EBT cards rife with abuse, corporate banking nepotism

Thursday, November 22, 2012 by: J. D. Heyes
Tags: EBT cards, abuse, banks

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(NaturalNews) It's a scandal that has grown exponentially, in conjunction with the welfare state: The abuse of government-provided, taxpayer-funded nutritional assistance programs that, quite frankly, don't provide much in the way of "nutrition," but which serve to increase both the national debt and the country's collective waistline.

"Today, while stopping to get a few items at a local convenience store, the lady in front of me paid for her items using a Department of Children and Families EBT card. I have no issue whatsoever with those in need using this program. In fact, I think for some it is necessary," Matt Kastensmidt, of Vero Beach, Fla., wrote in a "letter to the editor" of the local paper, TCPalm.com, that summarizes growing taxpayer angst.

"My issue was with what she laid on the counter and was able to pay for with this card: a Red Bull energy drink, a lollipop for her son and a KitKat bar," Kastensmidt wrote. "Really? This is where my tax dollars are going? Something has got to be done about this. If this is nutritional assistance, I must be missing something. Come on, government; you can do better than this."

Poor food choices, card scams mean bad things for taxpayers

For years, recipients of government food subsidies - some of which are doled out on the state level but most of which come from the federal government, via the U.S. Department of Agriculture - have abused their benefits in this manner.

In addition to making poor food choices with their EBT (electronic benefits transfer) cards - which tend to enrich mostly junk food corporations - scores of recipients and businesses have colluded to scam the system out of hundreds of millions of dollars a year.

According to The Fiscal Times:

The typical fraud would go this way: A card holder would offer to sell the card to a merchant or someone else at a major discount - say $50 or $60 in cash for a card worth $100 - and provide them with the PIN number. The seller would tell the purchaser to use up the value of the card within a week, before the seller planned to notify the government that the card had been lost or stolen. By the time the government tried to change the PIN number, the value of the card had been used up.

In short, the EBT system has become little more than a taxpayer-subsidized shopping spree, and though some efforts are being made to crack down on the abuse, the staggering number of people on food stamps - more than 46 million, or 15 percent of the U.S. population - has only led to more waste, fraud and abuse within the $80-billion-plus annual program.

Poverty program is now a bank profit program

Not only that, but the program has turned downright profitable for one of the nation's largest banks: JP Morgan Chase.

According to Peter Schweizer, president of the Government Accountability Institute and the William J. Casey Fellow at the Hoover Institution at Stanford University, the welfare state has become "a profit center."

"In 2010, President Obama signed into law the Healthy, Hunger-Free Kids Act. The bill added $4.5 billion to child-nutrition programs over the next decade, put in place nutrition standards for school lunch programs and vending machines, and implemented training for the cafeteria workers who feed 31 million students a day through the National School Lunch and School Breakfast programs," he writes in The Daily Beast.

The law mandates that state agencies implement an EBT program by Oct. 1, 2020, for those receiving money through the Women, Infants, and Children (WIC) program. And guess which company already administers half of the state programs?

JP Morgan Chase.

It's hard to say how lucrative this business is for the bank is hard to say because, unbelievably, there is no national reporting requirement for total EBT contracts. But suffice it to say the bank wouldn't be "in the business" of poverty if it wasn't profitable.

Schweizer did some of the math; however, based on public records requests and data available online: "18 of the 24 states JP Morgan handles have been contracted to pay the bank up to $560,492,596.02 since 2004. Since 2007, Florida has been contracted to pay JP Morgan $90,351,202.22. Pennsylvania's seven-year contract totaled $112,541,823.27. New York's seven-year contract totaled $126,394,917," he wrote.

The contracts are transactional, he said. "Each month, the three companies that administer EBT receive a small fee that can range from $.31 to $2.30 (or higher depending upon the number of welfare services on an EBT card and state contractual requirements) for each SNAP (Supplemental Nutrition Assistance Program) recipient," he said.

And there is this fact. Since 2002, the bank's political contributions to members of the House and Senate Agriculture Committees have risen steadily.

Political nepotism. Poor food choices with no purchase requirements and little oversight. Scamming of benefits. Yep - sounds like just another government program.







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