Texas welfare agency lets crack pipe vendor take food stamps

1/25/2015
Jon Cassidy

Watchdog.org photo by Jon Cassidy.

DECISIONS, DECISIONS: Crack pipes and ‘water dogs’ are among the utensils you could pick up at this Dallas market, which accepts the Lone Star card.

DALLAS – Anybody want to buy a crack pipe with food stamps?

I know a place in South Dallas we could try. It’s a little market off Bonnie View Road with a case full of glass pipes for various vices up front, and it’s been authorized by the state to accept payment by Lone Star card, which Texas uses to distribute funds from the Supplemental Nutrition Assistance Program.

That money’s supposed to be used for food, which is why the U.S. Department of Agriculture requires retailers accepting SNAP funds to certify that at least half their sales are from certain food items, or failing that, that no more than 10 percent of their revenue comes from “alcoholic beverages, legalized games of chance, sexually oriented materials, coin-operated amusement machines, or amusement services.”

You might figure that a market with the words “beer” or “wine” or both right in the store name is unlikely to meet either standard, that it’s in the business of getting people faded, not fed.

Yet there are 17 markets in Dallas with the words beer, wine or tobacco in the store’s name authorized to accept Lone Star cards. I toured all 17 last summer as part of an investigative partnership that fizzled, but I did learn a couple of things worth mentioning now that the state Health and Human Services Commission’s oversight troubles have been in the news. Just Wednesday, Gov.-elect Greg Abbott announced a new review of HHSC’s management, operations and contracting.

One is that there’s a loophole in the SNAP requirements that booze vendors are abusing. The other is that while HHSC clearly struggles to keep an eye on the money it distributes, the problem isn’t just that the job is hard. It’s that HHSC has an aversion to oversight when it might prove embarrassing.

Watchdog.org photo by Jon Cassidy

THAT’S SOME SELECTION: This is actually one of the better stocked ‘compliance shelves’ found at beer and wine retailers around Dallas.

As long as a store offers a few items from various categories — dairy, meat, fish, etc. — on a “continuous” basis, it doesn’t have to worry about how much alcohol it sells. If you’ve ever seen a dusty shelf of Spam, sardine cans and Matzo balls on your way to the cooler, you’ve got an idea of how retailers comply with the requirement.

Three or four of the 17 retailers were clearly in the grocery business, but most were beer and wine sellers that had some version of the compliance shelf.

The pipe vendor was in compliance, although I’d never before seen loaves of bread stacked just off the floor in a back corner. It’s unlikely that the vendor would even get in trouble for the pipes, although possession of drug paraphernalia is a misdemeanor in Texas. So long as the pipe is unused, the seller can insist it has a legal purpose. The device that any tweaker would call a water dog is just an innocent “oil burner” until it’s put to use.

As I was leaving, I noticed a torn sign next to a giant Lone Star banner advising there should be “No drug active on premise,” and a young man offered to sell me a giant fax machine out of his van, but this wasn’t even the sketchiest store I came across.

Off a frontage road for US-67, there’s a “Tabaco” shop next door to a homeless shelter that didn’t even bother with the pretense of a compliance shelf. It had a few candy boxes on the shelves, but they were empty. The only products on display were ice cream, beer and malt liquor.

There was nobody behind the bulletproof glass at the counter when I walked in, but somebody out front hollered, and a shirtless, tattooed young man with a braided beard appeared after a minute to explain politely that they didn’t have any chocolate or candy I could buy.

I asked HHSC for a look at transaction records for all 17 stores, and according to a recent federal appeals court ruling, these ought to be public record. But HHSC isn’t going to be giving anybody a look at SNAP receipts for crack pipes or Mad Dog 20/20 any time soon.

That’s because Abbott was a lot less interested last July than he is now in holding HHSC accountable. As attorney general, he was in charge of deciding public records disputes, and my request should have been an easy one. Last January, a federal appeals court ruled in a nearly identical case that the U.S. Department of Agriculture was wrongly withholding SNAP transaction records from a newspaper that had requested them. The court ruled that electronic transaction records generated by the department from payment processors didn’t count as private business records.

In my case, HHSC took the same position as the USDA, and Abbott’s office signed off on it, without even acknowledging the case. The problem isn’t just sloppy or indifferent legal research. It’s that HHSC thumbed its nose at public records law. It took two months to request a ruling rather than 10 days, it didn’t notify me (providing me a chance to argue my case) or send me its briefs as required.

Watchdog.org photo by Jon Cassidy

AHH, FOOD: Here we’ve got bread, and the Slim Jims might qualify as meat. There’s milk in the cooler, too, and that should just about guarantee our eligibility to keep accepting Lone Star cards.

Those violations should have triggered automatic disclosure requirements in state law, but Abbott’s office refused to enforce them. Assistant Attorney General Cindy Nettles wrote me July 25 to deny my request, because under state law, “a governmental body is prohibited from asking for a reconsideration of the attorney general’s decision.”

Obviously, I am not a governmental body, but this was doubly galling, because just a few months earlier in a dispute over law school entrance exam scores, her office had reconsidered and revised a decision at the request of the University of Houston. I wrote about that in a story headlined “Texas AG Greg Abbott embraces Roe v. Wade,” dated July 25, just like Nettles’ letter.

These anti-transparency rulings undermine the sort of accountability that officials are so eager to support now, as can be seen in a recent lawsuit filed by a former HHSC investigator named Jose Carrizal. Despite a massive inspector general’s office, which conducted 103,618 investigations, reviews and audits of HHSC in fiscal 2013, the agency is often slow to police itself absent outside pressure.

In his lawsuit, Carrizal says that Internal Affairs refused to investigate all but a few of the 160 recent cases where children died under the supervision of Child Protective Services. He claims the agency refused to investigate all cases outside Dallas and Houston, and that the investigations it did conduct were little more than cursory checklists involving no new interviews or outside sources of information.

In 2013, the Austin American-Statesman published an article on one of those cursory investigations.

“As a result of the Statesman article, multiple changes were made to the manner in which CPS child death investigations were handled from that point forward,” Carrizal’s lawsuit claims. “OIG (Office of the Inspector General) investigators were ordered to conduct ‘thorough’ investigations when they should have been conducting thorough investigations all along.”

In October, the Sunset Advisory Commission published a massive review of HHSC, which paints a picture of an agency overwhelmed by the difficulty of auditing the recipients of federal funding and has turned instead upon itself.

The Office of the Inspector General, for example, had a budget of $48.9 million last year, but struggles to recoup that amount in waste, fraud and abuse. In other words, it might actually cost the taxpayers more to try to stop fraud in the $24 billion Texas spends on Medicaid annually than to just let it go. OIG recovered only $5.5 million in Medicaid overpayments in 2012 and 2013, despite claiming that it had identified $1.1 billion in potential overpayments.

Watchdog.org by Jon Cassidy

VEGGIES: A few of the beer and wine retailers were also quite clearly in the grocery business.

The reason for that inflated claim, according to the Sunset commission, is that “OIG does not distinguish between clerical errors, lack of documentation, or not actually performing a service in setting the amount of the recoupment of state money or penalties for program violations. In most cases, OIG seeks to recoup the full payment amount for each service claim that includes an error, regardless of whether a service was fraudulently provided or whether the provider made a simple clerical error.”

Despite an open caseload of 1,156 Medicaid investigations, OIG was only able to prove overpayment in 12 cases in 2013.

HHSC officials awarded a $110 million contract for some unproven software that was supposed to help them start getting results, but that’s blown up in their faces amid allegations of improper contracting, and led to several high-level resignations.

That record is actually an improvement on the past, according to the Sunset commisison.

“OIG’s enforcement division has historically been fairly inactive,” the audit states. “Before 2011, OIG had never brought a case before the State Office of Administrative Hearings and both identification and recovery of overpayments to providers were considerably less than they are now.”

So if these investigators haven’t been digging up much in the way of Medicaid scams or impromptu programs to provide 40s of Mickey’s to the homeless, what have they been up to? Like a drunk searching for his keys under the street lamp because that’s where the light is, OIG has been spending a lot of time and resources on personnel complaints that are easy to investigate.

The Sunset commission criticized the OIG for turning itself into a massive HR department, running “investigations” into issues that other agencies handle at the managerial level, if at all, such as “performing stakeouts in system parking lots to catch employees using illegal substances.”

Investigators checked out employees writing personal emails at work, or spending time on Facebook and Twitter. A few of them, however, have been cracking down on moochers who see the social welfare agency as little more than a free lunch. Or, as the Sunset report put it, “OIG even spent time investigating lunches stolen from office refrigerators …”

Contact Jon Cassidy at jon@watchdog.org or @jpcassidy000.

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