The onset of the COVID-19 pandemic was an inflexion point for everything in our society, especially in regards to welfare and our social safety net. Recipients of SNAP (which used to be called food stamps) swelled in the last two years, as have the funds allocated to the program, and this serves as a reminder of the risks involved in such programs.
On the latest episode of the Drill Down podcast, Eric Eggers and Peter Schweizer discuss how big business and state governments share incentives to underreport and perpetuate SNAP fraud.
Food assistance to the poor is a critical service, but is rife with all your favorite forms of corruption. State agencies receive more money from Washington if they report lower rates of fraud. Businesses that handle SNAP’s financial services make more money from the EBT cards, used for SNAP benefits, that are sold on the black market. And street criminals are allowed to run rampant because of institutional incentives not to intervene.
In fact, some of these profits from black market schemes have ended up in the hands of Islamic terrorists.
The recent influx of new SNAP recipients now only serves to strain an already understaffed fraud prevention unit for the program, and unless changes are made regarding state agencies and financial services, simply hiring more anti-fraud officers can’t solve the problem.
The Government Accountability Institute studied the corruption of the food stamp program in 2018. You can read the full report here.