EDITORIALS

If LePage wants to eliminate welfare fraud, he should look beyond bars, strip clubs

Gov. Paul LePage, center, speaks with supporters at his re-election campaign kickoff event Nov. 5, at the Buker Community Center in Augusta.
Scott Thistle | Sun Journal
Gov. Paul LePage, center, speaks with supporters at his re-election campaign kickoff event Nov. 5, at the Buker Community Center in Augusta.
Posted Jan. 09, 2014, at 4:17 p.m.
Last modified Jan. 09, 2014, at 5:29 p.m.

Let the political campaigning begin. Or did it ever stop?

Of course no one wants recipients of state cash benefits to use them at bars and strip clubs. That’s why it’s illegal.

And clearly those who use their state assistance illegally should be prosecuted. That’s why the LePage administration hired eight new investigators, and the Fraud Investigation and Recovery Unit at the Maine Department of Health and Human Services investigates complaints.

We get it. Fraud is bad.

On Tuesday, Gov. Paul LePage released data compiled by DHHS showing more than 3,000 electronic benefit transfer, or EBT, transactions made at smoke shops in Maine, nearly 650 transactions made at retail establishments that primarily sell alcohol, such as bars and sports pubs, plus several transactions at liquor stores and strip clubs over a nearly 36-month time period.

Putting aside the fact that the state doesn’t know what is purchased with EBT cards, which are issued to those receiving benefits under the Temporary Assistance for Needy Families program, and the fact that some of the transactions were made at ATMs, the 3,701 transactions in question represent 0.2 percent of all transactions during that time.

If LePage thinks that 0.2 percent is “ eye-opening” and “indicates a larger problem than initially thought,” then he should be even more disturbed by the misuse of money by his own departments and lack of adequate safeguards. Remember when MaineCare continued paying the bills for up to 24,300 people after they lost eligibility?

A 2012 audit found significant deficiencies and questionable costs within MaineCare and Medicare. “No systematic electronic method has been developed that will determine whether Medicare Parts A and B health insurance premiums paid by the State are made only for eligible individuals,” the audit states.

It is difficult to determine exactly how much fraud exists within government. But from what research there is, “improper payments” are often made because of governmental mistakes, automated systems that don’t adapt well to complexity, lack of oversight, lack of staff and incompetence — not active fraud.

Past inspector general audits of various state welfare programs have found 20 to more than 40 percent of TANF payments to recipients made in error — mostly because they were for ineligible families, were calculated incorrectly or were duplicated.

The theme continues for Medicaid. Most of the financial loss from health care fraud comes not from low-income beneficiaries but health providers and drug companies misrepresenting their bills to MaineCare. Another program, food stamps — formally known as the Supplemental Nutrition Assistance Program — has a low fraud rate, but some of it is committed by stores that traffick the benefits for cash.

Nationally, the White House estimates all types of improper payments amount to 4.3 percent of entitlement spending. The Association of Certified Fraud Examiners estimates a similar amount for businesses, which lose about 5 percent of annual revenues to fraud. Those who caused the greatest median loss due to fraud? Owners and executives.

It’s easy, at least rhetorically, to go after the few people who are scamming the system. It makes for a campaign rallying cry no one will disagree with. But getting to the root of fraud requires going after all the perpetrators who misuse tax dollars, whether they do so intentionally or not. It requires a look in the mirror.

Don’t let LePage vilify the poor, so it will be easier for him to cut programs. Instead, hold him accountable for changing the way his own government operates, to be less prone to mistakes and redundancies that hurt the taxpayer just as much.

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