Three major corporations have cornered the market for providing services to the needy and destitute through the federal food stamp program — now called the Supplemental Nutrition Assistance Program (SNAP).
Those three companies are — J.P. Morgan EFS, Affiliated Computer Services, and eFunds.
That’s according to a report released last week by the Governmental Accountability Institute.
The title of the report — Profits from Poverty: How Food Stamps Benefit Corporations.
The report quotes an executive from JP Morgan, the largest food stamp industry player, as saying that the business of food stamps “is a very important business to JP Morgan. It’s an important business in terms of its size and scale . . .Right now volumes have gone through the roof in the past couple of years or so. The good news from JP Morgan’s perspective is the infrastructure that we built has been able to cope with that increase in volume.”
Originally conceived as a means to prop up sagging crop prices to support American farmers, the Food Stamp Program, now called the Supplemental Nutrition Assistance Program, or SNAP, has exploded into a welfare program that costs taxpayers a record $75.67 billion in 2011, the group reported.
Lax security by electronic benefit transfer (EBT) processors and states invites food stamp fraud, often through social media, the report found.
“There are understaffed fraud investigation units at both the federal and state level,” the group reported. “For example, Florida has just 63 staff positions to police approximately 3 million EBT users statewide.
These investigators not only handle TANF and SNAP eligibility fraud, but also EBT trafficking, Social Security Disability and Medicaid eligibility fraud, Emergency Financial Assistance for Housing, and Low Income Energy assistance, among many others.”
The Government Accountability Institute’s Peter Schweizer went on Fox News earlier this month to release his findings.
“Welfare in America is supposed to be a safety net for those in need, but instead, it’s become an insider’s game of power and profit,” Schweizer said.
“Tonight, you’re going to learn that food stamps are not just a program. It’s an industry. It begins here at the U.S. Department of Agriculture with the tentacles of this industry extend to Wall Street and Madison Avenue and includes some of the largest corporations in America. It’s an industry that has lobbyists, advertisers, and promotions and an increasing market share.”
“It started as a way to get farm fresh produce onto the tables of the hungry and give a boost to struggling farmers along the way. But the program has grown enormously. Big corporations and their lobbyists spend millions to try to get their hands on a piece of this $75 billion pie.”
“Food stamps have become big business in America. They were originally intended for things like cheese, eggs, meat and vegetables. But thanks to the aggressive lobbying of large corporations, they can be used for everything from soft drinks to in some cases, fast food.”
“Chains like Pizza Hut and Taco Bell have fought with mixed results to get a cut of the money with only some states green lighting the use in certain locations. At the same time, corporations like Coca-Cola and Kraft Foods have successfully lobbied against bills that would block soda and junk food from being food stamp eligible.”
“With the program experiencing explosive growth, it shows no signs of slowing down because the politicians argue that the bigger the program gets, the better it is for America.”
Then, guest host Sean Hannity brought on a lobbyist for the soda industry — Karen Hanretty, vice president of public affairs for the American Beverage Association.
The question on the table — should liquid candy — aka sugary soft drinks — be part of the food stamp program.
Hanretty: You know, this notion that they are spending millions of dollars lobbying in order to get their hands on this money, which is just simply not the case because the USDA has never had a list of excluded foods. They’ve never had a list of good foods versus bad foods, healthy foods versus unhealthy foods.
That’s the way we should want it. As a conservative, you do not want the federal government getting in the business of saying you’re on the good list. You’re on the bad list. That’s a very slippery slope to go down.
Schweizer: Karen, with all due respect, the program was set up initially to provide basic nutritional needs. So it was cheese and it was meat —
Hanretty: In the 30s, right.
Schweizer: It was originally set up. What you had is the expansion of it. So now you have snack foods and soft drinks —
Hanretty: You had that for decades. You had that — in the ’60s they passed the stamp act in 1964.
Schweizer: Right. How did that act get implemented? It didn’t get implemented because you had food stamp recipients coming to Washington asking for it. It happened because industries saw and recognized that government money puts money on the table and they were looking to make that money. I have no problem —
Hanretty: Actually, that’s not entirely accurate either because if you look at the congressional record in 1977, Congress — there has been a lot of debate. How do you insure that your taxpayer dollars are going toward only — I think what commonly would be referred to as healthy foods, right? In 1977, Congress said listen, trying to sort through the good versus the bad is a cure worse than —
Schweizer: That’s not what we’re talking about. We’re not talking about sorting between good and bad.
Hanretty: You would have to sort between good and bad. You have over 300,000 food products that government bureaucrats will have to go through.
Schweizer concludes by saying that “the problem is the more our poverty was fought and poverty won.”
“The United States since the 1960s has spent $15 trillion, that’s trillion with a “T” on antipoverty programs. That’s about the same size as the U.S. national debt,” Schweizer said.
“While the poverty rate in the 1960s was around 15 percent, it remains stubbornly there to this day. So if these programs have not helped people that are in need, who has benefited? Large corporations and this town, boom town, have profited enormously from the expansion of these programs.”
“Since 2008, federal government spending on food stamps has doubled. That’s your taxpayer dollars. As the rolls increased, the profits in some of America’s largest corporations have increased as well.”