.S. Fish and Wildlife Service, the Bureau of Land Management, the National Park Service, and the Environmental Protection Agency all have the desert tortoise well covered:

    Jim Geraghty has pointed out that his novel The Weed Agency debuted back in June at number eight on the Washington Post's Bestsellers list, it was categorized, ironically enough, under "Nonfiction/General". The government's real-world inability to even eliminate redundant websites certainly lends credence to the suggestion that the preternatural resilience of the Agency of Invasive Species portrayed in Geraghty's book is all too realistic.
    When launching the Campaign to Cut Waste in 2011, Vice President Joe Biden wrote, "So, folks, we’re changing the way your government does business (and spends your hard-earned tax dollars), and I think you’re going to like the results." As it turns out, the "folks" might not agree.

Note: A version of this post first appeared at The Weekly Standard.

88 Charged in One of Largest Food Stamp Frauds Ever

    The FBI announced Tuesday in Savannah, GA that eighty-eight persons have been charged in "one of the largest federal food program frauds ever prosecuted."  Fifty-four of the defendants were charged with conspiring to open "purported grocery stores" specifically for the purpose of defrauding the Women, Infant, and Children (WIC) and Food Stamp program.  After the fake stores were "approved as WIC and Food Stamp vendors," many of the fifty-four defendants went through neighborhoods soliciting WIC and Food Stamp participants to exchange government benefits for cash instead of food in clear violation of the law.  The remaining thirty-four defendants were such benefit recipients who sold over $1,000 of their own or their minor children's benefits for a fraction of their worth.  In all, over $18 million was laundered in this way in at least nine cities in Georgia.
        The list of those charged includes some colorful nicknames, like Grand Hustle, Big Bo, Da Man, Rah Rah, and even The Money Wizard.  The fifty-four defendants were charged with mail and wire fraud conspiracy and money laundering conspiracy, each of which carry a maximum of twenty years in prison plus fines of $250,000 and $500,000 respectively. The thirty-four defendants charged with selling their benefits could face five years in prison and a $250,000 fine.  The government is attempting to seize "$20 million and various bank accounts and assets, including a 2008 Land Rover and a 2008 Mercedes Benz."
    A report in August 2013 revealed that in the latest period studied, 2009-2011, Food Stamp fraud had increased from 1% to 1.3%, an increase of 30% over the previous study period of 2006-2008. However, with the explosion in Food Stamp participation beginning with the 2008 financial crisis and subsequent recession, the increase in the dollar value of fraud illustrates the jump more dramatically, from $330 million in 2006-2008 to $858 million in 2009-2011.
    It is unclear from the FBI's press release how the "purported grocery stores" managed to acquire approval from the USDA as WIC and Food Stamp vendors without, at least initially, arousing suspicion. The FBI did not reveal how the fraud was uncovered, but credited a number of federal, state and local agencies and authorities for cooperation in the investigation.


Note: A version of this article first appeared at The Weekly Standard. 

Gov't Report: Nearly Half Sampled Approved School Lunch Applications Found to Be Ineligible

    A Government Accountability Office (GAO) report published a month ago but just publicly released on Monday found that while the U.S. Department of Agriculture (USDA) has taken steps to see that ineligible beneficiaries do not receive reduced-price or free school meals, oversight still needs to be improved. An analysis of a small, "nongeneralizable" sample of twenty-five approved applications found that eleven of them were in fact ineligible.
    The sample included two categories of applications: those which automatically qualify due to "categorical eligibility (by participating in certain public-assistance programs or meeting an approved designation, such as foster children)", and those which qualify based on self-reported household size and income.
    Of the six applications that indicated categorical eligibility, half were either completely ineligible (2) or qualified for reduced-price meals instead of free. These type of applications are not even subject to standard verification. The GAO recommended that the USDA conduct sample verification such as the one conducted by the GAO to help prevent this problem.
    Of the remaining nineteen applications, the GAO found that nine were ineligible, and only two of the nine could have been verified as ineligible under standard USDA procedures. The GAO suggests that using computer matching with external income data (state payroll records) could help in weeding out participants who do not qualify despite the self-reported information that resulted in the initial approval.
    A chart included in the report illustrates the relatively small window of income variation ($1,200) from the established thresholds that subjects an application to standard verification:

    The report noted that "[t]he Office of Management and Budget (OMB) has designated the NSLP [National School Lunch Program] as 1 of 13 federal 'high-error' programs due to its large estimated improper payments—approximately $1.8 billion in fiscal year 2013," for an error rate of 15.7 percent.  The School Breakfast Program (SBP) error rate was even higher at 25.3 percent for an estimated $831 million in improper payments in fiscal 2013.
    As of this date, the USDA has not responded to the GAO regarding the recommendations made in the report.


Note: A version of this article first appeared at The Weekly Standard. 

Under Obamacare, HHS Begins Fingerprinting "High Risk" Medicare Providers and Suppliers

    Four years after Obamacare became law, the Department of Health and Human Services (HHS) is notifying Medicare providers and suppliers of new fingerprint-based background checks.  Eventually, all individuals who hold a five percent or greater stake in a Medicare supplier or provider that is categorized as "high risk" will be subject to the requirement.  The provision is part of the Medicare, Medicaid, and CHIP Program Integrity Provisions (Title E) of the Affordable Care Act, and gives the HHS secretary broad discretion in applying the background check requirements depending on the potential for abuse, fraud and/or waste.

    The new requirements are spelled out in a document posted online on the website of the Centers for Medicare and Medicaid Services (CMS) last Friday.  The new rules will apply to both current and future enrollees who are classified as "high risk," the stated purpose being to weed out "bad actors" in the Medicare program and prevent any more from enrolling.

    This particular document is a "News Flash" from CMS's Medicare Learning Network and is addressed to suppliers and providers who submit claims for "Durable Medical Equipment Medicare Administrative Contractors (DME MACs) and Home Health and Hospice (HH&H) MACs for services provided to Medicare beneficiaries."  There is no effective date or implementation date listed on the document; rather, the document states that "fingerprint-based background check implementation will be phased in beginning in 2014," and that those affected will receive letters after which the individuals will have thirty days to comply with the finger-printing requirement.  The fingerprints will be submitted to the FBI for a background check and will be stored by the government in accordance with federal requirements and FBI guidelines.

    Although initially the new regulations will only be applied to providers and suppliers of "Durable Medicare Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) suppliers or Home Health Agencies (HHA)," the "high risk" category is defined at the discretion of the HHS secretary and may be expanded in the future.


Note: A version of this post first appeared at The Weekly Standard.

IRS Not Following Law in Penalizing Excessive Refunds and Tax Credits

    The Treasury Inspector General for Tax Administration (TIGTA) reported last week that in 2011, the IRS paid out $3.6 billion in fraudulent refunds on tax returns filed by identity thieves.  Even that amount was an improvement over the previous year when the total fraud was $5.2 billion.  However, on Tuesday, TIGTA released a new report that found that though the IRS is making some progress against fraud, it is not using all available tools to prevent erroneous refunds and improper tax credits.
    In 2007, the Small Business and Work Opportunity Tax Act amended the IRS code to increase the agency's ability to penalize taxpayers who claim excessive tax credits or refunds.  A recent audit, however, found that the IRS has not properly implemented the law, and is following up in only a fraction of the cases where action may be warranted [emphasis added]:

TIGTA found that the IRS incorrectly interpreted the erroneous refund penalty law, which significantly limited the types of erroneous tax refund or credit claims to which the penalty would apply. The IRS assessed only 84 erroneous refund penalties totaling $1.9 million between May 2007 and May 2012... 

[I]n the year after the IRS revised its interpretation of the law (June 3, 2012, through May 25, 2013), there were 709,123 individual tax credits disallowed by Campus Operations for which the IRS could have potentially assessed erroneous refund penalties totaling more than $1.5 billion.

    The inspector general found no legitimate reason for the IRS's neglect of the law:

“I am troubled that even though the IRS has revised its interpretation of this law, it has still failed to establish processes to assess penalties on the majority of disallowed tax credit claims,” said J. Russell George, Treasury Inspector General for Tax Administration. “Taxpayers who seek refunds or credit claims that have no reasonable basis in law must be penalized, for they create unnecessary burden on both the IRS and the American people by straining resources and impeding tax administration.”

    In response to the findings, IRS management "raised concerns about the costs and benefits of establishing processes and procedures... to assess erroneous refund penalties", but did not support these concerns with documentation or analysis.


Note: A version of this article first appeared at The Weekly Standard.

Medicaid Accidentally Overpays $88M to Alabama

    The State of Alabama received bonus payments from Medicaid for 2009 and 2010 that were a stunning 13 times higher than the state was eligible for.  So says the inspector general (IG) for Health and Human Services in a report released on Wednesday.  Instead of $7.1 million, Alabama received $95.3 million in performance bonuses related to the Children's Health Insurance Plan (CHIP) for the years in question.  As a consequence, the state owes the federal government a refund of about $88 million.
    The overpayment was not the result of a complicated series of errors or deliberate misrepresentation, but rather a very simple error, as the report spells out:

The State agency overstated its current enrollments because, rather than reporting a monthly average enrollment of qualifying children, it reported to CMS [Centers for Medicare & Medicaid Services] the total number of all qualifying children that had been enrolled in its program for each year reviewed.

    In other words, even children who qualified for CHIP for only a few months during the year were counted as if they were qualified the entire year.  That means the number of qualified children was overstated by more than 90,000.
    The IG choose to investigate the payments to Alabama because the state received over one-third (34%) of all such bonus payments to all states for 2009-2010:

We reviewed the bonus payments that Alabama received for FYs 2009 and 2010 because the amounts of the payments were relatively high compared with those of other States receiving bonus payments.  Alabama received $95 million (34 percent) of the $281 million in bonus payments made to all States for these 2 years.

    It is unclear why this imbalance did not raise any red flags at CMS prior to the IG's audit.
    According to a report on the Alabama-based website al.com, the State of Alabama wants to work out a repayment plan for the $88 million with the federal government.  The state's health office Dr. Don Williamson is quoted as saying that he believes the state Medicaid "acted in good faith" when filing for the refunds.
    Initially, Alabama disputed the findings in a May 2013 letter to CMS from acting Alabama Medicaid commissioner, Stephanie McGee Azar:

"Alabama Medicaid believes that it qualified for the bonuses at issue," according to the letter dated May 17, 2013. "CMS has worked closely with Alabama Medicaid in preparing the state's yearly bonus application in compliance with federal requirements since the State's first submission in 2009."

    The bonus payments were authorized in the Children’s Health Insurance Program Reauthorization Act of 2009 (CHIPRA).  According to the report [emphasis added]:

[Q]ualifying States may receive bonus payments for FYs 2009 through 2013 to offset the costs of increased enrollment of children in Medicaid.  A State is eligible for a bonus payment if it increased its current enrollment of qualifying children (current enrollment) above the baseline enrollment of qualifying children (baseline enrollment) for a given year as specified in CMS guidance.  A State must also have implemented at least five of the Medicaid enrollment and retention provisions specified in CHIPRA. 

Note: A version of this article first appeared at The Weekly Standard.

Food Stamp Trafficking Up 30% From 2008 to 2011 [Updated]

    The U.S. Department of Agriculture* (USDA) released a report on Thursday regarding illegal trafficking in the Supplemental Nutrition Assistance Program (SNAP), more commonly known as food stamps.  The report showed that the rate of trafficking rose from 1% of total benefits in the last study period of 2006-2008 to 1.3% in the current study period of 2009-2011, an increase of 30%.  The report noted the trafficking rate remains well below a rate of almost 4% that existed for much of the 1990s.  The rate plunged to 1% by the 2002-2005 study period and remained there until the current report:

    While the rate remains relatively low, the sharp increase in the SNAP program means the total annualized dollar amount of fraud reached a record level of $858 million, exceeding the $811 million from 1993.  This value had been dropping dramatically to a low of $241 for 2002-2005, then ticked up to $330 million in 2006-2008 before exploding in the current report to $858 million.

    The report attributes much of the dollar increase to the growth in SNAP.  Total redemptions more than doubled from 2008 to 2011:

A substantial portion of this increase is due to the growth in the program, where redemptions totaled $36 billion in 2008 (the last year of the previous study period), then increased to $55 billion in 2009 (the first year of present study period) and eventually to $73 billion in 2011. 

    The latest figures show that SNAP redemptions rose again in 2012 to $74.6 billion.
    The USDA study also found that the percentage of authorized SNAP stores engaging in trafficking went from 8.2% in 2006-2008 to 10.5% in 2009-2011, a 28% increase, but still not as high as an 11.7% rate in the 1990s.
    Although food stamp trafficking is illegal, the report notes that

trafficking does not increase costs to the Federal Government, it is a diversion of program benefits from their intended purpose of helping low-income families access a nutritious diet.

    In conjunction with the release of the report, the USDA announced "Additional Measures to Improve Integrity in the Supplemental Nutrition Assistance Program."

UPDATE:

    I don't usually link to reactions to my articles, but I thought the contrast of these two was interesting:

• Jonathan Cohn - The New Republic
• Neil Cavuto - Fox Business

*Corrected.  Originally said "Food and Drug Administration".

Note: A version of this article first appeared at The Weekly Standard.

Dept. of Transportation Audit of Stimulus Money Terminated Despite Estimated Improper Payments of $100M

    Despite an admission by the Department of Transportation (DOT) that the Federal-aid Highway Programs under the American Recovery and Reinvestment Act (ARRA) are "susceptible to significant improper payments," the DOT Inspector General has terminated an audit initiated in April "due to other higher priority work demands."  The original announcement of the audit of the ARRA programs (better known as the "stimulus") reported that DOT estimated improper payments of more than $100 million in 2012 alone [emphasis added]:

FHWA has funded approximately 13,000 State and local highway  infrastructure projects and has disbursed almost  $26 billion in ARRA funds.
The Improper Payments Information Act of 2002 makes Federal agencies accountable for preventing and detecting improper payments within their programs. The Improper Payment Elimination and Recovery Act of 2010 requires identification and estimation of improper payments. The Department of Transportation (DOT) has identified FHWA’s Federal-aid Highway Programs as susceptible to significant improper payments. In fiscal year 2012, DOT reported an estimate of $103.2 million  in improper payments in FHWA’s Federal-aid Highway Program.

    A report on another IG audit relating to the Federal Highway Administration and the ARRA was just issued on May 7, 2013 and found areas for improvement in DOT's oversight of the administration of program funds:

On May 7, 2013, we reported that FHWA inspections did not routinely verify whether States detected instances of noncompliance with some Federal requirements. For example, we projected that $125.6 million, or 12 percent, of ARRA progress payments made to contractors in three States were unsupported.

    The IG said that "all four recommendations" stemming from that audit were "resolved but open pending completion of planned actions" by DOT.

     The more recent audit, which began in April and was terminated this week, was intended to test DOT's internal controls to see if they were adequate to "prevent and detect improper payments" to ARRA grant recipients. The IG's termination letter stated that the audit may still take place at a later date.


Note: A version of this article first appeared at The Weekly Standard.

Another IRS Scandal: Two ‘Sentenced for Unemployment Insurance Fraud’

    Congressional hearings over the last two weeks have been filled with stories of misconduct due to incompetence and inexperience among certain IRS employees.  Both Republicans and Democrats have leveled the accusations, and Internal Revenue officials testifying before Congress have admitted as much.  At the same time, all parties have stressed that the vast majority of IRS employees are hard-working, competent, and honest civil servants.

    This story isn't about them either.

    The Indiana Department of Workforce Development just announced the sentencing of two former IRS employees for unemployment insurance fraud.  Seven other former IRS employees have already been convicted and sentenced as a result of the investigation:

INDIANAPOLIS  – Over the past week two former United States Internal Revenue Service (IRS) employees have been sentenced for unemployment insurance fraud. Carmen Brown, also known as Carmen Smith, 41, of Indianapolis, and Terri Wardell, 48, of Fishers, both pled guilty to unemployment insurance fraud. The two filed for and received unemployment insurance benefits while working full-time for the IRS. Smith illegally received nearly $14,000 in benefits. Wardell fraudulently collected over $18,000... 

“It does not matter who you are or who you work for, we work diligently to make sure those who take funds they are not eligible for, are held accountable”, said Scott B. Sanders, Commissioner of the Indiana Department of Workforce Development. “These funds are for Hoosiers truly in need and we take our job safeguarding these funds very seriously.” 

    The IRS detected the original signs of fraud and reported the information to the DWD who then pursued the investigation resulting in these convictions.


Note: This article first appeared at The Weekly Standard.