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Legal Review: Challenges Plague Fight Against Food Stamp Fraud

by Amato Sanita — June 30, 2016 at 4:45 pm 0

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Amato Sanita is a criminal defense attorney who practices in state and federal courts in Buck’s County and Philadelphia, PA.

Maine officials recently testified before the U.S. House Oversight and Government Reform Committee to address concerns over fraudulent use of food stamp benefits. Department of Health and Human Services Commissioner Mary Mayhew and others have been petitioning the federal government and the U.S. Department of Agriculture to allow the state to pursue photo identification on all benefit cards in Maine.

Food stamps, known so because they were at one time issued as stamp books, have evolved to a more modern shopping device. Presently known as SNAP — Supplemental Nutrition Assistance Program — benefits, food stamp allowances are loaded on electronic benefit transfer (EBT) cards similar to debit and credit cards.

Easily manipulated and traded like any cash commodity, food stamps have long been subject to fraudulent misuse. Difficult to prevent and trace, food stamp fraud has been given careful consideration by both the USDA and state agencies that administer the program. According to latest statistics, fraud is down from a 1990’s rate of four-cents on the dollar to just one penny per dollar loss.

To lower the fraud rate even more, some agencies, like Maine’s, are attempting to convert all EBT cards to a mandatory photo ID card. In theory, it is a simple solution to combat food stamp trafficking. Maine officials have issued 60,000 photo cards voluntarily and would like to increase the number to include all of the state’s 101,000 SNAP recipients.

Not so fast, say USDA officials responsible for regulating the food stamp program.

SNAP is a federally funded program administered by state agencies, but who sets the rules can be a legal conundrum. An issue as commonplace as a photo ID card quickly becomes mired in questions of federal and state law with constitutional ramifications.

In the District of Columbia, where SNAP beneficiaries number over 130,000 or twenty percent of the population — one of the highest ratios in the nation — food stamp fraud is just as much an issue. The District has no photo requirement for its EBT cards.

However, like Maine recipients, SNAP users in Washington, D.C. can spend their monthly benefit in any state and at any retailer that accepts EBT. Because of the District’s size and proximity to other states, it is likely that a recipient in the nation’s capital might use their EBT card in Maryland or Virginia. Hence one significant issue with photo EBT cards.

Pursuant to federal regulations and the USDA’s own rules, inclusion of a photo on the EBT is entirely legal. The Food and Nutrition Act of 2008 allows that a state agency may require photos — it is in the implementation that conflict arises.

Lacking uniformity among all states poses a challenge to SNAP users. If D.C. SNAP recipients have no photo EBT card and travel to Maine, would their cards be valid as required by program regulations? An EBT card from one state must be honored in another state.

Another challenge that the many agencies need overcome is a separate federal provision that requires that no retail grocer “may single out [EBT card] users for special treatment in any way.” Taken in a strictly legal context, this means that a retailer who must see a photo ID for an EBT card user must also ask any debit or credit card user for the same identification.

Additionally, Article I, Section 8 of the U.S. Constitution grants the U.S. Congress the exclusive power to regulate commerce among the states. At first blush it would appear that the regulation of food stamp spending and usage — as a form of interstate commerce — is vested solely with federal regulations and the USDA. One state cannot refuse to honor EBT cards issued by another state simply because a recipient has crossed a state line; or, if a card has a photo or not.

The creation of a simple photo ID card becomes a complex and twisted struggle between the federal agency that funds SNAP and the many state agencies that administer the benefits.

In Washington, D.C., at least two agencies — the city’s Economic Security Administration and the Department of Human Services — are involved in the application, issuing, and regulation of SNAP benefits. They do so only under the provisions established by the USDA.

While food stamp fraud is a financial crime, is can easily lead to drug and property crimes. Preventing fraud is a necessary multi-agency consideration. Like any problem that affects society as a whole, the solution is neither a federal nor a state question singly.

Maine’s attempt to issue statewide photo ID cards for SNAP recipients may someday end up before the U.S. Supreme Court. Until then, as long as the needy are not punished or discriminated against for using an EBT card properly, the USDA and states must work cooperatively to reduce fraud using the best practices available.

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