U.S. GOVERNMENT PUBLISHING OFFICE

32–575 PDF WASHINGTON : 2018

SUPPLEMENTAL NUTRITION ASSISTANCE 

PROGRAM FRAUD 

JOINT HEARING 

BEFORE THE

SUBCOMMITTEE ON 

INTERGOVERNMENTAL AFFAIRS 

AND THE

SUBCOMMITTEE ON HEALTHCARE, 

BENEFITS, AND ADMINISTRATIVE RULES 

OF THE

COMMITTEE ON OVERSIGHT 

AND GOVERNMENT REFORM 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED FIFTEENTH CONGRESS 

SECOND SESSION 

SEPTEMBER 26, 2018 

Serial No. 115–103 

Printed for the use of the Committee on Oversight and Government Reform 

( 

Available via the World Wide Web: http://www.govinfo.gov 

http://oversight.house.gov 


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COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM

Trey Gowdy, South Carolina, Chairman 

John J. Duncan, Jr., Tennessee 

Darrell E. Issa, California 

Jim Jordan, Ohio 

Mark Sanford, South Carolina 

Justin Amash, Michigan 

Paul A. Gosar, Arizona 

Scott DesJarlais, Tennessee 

Virginia Foxx, North Carolina 

Thomas Massie, Kentucky 

Mark Meadows, North Carolina 

Ron DeSantis, Florida 

Dennis A. Ross, Florida 

Mark Walker, North Carolina 

Rod Blum, Iowa 

Jody B. Hice, Georgia 

Steve Russell, Oklahoma 

Glenn Grothman, Wisconsin 

Will Hurd, Texas 

Gary J. Palmer, Alabama 

James Comer, Kentucky 

Paul Mitchell, Michigan 

Greg Gianforte, Montana 

Michael Cloud, Texas 

Elijah E. Cummings, Maryland, Ranking 

Minority Member 

Carolyn B. Maloney, New York 

Eleanor Holmes Norton, District of Columbia 

Wm. Lacy Clay, Missouri 

Stephen F. Lynch, Massachusetts 

Jim Cooper, Tennessee 

Gerald E. Connolly, Virginia 

Robin L. Kelly, Illinois 

Brenda L. Lawrence, Michigan 

Bonnie Watson Coleman, New Jersey 

Raja Krishnamoorthi, Illinois 

Jamie Raskin, Maryland 

Jimmy Gomez, Maryland 

Peter Welch, Vermont 

Matt Cartwright, Pennsylvania 

Mark DeSaulnier, California 

Stacey E. Plaskett, Virgin Islands 

John P. Sarbanes, Maryland 

SHERIA CLARKE, Staff Director 

WILLIAM MCKENNA, General Counsel 

BETSY FERGUSON, Counsel 

KILEY BIDELMAN, Clerk 

DAVID RAPALLO, Minority Staff Director 


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SUBCOMMITTEE ON INTERGOVERNMENTAL AFFAIRS

Gary Palmer, Alabama, Chairman 

Glenn Grothman, Wisconsin, Vice Chair 

John J. Duncan, Jr., Tennessee 

Virginia Foxx, North Carolina 

Thomas Massie, Kentucky 

Mark Walker, North Carolina 

Mark Sanford, South Carolina 

Jamie Raskin, Maryland, Ranking Minority 

Member 

Mark DeSaulnier, California 

Matt Cartwright, Pennsylvania 

Wm. Lacy Clay, Missouri 

(Vacancy) 

SUBCOMMITTEE ON HEALTHCARE, BENEFITS, AND ADMINISTRATIVE RULES

Jim Jordan, Ohio, Chairman 

Mark Walker, North Carolina, Vice Chair 

Darrell E. Issa, California 

Mark Sanford, South Carolina 

Scott DesJarlais, Tennessee 

Mark Meadows, North Carolina 

Glenn Grothman, Wisconsin 

Paul Mitchell, Michigan 

Raja Krishnamoorthi, Illinois, Ranking 

Minority Member 

Jim Cooper, Tennessee 

Eleanor Holmes Norton, District of Columbia 

Robin L. Kelly, Illinois 

Bonnie Watson Coleman, New Jersey 

Stacey E. Plaskett, Virgin Islands 


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C O N T E N T S 

Page 

Hearing held on September 26, 2018 ..................................................................... 1 

WITNESSES 

Ms. Ann Coffey, Assistant Inspector General for Investigations, USDA Inspector General 

Oral Statement ................................................................................................. 5 

Written Statement ............................................................................................ 9 

Mr. Thomas Roth, Director, Fraud Investigation and Recovery Unit, Maine 

Department of Health and Human Services 

Oral Statement ................................................................................................. 16 

Written Statement ............................................................................................ 18 

Mr. Tarren Bragdon, President and CEO, Foundation for Government Accountability 

Oral Statement ................................................................................................. 21 

Written Statement ............................................................................................ 23 

Dr. Craig Gundersen, Soybean Industry Endowed Professor in Agricultural 

Strategy, University of Illinois 

Oral Statement ................................................................................................. 37 

Written Statement ............................................................................................ 39 


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SUPPLEMENTAL NUTRITION ASSISTANCE 

PROGRAM FRAUD 

Wednesday, September 26, 2018 

HOUSE OF REPRESENTATIVES

SUBCOMMITTEE ON INTERGOVERNMENTAL AFFAIRS, JOINT

WITH THE SUBCOMMITTEE ON HEALTHCARE, BENEFITS, AND ADMINISTRATIVE RULES, COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM, Washington, D.C. 

The subcommittee met, pursuant to call, at 10:19 a.m., in Room 

2154, Rayburn House Office Building, Hon. Gary Palmer [chairman 

of the subcommittee] presiding. 

Present: Representatives Duncan, Issa, Jordan, DesJarlais, 

Massie, Meadows, Walker, Grothman, Mitchell, Norton, Watson 

Coleman, Krishnamoorthi, Raskin, Cartwright, DeSaulnier. 

Mr. PALMER. The Subcommittee on Intergovernmental Affairs 

and the Subcommittee on Healthcare, Benefits, and Administrative 

Rules will come to order. Without objection, the chair is authorized 

to declare a recess at any time. I will now recognize myself for my 

opening statement. 

The Supplemental Nutrition Assistance Program, known as 

SNAP, offers assistance to millions of Americans who cannot afford 

nutritional food for themselves and their families. The Food Nutrition Service, known as FNS, administers the program in partnership with state agencies, but nearly all funding comes from the federal government. In 2017, SNAP provided almost $70 billion in benefits to over 42 

million Americans in need, more than half of whom were children 

and elderly. Efficient and effective program administration is critical for a program that size, for an expenditure that size, and a program that is that important. 

To this end, the subcommittees are holding this hearing to examine fraud in SNAP, which can take a variety of forms. Fraud can 

consist of SNAP recipients providing misinformation about eligibility requirements, such as income, and the number of household 

members. 

For example, in Wisconsin, a woman was charged with hiding income from a live-in boyfriend to fraudulently collect more than 

$25,000 in benefits. Fraud can also consist of SNAP retailers lying 

about meeting authorization requirements. 

For example, the USDA Inspector General found about 3,400 retailers applied for SNAP authorization using the Social Security 

Numbers of deceased people, allowing them to fraudulently redeem 

about $2.6 million in benefits. 


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SNAP recipients and retailers can also commit fraud by trafficking SNAP benefits, a crime that involves exchanging SNAP 

benefits for anything other than eligible food, usually cash. For example, in my home state of Alabama, a grocer trafficked more than 

$5.2 million in SNAP benefits. 

Today, we may hear how SNAP fraud is not extensive, but the 

truth is FNS does not actually know how common fraud is, because 

it is not appropriately measured. The USDA inspector general reported in 2012 FNS has not established how states could compile, 

track, and report fraud in a uniform manner. Even today, the federal government still cannot fully grasp the scope and frequency of 

fraud in the program. However, we can use other sources to obtain 

a sense of scale. 

In 2016, state investigation data identified almost $600 million 

in recipient fraud. Further, FNS data shows SNAP retailers traffic 

about $1 billion in benefits every year. That is 1.6 billion, combined. 

In addition, some state agencies are contributing to fraud by manipulating SNAP’s national payment error rate, the nationwide 

measure of improper payments, an issue this committee has 

worked on to expose, and, hopefully, resolve. This includes FNS 

providing state agencies with bonuses for having low error rates, 

and penalizing those with high ones. 

In 2017, state agencies in Virginia, Wisconsin, and Alaska admitted to false Claims Act violations for fraudulently reporting low 

error rates to exploit this bonus system, agreeing to repay the $16 

million of bonuses they fraudulently claimed. 

Despite these obvious signs of abuse, FNS has not followed 

through on commonsense steps to reduce fraud. For example, FNS 

has not followed through on their own proposed rules to tighten requirements related to retailer trafficking. Similarly, FNS has not 

followed through on the USDA inspector general’s 2013 recommendations to close loopholes, allowing retailers who traffic 

SNAP benefits to remain active. FNS has proposed weaker alternatives instead. 

Also, FNS has ignored the Government Accountability Office’s 

2016 recommendation to help states improve data matching processes to detect potential fraud and improper payments. In contrast, 

state agencies are actively responding to the need to fight fraud. 

In 2016, state prosecutions increased 14 percent, to over 9,000 

cases, and administrative disqualifications increased 23 percent, to 

over 49,000 cases. I believe the states can offer insight into ways 

in which FNS can assist states in fighting fraud, as well as ways 

FNS can make its own fight against SNAP fraud more effective. 

Make no mistake, our fellow Americans deserve help in times of 

need, but fraud takes this assistance straight out of the hands of 

those who need it. Fortunately, we have with us today a panel that 

can speak to the role that Congress can play in the prevention of 

further fraud through the SNAP program. 

I thank the witnesses for being here. And I will now recognize 

the ranking member of the—Mr. Krishnamoorthi, for his opening 

statement. Healthcare, Benefits, and Administrative Rules Subcommittee. How is that? 

Mr. KRISHNAMOORTHI. You got it. 


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Mr. PALMER. Thank you. 

Mr. KRISHNAMOORTHI. Thank you. 

Mr. PALMER. I recognize the gentleman. 

Mr. KRISHNAMOORTHI. Hey, good morning. Thank you to our witnesses for being here today, and thank you to Mr. Chairman for 

holding today’s hearing. 

The Supplemental Nutritional Assistance Program, SNAP, is 

America’s primary anti-hunger program. In 2017, the SNAP program fed over 42 million Americans who face hunger and food insecurity. In my State of Illinois, SNAP provided about $3 billion in 

food benefits, to a monthly average of over 1 million recipients. I 

am proud to say that the program served 100 percent of those eligible for benefits in that same fiscal year. 

In my district, over 50 percent of the households that receive 

SNAP benefits have a child or several children under the age of 18 

years. SNAP is vital to American children. No other nutritional or 

income support program reaches as many at-risk children, or contributes as much to helping very low-income households with children. 

The average SNAP benefit is very small. It is $1.40 per person, 

per family. And every federal dollar spent on SNAP generates 

$1.79 in economic activity. In 2015, SNAP lifted more than 2 million children out of extreme poverty, and kept an additional 8.4 

million Americans out of poverty. 

As a former SNAP recipient, myself, I take very seriously the 

issue of fraud in the SNAP program. The 2017 rate of 6.3 percent 

of improper payments is very troubling, and Congress has an oversight duty to ensure that the USDA and state authorities are doing 

everything possible to make sure that all SNAP benefits go to those 

who deserve it. 

The only acceptable rate of SNAP fraud is zero percent. Any 

fraud in the program means taking away food from those families 

who desperately need the assistance. 

That being said, as we work to eliminate SNAP fraud, we have 

to make certain that any proposed fixes do not result in more harm 

to children and families by reducing eligibility or making it harder 

for families to get the food they need. 

It is possible to eliminate any SNAP fraud without reducing the 

number of eligible people who receive food. In fact, this is the only 

moral way to reduce fraud. SNAP is fundamentally an essential 

health program for this country. It promotes healthy children, wellfed families, and better health outcomes for communities as a 

whole. 

As such, we should keep the first commandment of healthcare in 

mind when addressing SNAP. First, do no harm. My colleagues on 

the other side of the aisle will spend today’s hearing trying to justify cutting SNAP benefits. Their proposals, whether by design or 

by accident, would result in hungry children and families forced to 

decide between paying for food or other basic necessities. 

The republican farm bill would create administrative barriers to 

enrollment by significantly changing policy that automatically enrolls households in SNAP when they qualify for temporary assistance for needy families. It would increase requirements for SNAP 

beneficiaries, and would impose new work reporting requirements 


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on top of existing work requirements. There are already existing 

work requirements to receive SNAP. 

Reading their bill, one could be forgiven for assuming that the 

whole aim of these provisions is to cut the number of people who 

may receive SNAP benefits. SNAP feeds millions of children, seniors, and people with disabilities, including veterans. SNAP is efficiently run. If SNAP did not exist we would have to create a program to do what SNAP does. 

I look forward to hearing your testimony, and thank you so much 

again for everyone attending today’s hearing. 

Mr. PALMER. I now recognize the chairman of the Healthcare, 

Benefits, and Administrative Rules Subcommittee, Mr. Jordan, for 

his opening statement. 

Mr. JORDAN. I thank the chairman for putting this hearing together. The previous speaker talked about republicans want to cut 

benefits. No, we don’t. We don’t want to cut benefits. We just want 

to have a work requirement in place that doesn’t get waived, so 

that people who get fellow American citizens’ hard-earned tax dollars have to do something in order to—if they are able-bodied, have 

to do something to get those tax benefits. 

Understand what is happening in this program. At a time when 

we have 4.2 percent economic growth, lowest unemployment in 20 

years, the food stamp population is at 40 million people. Ten years 

ago, it was at 26 million. 

So if this doesn’t need some reform—I mean if this isn’t a program that needs reforms, someone is going to have to show me 

what would. I mean this is crazy. So that is all we are focused on. 

And where there is fraud and abuse in the program, we want to 

get at that as well. So this is real simple. $68 billion spent a year 

on a program where you have millions of people who are able-bodied adults, who don’t have to do a darn thing to get taxpayer benefits. That is just crazy. 

And every constituent I talked to says that is not commonsense. 

And you know what? Here is amazing. This is like an 85 percent 

issue, requiring a work component for able-bodied people that 

doesn’t get waived by the federal government for respective states. 

Requiring that is like an 85 percent issue across the board. Republicans, democrats, independents, everyone says this is good. The 

only people who are against it are democrats in Washington. 

So this makes all the sense in the world. I am glad the chairman 

is having this hearing. I look forward to hearing from our witnesses about the fraud and abuse that is going on in this program, 

and how we can pass a simple commonsense measure that says 

don’t waive the work requirement concept for something where 40 

million people are getting a benefit from the taxpayer. 

With that, I yield back. 

Mr. PALMER. I thank the gentleman. 

I now recognize the ranking member of the Intergovernmental 

Affairs Subcommittee, Mr. Raskin, for his opening statement. 

Mr. RASKIN. Mr. Chairman, thank you very much, and I want to 

thank all the witnesses for coming today, and participating in the 

hearing, which examines fraud and waste in the program that provides a modest, but critical benefit to over 20 million low-income 

households. 


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SNAP pays, on average, $1.40 per person, per meal. Before that 

tiny stipend is released, Congress requires recipients to prove their 

eligibility, and to work or get training in order to continue receiving SNAP benefits. 

The incidents of trafficking fraud, according to the USDA, is 1 

percent. If we can get it down to zero percent, then, by all means, 

let us do it. But I am afraid that the purpose of today’s hearing 

relates more to the intervention by my friend, Mr. Jordan, who invites us to believe that the whole purpose of the program is suspect, because we have got low unemployment in America today, 

and so why are there millions of people still receiving SNAP benefits? 

I think the answer to that is simple, which is that people are not 

making enough money in their jobs. A lot of people are working not 

just one, but two, or three jobs, and still cannot support their families on it. And that is what the SNAP program is about, making 

sure that our people have decent, good nutrition, and are able to 

feed themselves and their families. 

Our hearing today is about waste, fraud, and abuse. Are we focused on rooting out waste, fraud, and abuse? Well, the most extreme incidences of it are found across the river at the Pentagon, 

but we haven’t had any hearings on that subject this year. An internal report issued by the independent Defense Business Board 

found $125 billion in immediate savings that would be available by 

cutting spending in waste at the Pentagon. 

That is almost twice the entire annual budget of SNAP. But apparently, we are not interested in the chronic problem of Pentagon 

waste and bloat. Why hasn’t this committee held a single hearing 

devoted to eliminating waste, and fraud, and abuse at the Pentagon, which is so huge that it eclipses the entire budget of the 

anti-hunger program this hearing is examining? 

It is hard to believe that the constant attacks on the SNAP program reflect a focus on fiscal responsibility, when the majority’s tax 

policies are, of course, producing unprecedented and staggering 

budget deficits. 

According to Maya MacGuineas, of the Committee for Responsible Federal Budget, the $1.9 trillion cost of the tax cuts were disingenuously sold as the key to such massive growth that they 

would pay for themselves. But the proof is in the pudding, or in 

this case, the national debt. A realistic prediction of the tax cuts 

is they will provide a short-term boost, the sugar high that is flooding a strong economy which additional money creates, but that deficit finance boost won’t last, and it will leave us with a predictably 

large mountain of debt that comes with all the borrowing. 

It is irresponsible and incontrovertible to pass tax cuts to the 

super wealthy that we cannot afford, and then to put the whole 

spending spree on a credit card, which our children will pay for for 

the rest of their lives. 

Mr. Chairman, I am told this might be our last week in Washington for a bit, and I would hope that as members of the Oversight Committee we would be using our time more wisely than this. 

Instead of spreading rumors about SNAP fraud to justify draconian 

cuts to this necessary program, we should be looking into the real 


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waste, fraud, and abuse that costs the American people billions of 

dollars a year. 

I yield back. Thank you. 

Mr. PALMER. I thank the gentleman. I just say that if you think 

this is a waste of time you are welcome to not participate. 

You know, for the witnesses that I am about to introduce, despite 

the opening statements, this hearing is about fraud in the SNAP 

program. It is not about eliminating the SNAP program. It is not 

about work requirements. It is not about waste at the Pentagon. 

So with that, I am pleased to introduce our witnesses. Ms. Ann 

Coffey, Assistant Inspector General for Investigations at the U.S. 

Department of Agriculture, Office of Inspector General; Mr. Thomas Roth, the Director, Fraud Investigation and Recovery Unit, at 

the Maine Department of Health and Human Services; Mr. Tarren 

Bragdon, President, CEO of the Foundation for Government Accountability; and Dr. Craig Gunderson, Soybean Industry Endowed 

Professor in Agricultural Strategy, at the University of Illinois. 

Welcome to all you. Pursuant to committee rules, all witnesses 

will be sworn in before they testify. Please stand and raise your 

right hand. 

Do you solemnly swear or affirm the testimony you are about to 

give is the truth, and the whole truth, and nothing but the truth, 

so help you God? 

(A chorus of ayes.) 

Mr. PALMER. The record will reflect that the witnesses answered 

in the affirmative. Please be seated. 

In order to allow time for discussion, please limit your testimony 

to 5 minutes. Your entire written statement will be made part of 

the record. As a reminder, the clock in front of you shows you the 

remaining time. The light will turn yellow when you have 30 seconds left. And unlike traffic lights, you can speed up when it turns 

yellow. And red when your time is up. Please also remember to 

press the button to turn your microphone on before speaking. 

The chair now recognizes Ms. Coffey for her testimony. 

WITNESS STATEMENTS 

STATEMENT OF ANN COFFEY 

Good morning, Chairman Jordan, Chairman Palmer, Ranking 

Member Krishnamoorthi, Ranking Member Raskin, and members 

of the subcommittees. Thank you for the opportunity to testify 

about the Department of Agriculture Office of Inspector General’s 

work regarding the Supplemental Nutrition Assistance Program. 

SNAP is USDA’s largest program in terms of both dollars spent 

and numbers of recipients. In fiscal year 2017, recipients redeemed 

close to $63 billion in benefits. The latest available information 

shows that through June of 2018 more than 41 million people redeemed $46 billion in SNAP benefits. 

In providing oversight of SNAP, OIG employs a two-pronged approach, involving audits and criminal investigations. OIG audit 

staff conducts reviews of SNAP intended to improve FNS’s overall 

management controls for the program. Investigation staff conducts 

criminal investigations into alleged fraud perpetrated against the 

program. 


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We utilize specific law enforcement authorities, tools, and techniques to conduct these investigations. This work is intended to result in appropriate actions to resolve allegations, and to prevent 

and deter instances of illegal and fraudulent acts or misconduct. 

OIG devotes about 43 percent of its investigative resources to 

SNAP-related criminal investigations. Our main focus is on fraud 

committed by retailers, primarily because FNS is responsible for directly reimbursing retailers. 

States are responsible for ensuring that individual recipients are 

eligible to receive benefits and that they use those benefits appropriately. OIG allocates considerable resources to help FNS ensure 

the integrity of SNAP as part of our mission to promote integrity, 

efficiency, and effectiveness of USDA programs and operations. 

Our investigations yield tangible results and direct benefits to 

the government. In the past 5 years, we have completed 857 SNAP 

investigations that resulted in 2,302 indictments, and 2,335 convictions. During that time, our monetary results have totaled nearly 

half-a-billion dollars. 

Often, prosecuting a SNAP case is a collaborative effort between 

OIG and other agencies. By sharing information about SNAP recipients who illegally exchange their benefits for cash with relevant 

law enforcement agencies, we help states pursue prosecution or disqualify recipients from the program. 

OIG also works with federal, state, and local law enforcement 

agencies to investigate SNAP fraud due to violations and other 

laws—of other laws. OIG’s primary investigative jurisdiction pertains to violations of law involving USDA programs. 

When there are other violations of laws involving drugs or firearms we work jointly with the appropriate agency to pursue those 

other violations in addition to SNAP fraud. Through our various 

collaborative efforts, we work to identify and resolve potential 

vulnerabilities in the processes that allow bad actors to participate 

in SNAP. 

One of the most common abuses OIG investigates is the trafficking of benefits, which is essentially the illegal exchange of food 

assistance benefits for cash. In this scheme, retailers will pay recipients for their SNAP benefits. Recipients, of course, are then 

able to spend the cash however they like. 

The types of fraud we are seeing in SNAP are changing. In particular, with the use of electronic benefits, the fraud schemes are 

becoming more advanced, and relying upon information technology. 

To counteract these schemes, OIG works with FNS to develop ways 

of detecting and investigating retailers at high risk of committing 

various kinds of fraud. 

We also utilize OIG’s Office of Data Sciences to help identify 

anomalies that could not easily be identified, and provide new perspectives for examining data. These techniques ultimately assist us 

in making critical decisions in the allocation of investigative resources. When trafficking occurs unchecked, families do not receive 

nutritional assistance, and dishonest retailers profit at the expense 

of the American public. 

This concludes my statement. Again, I want to thank the subcommittees for the opportunity to testify today, and I welcome any 

questions you may have. 


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[Prepared statement of Ms. Coffey follows:] 


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Mr. PALMER. Thank you for your testimony. 

The chair recognizes Mr. Roth for his testimony. 

STATEMENT OF THOMAS ROTH 

Mr. ROTH. Chairman Palmer, Chairman Jordan, Ranking Members Raskin and Krishnamoorthi, and members of the committee, 

thank you for the privilege of testifying and representing the State 

of Maine. 

I am Tom Roth, the Director of the Fraud Investigation and Recovery Unit for the Maine Department of Health and Human Services. My job is to oversee the daily operations of the unit, a group 

of 35 dedicated employees. I enjoyed a 27-year law enforcement career before taking my current position. 

I am a certified Welfare fraud investigator, and in addition to supervising Maine’s fraud unit, I work an active caseload. So I see 

firsthand the fraud schemes in the SNAP program in Maine. 

We receive thousands of tips each year from citizens alleging 

fraud in the Welfare system. In addition to tips from the public, we 

receive information from eligibility workers, law enforcement, and 

other government agencies. Additionally, our overpayment specialists identify hundreds of intentional program violations committed 

by recipients. 

Our unit has two focuses. Investigators work cases for criminal 

prosecution. These are large theft cases occurring over many years. 

Our overpayment specialists examine administrative cases that are 

not prosecuted criminally, as well as conduct disqualification hearings. 

In 2017, we submitted more than 100 criminal cases for prosecu- tion, which totaled more than $1.4 million. In that same year, our 

overpayment specialists identified nearly 5,000 overpayments, totaling $4.1 million. 

One of our largest criminal cases to date was adjudicated this 

spring. This case involved a Welfare recipient who scammed the 

system for more than 10 years. This client lived comfortably with 

her husband, making more than a decent living by Maine standards. 

She failed to report that her husband lived in the household. She 

did not report his income, and she did not report her assets or income. Together, she and her husband had a six-figure income. Her 

case involved the theft of more than $229,000 from the system. She 

is currently in jail. 

Another massive case investigated by our unit, along with the 

OIG, involved a retail store in Portland, Maine. In this case, two 

brothers routinely took in customers’ electronic benefits transfer, or 

EBT cards, and provided benefit recipients with cash. The brothers 

would pocket a certain percentage of the money, with no food or 

groceries ever being purchased. 

Additionally, the brothers were involved in an illegal WIC benefits redemption scam. Their deceitful efforts took in more than $1.4 

million in SNAP and WIC benefits that never went to the intended 

recipients for the intended purpose. These brothers are both in jail. 

While these two cases are extremely large, we routinely work 

cases in which recipients provide false information and fraudulently receive tens of thousands of dollars. On a smaller scale, we 


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also investigate cases involving the misuse of EBT cards. These 

typically involve someone selling or trading their EBT cards for 

drugs. While individually these cases may only represent $100 or 

$200 in theft, they add up quickly, and show another mechanism 

used to commit Welfare fraud. 

Almost weekly we see a new scam involving EBT cards. One 

trick involves recipients returning purchased food items for cash. 

The cash is then used to purchase illegal drugs. Another has a 

scammer weighing beer on a scale at a self-checkout register, but 

entering in bananas as produce, so the user can purchase beer with 

their EBT card. Another scheme involves a recipient buying cases 

of bottled water, and then dumping the water out in the parking 

lot, and returning the empties for the 5-cent deposit per bottle. We 

get regular reports of the active use of a deceased person’s EBT 

card as well. These are all schemes we have seen in Maine. 

My point in providing you with a very brief overview of the type 

of fraud cases we work is to illustrate the fact that fraud exists, 

and when you look for it, you find it. I constantly asked what percentage of fraud is occurring out there. I can’t answer that question. What I can tell you is how many people we are discovering, 

and what that dollar amount represents. 

I also routinely get asked if our fraud efforts are paying for 

themselves. Does the operating cost of the unit justify the amount 

of money we are recovering? Again, that is hard to answer. I 

strongly believe the deterrent effects of our efforts is invaluable. 

We try to publicize our indictments and convictions so other see 

that if you commit Welfare fraud, you may get discovered, fined, 

and even jailed. I wish I could know how many people see those 

press releases and think twice before gaming the system. 

Maine utilizes a host of mechanisms to detect fraud. We have 

diligent investigators and overpayment specialists working cases. 

We rely heavily on tips and information from the public. We do 

data mining, and we look for fraudulent trends, and we scan data 

bases, looking for unreported income or assets. 

Maine is successful in finding fraud because we take an active 

role in looking for it. We publicize things, and we solicit tips from 

the public. 

Again, thank you for the opportunity to testify before you today, 

and I am happy to answer any questions you may have. 

[Prepared statement of Mr. Roth follows:] 


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Mr. PALMER. Thank you for your testimony. 

The Chair now recognizes Mr. Bragdon for his testimony. 

STATEMENT OF TARREN BRAGDON 

Mr. BRAGDON. Chairman, ranking member, and members of the 

committees, thank you. 

I am Tarren Bragdon, president and CEO of the Foundation for 

Government Accountability, a nonprofit research organization that 

primarily focuses on health and Welfare reform in the States, and 

in Washington, D.C. 

I have worked on this issue for about two decades, from when I 

was a Maine State legislator in the late 1990s, until now, where, 

at FDA, we are directly engaged in Welfare reform, including in 

SNAP, in more than 30 states. 

I am grateful for the committee’s work. It is imperative that we 

find solutions to fraud and program integrity to protect the program for the truly needy, who rely on it, and the taxpayers who 

fund it. Today, nearly 40 million are on food stamps, and almost 

half are able-bodied adults, and this is where the fraud happens. 

As a Jacksonville, Florida, detective told me, no elderly or disabled 

person tried selling their EBT card during his sting operation. 

Some states are leading the way in protecting the food stamp 

program from fraud. At least 13 states are moving forward with 

laws and initiatives specifically designed to root out fraud, but it 

should be mandatory for all. Close to 20 states have put into place 

asset limits to make sure that only those without sufficient resources are on the program. All should. Food stamps is a federal 

program, almost all funded by federal money, and Congress is right 

to provide this oversight to get rid of fraud. 

My written testimony lists ten areas with recommended solutions, but I will just highlight the three most significant. One, 

broad-based categorical eligibility, or BBCE; two, real verification; 

and three, real-time income reporting. 

BBCE is the income and asset eligibility loophole that was created through regulation, but it allows people with incomes nearly 

double the poverty limit to be on food stamps simply if they are eligible for a TANF-funded non-cash benefit. Could be a brochure. 

In addition, it effectively waives the asset test. First, this loophole allows rich people, even millionaires, to become food stamp eligible. For example, this Minnesota millionaire, who was on the program. Tennessee has an asset test, and doesn’t allow millionaires 

to be on food stamps. Why shouldn’t New Jersey? 

Second, this is now the most common way to get onto food 

stamps. Therefore, since it doesn’t matter what individual assets 

people have, states don’t have to check on individual’s assets for 

things like bank accounts, vehicles, homes, or other real property. 

And this makes it much easier to hide unreported income or other 

working members of the household. 

This loophole does not reduce errors, as promised, as GAO also 

concluded. This income and asset loophole should be curtailed, preserving food stamps for the truly needy who rely on it, those with 

low incomes and limited assets. 

Two, real verification of income assets and household members. 

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attestation, or believe what I say on the application. This is particularly a problem for people who report zero income, because 

these applications are fast-tracked. Since no income was reported, 

there is nothing to verify. More than a third of all applicants report 

zero income, and no one checks. 

For example, as you heard Mr. Roth reference, this Maine 

woman, who didn’t report her or her husband’s income. The fix is 

states should be required to use reliable up-to-date, often state 

data, to quickly verify income assets and household members. Some 

states are doing this now, with success, but it is optional. And the 

House Farm Bill addresses both of these loopholes. 

The last is so-called simplified reporting. This allows only large 

changes in individual’s incomes or households to be reported when 

it makes them totally ineligible for food stamps. Traditional reporting, or change reporting, is required for all changes to be reported 

to the agency within ten days. 

The idea was that this simplified reporting would have lower administrative costs, but in reality, admin costs for food stamps have 

doubled since 2001, and error rates are higher. States should use 

quarterly reporting, or change reporting, for able-bodied adults, in 

particular, and face-to-face interviews with able-bodied adults 

would also give states both another opportunity to spot fraud, but 

also to point recipients towards work and training to get out of poverty. 

So often we read stories about food stamp fraud. It is not just 

trafficking. It is happening in consistent, predictable, and large 

ways. Fraud is real, but it can be stopped, and Congress can lead 

the way. My testimony shows ten ways how, and I am happy to answer any questions. 

[Prepared statement of Mr. Bragdon follows:] 


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Mr. PALMER. I thank the gentleman for his testimony. 

The chair recognizes Dr. Gundersen for his testimony. 

STATEMENT OF DR. CRAIG GUNDERSEN 

Dr. GUNDERSEN. Thank you very much for this kind invitation to 

testify this morning. It is an honor. I am Craig Gundersen, the 

Soybean Industry Endowed Professor in Agricultural Strategy, in 

the Department of Agriculture and Consumer Economics, at the 

University of Illinois. 

In addition, I am on the Technical Advisory Group for Feed 

America, the lead researcher on Feed America’s Map the Meal Gap 

Project, a Round Table member of the Farm Foundation, a faculty 

affiliate of the Wilson Sheehan Lab for Economic Opportunities at 

the University of Notre Dame, and a research fellow at the Texas 

Hunger Initiative, at Baylor University. For over 20 years, my research has concentrated on the causes and consequences of food insecurity and on the evaluation of food assistance programs. 

For over 50 years, SNAP has been a shining example of a successful government program. Of greatest importance, it has asked 

to reduce food insecurity in the United States, and it does. Study 

after study has demonstrated this success. By reducing food insecurity, research has clearly demonstrated that this leads to improvements in health, and reductions in mortality and healthcare costs. 

In addition, SNAP leads directly to improvements over multiple 

other dimensions of well-being, including through reductions in 

poverty, improvements in health, reductions in anemia, et cetera, 

et cetera. 

SNAP’s success is achieved through the redemption of benefits at 

authorized food retailers, ranging from super-stores and large grocery stores, to military commissaries and farmers markets. This 

public-private partnership avoids the need to support a parallel 

government, food distribution bureaucracy, and helps retailers remain economically viable, especially in rural America. 

Given the profound success of SNAP, it is no surprise that this 

program has received such strong bipartisan support for decades. 

I could spend the full allocated time by covering in greater detail 

all the amazing things SNAP does, and has done, and will do for 

tens of millions struggling Americans, and in the process, reducing 

government expenditures in healthcare and other services. 

Instead, due to this hearing’s focus, I will address the unfortunate perception that SNAP is a program beset with fraud. Without 

a doubt, one could tell anecdotes about fraud in SNAP, and these 

should be met with anger, and forcefully prosecuted. But, of course, 

we shouldn’t make public policies based on anecdotes. Instead, we 

should carefully consider those safeguards in place to prevent 

fraud, and despite these, whether there is extensive evidence or 

fraud in SNAP. 

I stated in testimony before this committee in May of this year 

on a similar topic. There are two primary types of frauds that 

USDA has implemented safeguards against. 

The first is to prevent individuals from intentionally misrepresenting their household’s financial resources in an effort to qualify 

for SNAP, or to increase their benefit levels. Individuals who are 


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found guilty by their state of residence are banned from receiving 

SNAP for 12 months, and if this happens three times, for life. 

These safeguards have proven remarkably successful. In 2016, 

only about 1 percent of SNAP recipients were found to be in violation of these rules, and consequently, they were punished accordingly. 

The second type of fraud is trafficking on the part of SNAP recipients and retailers. This occurs when retailers give cash rather 

than food to SNAP recipients in exchange for benefits. To prevent 

this, the USDA closely monitors SNAP redemptions and alerts the 

relevant authorities when trafficking is suspected. The introduction 

of EBT made this process easier and more effective than when 

paper coupons were used. 

In addition, the USDA has established extensive partnerships 

with local law enforcement to address trafficking. Like with fraud, 

the vigilance of law enforcement and the USDA, and the threat of 

serious penalties, has led to extraordinarily low rates of trafficking. 

In 2016, about 1.5 percent of SNAP benefits are trafficked. 

The primary lesson we can learn from current regulations is (a) 

they work, and (b) we should be careful about making changes that 

would hinder the success of SNAP. With respect to changes, we 

should be aware of ideas promoted in the name of program integrity that would undermine effectiveness. 

For example, shorter recertification periods would impose burdens on working families, who would then need to take time off 

work to recertify. Or, for example, putting client’s pictures on EBT 

cards would hinder persons with disabilities, seniors, and those in 

multi-person households from using their benefits. In addition, 

checking photos in 

grocery lines puts an undue burden on cashiers, and lengthens 

checkout lines. 

SNAP works, in terms of improving the wellbeing of tens of millions of Americans in multip0le ways, and it does so while maintaining low rates of fraud and trafficking. I support efforts to continue current investments and the tools that USDA and states 

need to reduce fraud and trafficking. This is a critical important 

aspect of program oversight. 

To conclude, we should all be proud of the profound successes 

that SNAP has achieved over the past 50 years, and in the process, 

has become a model for other government services. It truly is a program that all of us can count on in our times of need. 

In some future hearing I hope to discuss with you all the exciting 

ways that SNAP can be made even better for Americans of all ages. 

In the meantime, I thank you all again for the opportunity to speak 

with all of you today, and I welcome any questions you all may 

have. 

[Prepared statement of Dr. Gunderson follows:] 


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Mr. PARKER. I thank the witnesses for their testimony. Before we 

get into questions, there was an issue raised about whether or not 

this committee is investigating waste at the Pentagon. And we did 

have a hearing on that, and I must admit that I forgot, and it is 

even more embarrassing, because I was in the chair for part of it. 

But we held that hearing March 21st, 2017, and identified $125 billion of potential savings at the Pentagon. 

And there is a report that the GAO put out this week on it that 

shows that the Department of Defense has missed their mark on 

what they agreed to do. And I think we are looking at doing a follow-up hearing on that in November, and we will encourage all the 

members of the committee to participate. 

With that, I now recognize Chairman Jordan for his questions. 

Mr. JORDAN. Mr. Roth—thank you, Mr. Chairman. So let me 

start with you, how much were we spending on—how much were 

we spending on the SNAP program, the food stamp program, 

today? 

Mr. ROTH. In the State of Maine? 

Mr. JORDAN. Overall, just nationally. Do you know? 

Mr. ROTH. I don’t know. My unit strictly deals with the —— 

Mr. JORDAN. Ms. Coffey, how much are we spending on the overall, do you know? 

Ms. COFFEY. The latest results were about $46 billion. Probably 

the end of the year, the average has been around $60 billion or so. 

Mr. JORDAN. $60 billion. How much were we spending about 10 

years ago, do you know? 

Ms. COFFEY. That, I don’t know. 

Mr. JORDAN. What are the numbers—how many recipients today 

in the food stamp program? 

Ms. COFFEY. Approximately 41 million, give or take, on average. 

Mr. JORDAN. Is that moving up? Is that trending up or trending 

down right now? 

Ms. COFFEY. It’s trending down right now. 

Mr. JORDAN. What kind of decline from last year? 

Ms. COFFEY. I don’t have that specific information in terms of 

what the—because it is an average. Folks go on the rolls, come off 

the rolls. I just don’t have that specific information. 

Mr. JORDAN. What percentage of the 39, 40 million individuals, 

and I assume some of those are, you know, counting children, what 

percentage of recipients, let’s just say it this way, have been found 

guilty of some kind of fraud? 

Ms. COFFEY. So that would be difficult for me to respond to, simply because we focus on the retailer side of the investigations, so 

our statistical data is really more towards retailers —— 

Mr. JORDAN. Who can answer that? Mr. Bragdon, can you answer 

that? What percentage of this 40 million population have been 

found guilty of fraud? 

Mr. BRAGDON. We don’t know that, Mr. Chairman. I think this 

points to the lack of reporting that this committee and this Congress has on just basic information about the program. 

Mr. JORDAN. Well, I read some number of 11 percent. Is that 

fair? I read it in our —— 


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Mr. BRAGDON. It depends on what you’re looking at. If you are 

looking at individuals, are they the payment error rates, or if you 

are looking at trafficking —— 

Mr. JORDAN. Let’s go to Mr. Roth then. Mr. Roth, in your state, 

what percentage of the food stamp recipients are found guilty of 

some kind of fraud? 

Mr. ROTH. Again, I can’t provide that number. I can only tell you 

how many people we catch in a certain calendar year for committing fraud. These are allegations we bring forth for prosecution. 

Mr. JORDAN. What percentage is that? 

Mr. ROTH. Again, I don’t have those numbers. We deal strictly 

with the investigation. That would be a question perhaps for our 

eligibility people. 

Mr. JORDAN. This might be important information for us to have 

if we are doing a hearing. I probably would kind of like to know 

how many have been found guilty of some kind of fraud, which 

would beg the next question, once they have been found guilty of 

some kind of fraud in the system, are they allowed to continue in 

the system, or are they kicked off? 

Mr. ROTH. In Maine, we have—the criminal prosecution goes 

through, and there is usually a penalty of that. We also then have 

a disqualification. If a person is found guilty, they are disqualified 

for a year. Second conviction, 2 years. Third time, lifetime. So we 

follow through with that in Maine. 

Mr. JORDAN. Someone could be found guilty in a court of fraud, 

defrauding the system, defrauding taxpayers, but they are allowed 

to get back on the program? 

Mr. ROTH. That is correct. 

Mr. JORDAN. Well, that seems kind of strange, too. 

Ms. Coffey? 

Ms. COFFEY. So that is a little bit different on the retailer side. 

If the retailer is found to have committed fraud and—retailer is 

found to have committed fraud and trafficking through EBT benefits, they are disqualified from the program. They are prosecuted 

and disqualified from the program. 

Mr. JORDAN. So would a work requirement help us cut down on 

the percentage of fraud, even though we don’t know what that is. 

Mr. Bragdon, do you think a work requirement would help us deal 

with fraud? 

Mr. BRAGDON. I think it would, because individuals would be 

working and getting themselves out of poverty and off the program. 

And so if you have fewer people on the program, because the need 

is less, then you would have less fraud. 

Mr. JORDAN. Yeah. Mr. Roth, do you think that is—a work requirement would help? You guys have one in your state, right? 

Mr. ROTH. Yes. Again, I can’t comment on that. We deal strictly 

with the investigations. That is something that our policy people 

work on. 

Mr. JORDAN. Well, the example you gave, you said there was 

someone who was deceased whose card was being used. It seems 

to be if that deceased person, prior to being deceased, was able-bodied, and they were working, that would prevent fraud in that situation at least, right? 


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Mr. ROTH. Yeah. And I can speak to the fact that, you know, a 

lot of these people that we investigate and prosecute are actually 

working. They are just not reporting that work to us. 

Mr. JORDAN. All right. Mr. Bragdon? 

Mr. BRAGDON. I can speak to, I live in Florida. The State of Florida had about half-a-million childless adults on food stamps, and 

restored its work requirement in January of 2016. Today, enrollment for those childless adults is down 94 percent as a result of 

that work requirement. 

Mr. JORDAN. Yeah. It seems to me it works. Seems commonsense, 

so it is certainly something we have to get done, and I wish the 

Farm Bill would pass with that requirement in it. With that, Mr. 

Chairman, I yield back. 

Mr. PALMER. I thank the gentleman. 

The chair now recognizes the ranking member, Mr. Raskin, for 

5 minutes for his questions. 

Mr. RASKIN. Thank you very much. 

I actually want to start by following up on Mr. Jordan’s line of 

questioning. I don’t know where the 11 percent number comes 

from, but if 10 or 11 percent of 40 million people were being convicted of fraud under the program, if my math is right, that would 

be more than 4 million people. 

Is there anything like that number of people being convicted of 

fraud under the program, Dr. Gundersen? 

Dr. GUNDERSEN. No, there is not. I mean there is oftentimes confusion between error rates, which can arise, because a case worker 

errs, or people making relatively minor mistakes in their statements about their income, and other things. That is one—and that 

may be where that 11 percent— but even that sounds high to me. 

If you look at cases of fraud, as defined by the USDA, as defined 

by them, it is about 1 percent. 

Mr. RASKIN. Okay. Ms. Coffey, let me just come to you. Did I 

hear you just say that the most common form of fraud is retailers 

giving people money instead of food, and then they get some kind 

of kickback, or that they keep a percentage of it? Is that the most 

common form of fraud we are finding? 

Ms. COFFEY. That is correct. 

Mr. RASKIN. Okay. And do we have any tabulation of how many 

cases of that are taking place? 

Ms. COFFEY. I can only speak to what we have reported on. We 

had about 897 over the last 5 years of retailer fraud cases. 

Mr. RASKIN. Uh-huh. So the most common form, there is around 

900 cases over the last 5 years. So that is something less than 200 

cases per year. 

Ms. COFFEY. On average. 

Mr. RASKIN. Is that right? So what happens to the retailers that 

are doing this? Because obviously it is a rip-off of the system, and 

it shouldn’t be taking place. 

Ms. COFFEY. So in those instances where we have identified that 

the retailer has engaged in food stamp fraud, trafficking of benefits, they are prosecuted. And when they are prosecuted they receive imprisonment potentially, restitution. There are a number of 

sanctions that are issued by the court when that occurs. And then 


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ultimately, they are disqualified from participating in the program 

by FNS. 

Mr. RASKIN. But their store, in other words, no longer could participate. 

Ms. COFFEY. That is correct. 

Mr. RASKIN. I see. Okay. Can you just describe—give us a 

prototypical case of how this would—how this fraud takes place? 

Ms. COFFEY. So normally we receive allegations that come in 

from a number of sources. We also have an OIG hotline. We get 

referrals from law enforcement officials, other agencies, the public 

telling us of potential fraud. We will initiate an investigation of a 

particular retailer. Obviously, data analytics plays a significant 

role in us being able to identify where there is potential fraud. 

We investigate. We will do a number of investigative techniques, 

which I probably won’t get into here. 

Mr. RASKIN. Mm-hmm. But basically, are they printing it out as 

though somebody had just bought groceries, but in reality, they are 

giving them money at a discount, so they can keep money, is that 

—— 

Ms. COFFEY. Basically, the person will walk into the store, the 

card will be swiped, cash will be given to that recipient, and the 

full amount of the swipe of the card is redeemed back from the government. 

Mr. RASKIN. Okay. 

Ms. COFFEY. So if they do a $100 swipe, the person may get $50. The benefit from the government is $100 to the retailer. 

Mr. RASKIN. Gotcha. 

Dr. Gundersen, don’t we have work requirements now? 

Dr. GUNDERSEN. So we do have work requirements now across 

different dimensions. But if I may, though, I do want to say there 

is this perception that SNAP discourages work. That perception is 

false, is because for each additional dollar you earn with SNAP you 

only lose—I am sorry. With each additional dollar you earn in 

earnings, you only lose 24 cents in benefits. So people may not be 

working for a number of different reasons, but the existence of 

SNAP, as study, after study, after study has shown, does not discourage work. 

So thinking about work requirements in that context of SNAP 

begs a question about whether or not it really is a problem. But 

I will also say that there are work requirements in many states 

with respect to able-bodied adults without dependents. 

Mr. RASKIN. I am reading that 93 percent of SNAP spending goes 

directly into the purchase of food. But if we added more administrative requirements, then that is going to divert money away from 

food, and put it into more bureaucracy. Can you describe—I mean 

is that intuition correct, that if we impose more massive bureaucracy on the process, then we are diverting money from getting food 

to people. 

Dr. GUNDERSEN. Right. So any bureaucratic hurdles that are put 

in place is, as with any bureaucratic hurdles, will discourage people 

from participating in the program. And research has shown that 

those who would be most discouraged by these bureaucratic hurdles are those who are most in need, and will be least likely to be 

able to get over these bureaucratic hurdles. 


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Mr. RASKIN. Why is that? 

Dr. GUNDERSEN. Oftentimes people who with very low education 

levels, or chaotic homes, or other issues, or their children are having difficulties, or people with disabilities, mental health challenges 

may have difficulty dealing with this. So as you make the bureaucratic hurdles higher, and higher, and higher for individuals, you 

put more and more people into hunger and food insecurity. And 

moreover, it is the most vulnerable in our society who will be hurt 

by this. 

Mr. RASKIN. My time is up. I yield back, Mr. Chairman. Thank 

you. 

Mr. PALMER. I thank the gentleman. The chair recognizes the 

vice-chairman of the Intergovernmental Affairs Subcommittee, Mr. 

Grothman, for 5 minutes. 

Mr. GROTHMAN. Thank you. 

I will ask any one of you. People, of course, aren’t supposed to 

sell their SNAP benefits, but we all know they do. We have people 

from four different places around the country here, I guess, three 

different places around the country. Could you all tell me how 

much SNAP benefits are sold for in your area? We will start with 

Mr. Gundersen, and work our way across. How much in the Champaign-Urbana area do you get when you sell your SNAP —— 

Dr. GUNDERSEN. For various reasons there is a lot of variability 

across the country. What we see is generally —— 

Mr. GROTHMAN. There’s generally no variability, but go ahead. 

Dr. GUNDERSEN. It is generally about 50 cents on the dollar is 

approximately what they are being sold for. 

Mr. GROTHMAN. Okay. Mr. Bragdon? 

Mr. BRAGDON. The easiest way to find this out is just going on 

Craigslist, because people have ads to sell them, and it is about 50 

cents on the dollar. But you can look up every location. 

Mr. GROTHMAN. In Maine, what do they go for? 

Mr. ROTH. We have seen 50 cents on the dollar. And the market 

I talked about in Portland, that was about 20 cents on the dollar, 

so it varies. But generally, 50 cents on the dollar is a good benchmark. Yeah. 

Ms. COFFEY. Yes. Generally, what we see is 50 cents —— 

Mr. GROTHMAN. Yeah. 

Ms. COFFEY.—on the dollar. 

Mr. GROTHMAN. Everywhere I ask in Wisconsin, they are selling 

them 50 cents on the dollar. 

Can we draw any conclusions from the fact that the necessity of 

some of these benefits are whether people are getting them that 

shouldn’t need them, that you are selling food, in essence, for 50 

cents on the dollar? Mr. Bragdon, can we draw any conclusions 

from that? 

Mr. BRAGDON. I think if somebody is selling their benefits for 

cash on the dollar, there is a question of whether or not they need 

the benefits for food, or whether they are prioritizing getting cash 

for some other purpose over buying food for themselves and their 

family. 

Mr. GROTHMAN. Okay. 

Next question. This is for Dr. Gundersen. You said that SNAP 

was not discouraging people from work, because it only took 24 


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cents off of every additional dollar you have. But I want to point 

out there are a lot of programs out of there. We have an earned 

income tax credit that disappears the harder you work. 

We have low-income housing. The harder you work, the more 

rent you have to pay. Daycare. Just taxes itself. You know, we have 

the Social Security taxes right from the top. You know, you are 

taking money away. 

And when you add them up, don’t you easily get, or can you easily get to situations in which for every, you know, work expenses, 

too, you are taking 70, 80 cents for every additional dollar you 

work. Don’t you think that discourages people from working? 

Dr. GUNDERSEN. So I think it’s worthwhile in this context to separate out the effect of SNAP on work versus the effect of other programs on work. You know, as an economist, this is what we do all 

the time, is to figure out the tax rates on various things, and 

whether or not it impedes work. 

SNAP itself does not discourage work, as I mentioned —— 

Mr. GROTHMAN. How about all of them together? 

Dr. GUNDERSEN. That is another question. I can’t speak exactly, 

but I do—you know, at certain levels, there can be very high tax 

rates, because of the way other programs are being run. So I guess 

I would say is that if that is the case, and there are some programs 

which encourage work, whether it be EITC. There are some programs that don’t discourage work, like SNAP. There are other programs that may, especially with the so-called cliff, that they may 

discourage work. But SNAP —— 

Mr. GROTHMAN. I’ll point at EITC, that is one you said doesn’t 

discourage work. That is phased out, depending on how many people in the family. And it most definitely discourages work. 

I would strongly encourage you, Dr. Gundersen, when you get 

back to Champaign-Urbana, to talk to people who hire people in 

the $9- to $14-an-hour range, and you will have no problem finding 

people who are turning down raises, that sort of thing, because it 

discourages work. 

But I will come back to another question. And my good buddy, 

Congressman Jordan, kind of alluded to this already. We are right 

now in a situation in which we are as close to full unemployment 

as I have seen in my lifetime. Okay? Nevertheless, the number of 

people on SNAP benefits is up 50 percent. It is gone down lately, 

but it is up 50 percent over where it was 10 years ago. 

Now normally one would say if we have the strongest economy 

I have seen in my lifetime, the need for SNAP ought to be the lowest. Could anybody give an explanation as to how there could be 

50 percent more people on SNAP than, say, 12 years ago, than 

now? Sure, Mr. Bragdon. 

Mr. BRAGDON. I think if you look at some of these loopholes identified in my testimony, where you essentially widen the front door, 

and don’t check on individuals’ eligibility, you are going to have a 

lot of people enter, and then stay on the program for a long period 

of time. Because once you are in, there is very little checking on 

an ongoing basis. 

You also have more than a third of individuals who report zero 

income not being verified. They are fast-tracked. I think the tragedy is we want people to get out of poverty, not make it simple for 


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them to stay in poverty. And that is what could happen with a 

strong work requirement. 

Mr. GROTHMAN. I am always interested in you, Mr. Gundersen. 

Dr. GUNDERSEN. Okay. So I mean there has been —— 

Mr. GROTHMAN. Why is it —— 

Dr. GUNDERSEN. There is extensive research that has been done 

by many economists, including myself, on just this topic, as to why 

the SNAP caseloads rose. The main thing is that while—I should 

also note that they have been declining the past 2 years. The 

strong economic growth of the past 2 years has really led to sharp 

declines in SNAP, the number of SNAP participants. 

We have to remember, though, is that the Great Recession was 

the largest recession we have had perhaps since the Great Depression. Substantial increases then. But the benefits of the end of the 

recession didn’t accrue to people for a long time, and hence, caseloads remained high. 

However, if the current economic expansion continues, in 2 years 

we will find caseloads roughly what they were 12 years ago. I have 

no doubt about that. Study, after study, after study has shown this. 

Mr. GROTHMAN. Okay. I guess my time is up, but thank you for 

indulging me with an extra 30 seconds. 

Mr. PALMER. I thank the gentleman for his questions. The chair 

recognizes Mr. Krishnamoorthi for 5 minutes for his questions. 

Mr. KRISHNAMOORTHI. Thank you for allowing me to make some 

remarks and additional questions. First of all, Ms. Coffey, can you 

tell us what the decline has been in the SNAP rolls over the last 

couple of years? 

Ms. COFFEY. I don’t have that specific information, but I know, 

just from our investigative perspective, that we have seen a decrease in our investigative resources. As the population of individuals who are participating in SNAP increased over the last few 

years, we saw an increase in our investigative resources working 

those investigations, and we are starting to see a downward trend 

at this time in the amount of percentage of work that we have relative to SNAP. 

Mr. KRISHNAMOORTHI. Okay. Dr. Gundersen, can you comment 

on that? You started talking about it, but what has been the decline in the rolls in the last 2 years? 

Dr. GUNDERSEN. I mean over the past 2 years I believe they have 

declined, by total expenditures, maybe 5 to 10 percent, and the 

number of people on the caseload has declined by roughly—by 

about approximately that same number. So over the past few years 

there has been these substantial declines, and we—we know that 

it is going to go down again. 

The other thing is we need to be careful about the 50 percent of 

what it—increase. I mean there has also been population growth 

over this time period, so what the appropriate comparison would 

be, would be the number of participants amongst eligible households in comparison at two different time periods. That would be 

the more appropriate comparison. 

Mr. KRISHNAMOORTHI. And do you know the numbers for that? 

What is that comparison? 

Dr. GUNDERSEN. I mean the proportion out of people who are eligible for SNAP has remained relatively steady over this time peVerDate Nov 24 2008 12:09 Nov 02, 2018 Jkt 000000 PO 00000 Frm 00054 Fmt 6633 Sfmt 6633 H:\32575.TXT APRIL

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riod. There hasn’t been major increases in the proportion of eligible 

households participating. What has mainly driven the increase is 

there is a lot more people who are eligible for the program for various reasons, and that is what has been driving the—we had a 

Great Recession, and then for a long time the situation improved 

for millions of Americans. 

Mr. KRISHNAMOORTHI. Ms. Coffey, what is the current work requirement for SNAP? 

Ms. COFFEY. That is not something that I am able to comment 

on, in terms of—we handle the investigation side of the house. My 

colleagues and I have done work in that area, but we do not address that. For our purposes, we focus specifically on whether or 

not an individual is trafficking their benefits, or other fraud. 

Mr. KRISHNAMOORTHI. Dr. Gundersen, isn’t there a work requirement today for SNAP recipients, even before any additional work 

requirements are imposed, and what is it? 

Dr. GUNDERSEN. So I mean currently it is that for able-bodied 

adults without dependents, between the ages of 18 and 50, if they 

are not working for any three-month time period within 36 months, 

or not in employment, or training, or something else, are considered to be ineligible for SNAP. So there are work requirements basically in the entire country. Of course, state and local areas can 

get waivers for this, but there are work requirements already being 

imposed. 

Mr. KRISHNAMOORTHI. Okay. So if there was any supposition 

that there aren’t requirements, that is, in fact, untrue. There are 

work requirements today, and the fraud rate I think you said could 

be as low as 1 percent. And what do you have to back up that percentage? 

Dr. GUNDERSEN. So two things about that. First, I really want 

to dispel this notion that work requirements are in any way connected to fraud. Those are two completely different issues, and I 

think we—if we want to have a discussion about work requirements, fantastic. But it is very different from what is going on with 

fraud. Those are two—and that in terms of the information about 

the extent of fraud in terms of the percentages is, I just got that 

from previous testimony, where it is about, you know, about—up 

to 1.5 percent of cases of fraud. As fraud is appropriately defined 

as people misusing their benefits, it is about 1.5 percent. 

Mr. KRISHNAMOORTHI. Okay. So if we currently have work requirements, and the fraud rate may be as low as 1.5 percent, then, 

you know, Dr. Gundersen, can you give us an explanation of what 

you believe to be motivating the desire to impose further work requirements in SNAP? 

Dr. GUNDERSEN. I don’t know. I don’t know why we want further—leaving aside the issue of work requirements, even if we impose work requirements, that is not going to make any difference 

in terms of fraud rates at all. So they should be two completely 

—— 

Mr. KRISHNAMOORTHI. Yeah. Why do you think they are separate 

issues? 

Dr. GUNDERSEN. Why do I think they are separate issues? 

Mr. KRISHNAMOORTHI. Yeah. 


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Dr. GUNDERSEN. Because there is no evidence that imposing or 

not imposing work requirements is at all connected to the extent 

of fraud. I haven’t seen any evidence that those that would have 

to face work requirements are any more or less likely to commit 

fraud. In other words, I don’t know where this is coming from. It 

is baffling to me. 

Mr. KRISHNAMOORTHI. Okay. How about this? What would you 

do to further limit fraud in the system? We don’t want any fraud 

in SNAP, whatsoever. So what would you do? 

Mr. KRISHNAMOORTHI. Keep on going along the path we are 

going on. It is all great that everybody has talked about some of 

the neat things they are doing. Let’s continue along those paths. 

We should also note, SNAP is a model. We should be having 

these discussions about how great SNAP is, and maybe some other 

programs could learn from SNAP, including the IRS, or something. 

Yeah. 

Mr. KRISHNAMOORTHI. Okay. But you said keep doing what we 

are doing. What are you talking about? What are you referring to? 

Dr. GUNDERSEN. Well, some of the efforts—for example, one of 

the advantages, now that we are using EBT, is it is more easy to 

track when you see anomalies in stores, in terms of their redemptions, which may be an example of trafficking. Or with more and 

more information available online regarding people’s salaries, regarding people’s housing costs in an area is that that is what is 

going on. 

I should also note, one thing I want to come back to is, when people at zero income, that means they have zero net income. It does 

not mean they have zero gross income, necessarily, and it is really 

important to make that distinction. But there is many ways to get 

information about people. 

Mr. KRISHNAMOORTHI. Thank you. Thank you, Mr. Chair. 

Mr. PALMER. I thank the gentleman for his questions. 

The chair now recognizes the gentleman from Michigan, Mr. 

Mitchell, for his questions for 5 minutes. 

Mr. MITCHELL. Thank you, Mr. Chairman. 

It may be tough to get it all in 5 minutes, so help me here, Mr. 

Bragdon, and if you can be brief. 

How many states last year had a waiver from the work requirement? 

Mr. BRAGDON. It is important to look at it at the county level. 

And about 37 —— 

Mr. MITCHELL. Right. 

Mr. BRAGDON.—percent of Americans are—jobless adults on food 

stamps are waived from any work requirement. Almost the entire 

State of Illinois, where the Doctor is from, almost the entire State 

of California. So you have wide swaths where there is low unemployment, but the state chooses to waive —— 

Mr. MITCHELL. Michigan had a state-wide waiver for —— 

Mr. BRAGDON. They did, but they are restoring it now. 

Mr. MITCHELL. They are just restoring it now. 

Dr. Gundersen, we are going to have fun, because I went to 

school in economics and public policy. Michigan State. Not Illinois. 

I would agree with you that work requirements and fraud really 

don’t have much of a relationship. So we have something that we 


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agree on. But let’s start with it is a cost to the taxpayer, whether 

the people aren’t working, and could be, and should be, or where 

there is fraud, it is still a cost to the taxpayer, which often matters 

here. 

You need to explain to me why it is that you don’t believe work 

requirements will have an impact, when, in fact, the unemployment rate in Michigan, or nationwide, let’s take that, is 3.9 percent, and Michigan is about 4.2. 

The highest percentage of people not participating in the labor 

force are able-bodied men, 25 to 45, 50. By the way, before we get 

to stereotypes, mostly Caucasian males. So explain to me how it is 

that a work requirement saying if you can work, you should work, 

if you need skills, you should get training, why that isn’t something 

that makes sense to you as an economist. 

Dr. GUNDERSEN. So I say this for a couple reasons. First of all, 

I want to get back to this thing. You know, we are all taxpayers 

here. We have to remember that SNAP recipients also are taxpayers. 

Mr. MITCHELL. Dr. Gundersen, I have 5 minutes. 

Dr. GUNDERSEN. Okay. 

Mr. MITCHELL. I asked you a question. I would appreciate it if 

you answer it. 

Dr. GUNDERSEN. No. No. I was just clarifying this thing about 

the taxpayers. 

So why shouldn’t we have this is that work requirements are 

that, the ones that we have in place now is, that, for whatever reason, some people are or are not working. The point I want to make 

about this, though, is that if I truly believe that SNAP was discouraging people from working —— 

Mr. MITCHELL. The question isn’t whether they are discouraging. 

That is the wrong assessment to make. The question is whether 

they are—there is an expectation to work, and there is an incentive 

to work, not whether they are being discouraged. 

Our systems, our support systems—and Mr. Krishnamoorthi is 

leaving, but I know we have talked about it, is that we should not 

say are we doing something to discourage people from working. We 

should say it is an expectation to work. This program is not intended as a lifestyle for long-term. 

Dr. GUNDERSEN. Well, if I could—it is not a lifestyle for the longterm. The average length of time on SNAP is 9 months. So in other 

words, most people cycle on and off the program. 

Mr. MITCHELL. Multiple times. 

Dr. GUNDERSEN. Right. That is true. Off work, on to work, and 

these are the things that—so rather or not work— and we still— 

we already have work requirements. And I am not making the argument we should get —— 

Mr. MITCHELL. Well, we have work requirements, but as Mr. 

Bragdon noted, 37 percent of the country last year weren’t covered 

by work requirements for one reason or not, despite historically low 

unemployment rates. 

Second, the work requirements we have don’t apply to a great 

number of people, many of which would fit in the category you expect to work, able-bodied working adults that are young males. So 

while we have them, they are not working. 


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Dr. GUNDERSEN. Right. You know, 37 percent of counties is, we 

would have to look carefully at each of those counties. If you look 

at Illinois —— 

Mr. MITCHELL. I think he said 37 percent of the population. 

Dr. GUNDERSEN. Thirty-seven percent of the population. So it is 

worthwhile to have a discussion why is a particular county not getting—why is a particular county getting a waiver, and other counties not. That is definitely something we should be pursuing. 

Mr. MITCHELL. Well, then let us not say, as we testify, or answer 

questions, that we have work requirements, so they don’t matter, 

because the reality is last year 37 percent of the population on 

SNAP were not affected by work requirements under the current 

law. That is fact. 

Dr. GUNDERSEN. I am not denying that. No. 

Mr. MITCHELL. And it matters. Let me change topics, because I 

have one minute left, so we will let—if I can. 

We make a distinction, which I think is artificial, between the 

error rate and fraud. The question is, I guess, what do we do with 

states, Ms. Coffey, that have some extraordinary error rates? What 

is the penalty for states? Because ultimately, it still costs the taxpayers. Whether it is fraud or whether it is errors, the reality is 

it is money out of our pocket that should not be. 

Ms. COFFEY. In terms of what the states—what the penalty is for 

the states, that is not something for investigations that we necessarily focus on. That is something that my audit colleagues have 

had—work that has been completed relative to the error rates, with 

respect to SNAP. And the state —— 

Mr. MITCHELL. Let me stop you a second. There are some states, 

I’ve noted, that have some significant error rates. They are not 

minor. But we don’t have any process by which to take action with 

the state in terms of a significant percentage and ongoing error 

rates? It is, ‘‘Gee, we hope you do better?’’ 

Ms. COFFEY. I don’t believe that is the case. I just can’t articulate 

what that process is at this time. 

Mr. MITCHELL. Could you ask back at your agency to get the report to the committee —— 

Ms. COFFEY. Absolutely. 

Mr. MITCHELL.—what the process is for dealing with states that 

fail to, under the current regulations even, properly mange their 

program and error rates? Because, in fact, there should be, in some 

manner, sanctions upon states that fail to manage their program, 

because it is other people’s money. That is not acceptable outcome. 

Ms. COFFEY. Absolutely, I will do that, sir. 

Mr. MITCHELL. Thank you for your consideration, Mr. Chair. I 

yield back. 

Mr. PALMER. I thank the gentleman for his questions. The chair 

now recognizes the gentlewoman from New Jersey, Ms. Watson 

Coleman, for her questions. 

Ms. WATSON COLEMAN. Thank you, Mr. Chairman. I take an opportunity to contextualize our being here today. 

I do have some information that might be helpful. In 2018, fiscal 

year 2018, approximately 40,834 people were on SNAP, representing 20,000-plus thousand—million—I’m sorry—million, let us 

talk about million, families, at a total cost of $46,253,741,494, 


KING-6430 with DISTILLER
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$125.88 per person, represents, assuming three meals a day, about 

$1.50 an hour. Just want to contextualize this, because we are having such a long hearing on this. 

Because at the very same time this—my republican colleagues in 

this Administration offered an unprecedented tax cut bill that represented 83 percent of the benefit, representing more than $84 billion of money going to less than 1 percent of the people in this 

country. And now we are proposing, we understand, even an additional tax incentive to ensure that those very same people get 

$105,000 more each year. I just want to contextualize that, because 

I think there is an absurdity in this undertaking that we have here 

today. 

In May, there was a report that was done and submitted to the 

U.N. by an American, actually, who said that the United States 

has the highest rate of youth poverty, infant mortality, incarceration, income equality, obesity among all countries in the developed 

world, and as well as 40 million people living in poverty. 

So there is no question about whether or not individuals who are 

on SNAP can work, do work. The issue is that if they get a chance 

to work, they might have to work six jobs in order to make enough 

money not to qualify for SNAP. They are still in poverty. 

And it says that the policies here, this is Mr. Austin’s findings, 

over the past year seem deliberately designed to remove basic protections from the poorest, and punish those who are not in employment, and make even basic healthcare into a privilege, as opposed 

to a right. It just seems to see where our priorities are, they certainly aren’t for the everyday working families, hard-working families, and poor families, and disabled families. They are for the very, 

very wealthy. And the hypocrisy of that is overstated in this hearing today. 

Not only do we have how badly we are treating Americans, but 

we have found that over the weekend the Department of Homeland 

Security announced a proposed draft regulation that targets poor 

immigrants seeking a better life. This rule will deny green cards 

to immigrants trying to provide food for their families with SNAP 

assistance. That is about $1.50-some-cents a meal, given the possibilities of having three meals a day per person. 

My republican colleagues would like to focus in this hearing a 

flaw within the SNAP program. It is imperative that we discuss 

the implications of the proposed rule. 

I want to thank you for your testimony, because you are talking 

about a whole range of issues, from the fraud that takes place from 

the individual perspective, the fraud that takes place from the provider’s perspective, the store, and the errors that are made in the 

system. And this all adds up to less money then is given to the 

very, very, very wealthy in this country. 

But the proposed rule as it relates to immigration—our immigration system to benefit the rich, crowding out so many who have 

long contributed to America’s vivity. This proposed rule would force 

families to make impossible choices, the choice between staying together in the country they already call home, and providing food, 

healthcare, housing, and other necessities to their loved ones. Families on Medicaid, SNAP, Medicare, Part D, or public housing families will face new hurdles to getting permanent residency. 


KING-6430 with DISTILLER
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So let us put this hearing in context. Let us understand that my 

republican colleagues and this republican administration doesn’t 

give a good damn about those who are the neediest in our country, 

the 90 percent of the hard-working people that try to make the 

ends work, those who can’t work because of disabilities, or for other 

reasons, those who need to be able to provide food for their children. They don’t give a damn about them. 

They give a damn about the 1 percent, the very, very, very, very 

hungry, greedy wealthy. They are not asked to create not one damn 

job, or not go to work for not one damn day. They just need to be 

rich, and if they are rich, they will be enfranchised even more by 

this republican-controlled Congress, and this administration. 

This hearing should never even be taking place today, with all 

the priorities that we have at stake right now, that fall under the 

jurisdiction of the Oversight Committee. Give me a break. America, 

pay attention. 

I yield back. 

Mr. PALMER. The chair recognizes the gentleman from North 

Carolina, Mr. Walker, for his questions. 

Mr. WALKER. Thank you, Mr. Chairman. I think that last, I don’t 

know what it was, but I think it was damn preposterous. 

Let’s look at the facts here. Mr. Tarren, I am going to come to 

you in just a second. 

In North Carolina, 2016, we had 2,000 people that were recipient 

or disqualified, because of fraud, and we lost over $4 million. So I 

want to address that a little bit, but I want—I actually want to 

start with Dr. Gundersen, kind of clear a couple things up here. 

With Representative Mr. Mitchell, in your testimony there, I believe you said that within 2 years these numbers would go down 

for people that were on the SNAP program. Is that what you are 

saying? 

Dr. GUNDERSEN. I am saying given current trajectories, if the 

economy stays strong, and the current trajectories that we are seeing with this, as I expect, SNAP caseload will continue to decline 

over the next 2 years. All the evidence regarding the connection between a strong economy and SNAP caseloads will continue to hold, 

in my opinion. 

Mr. WALKER. So you are saying due to the strength of the economy, if it stays as strong as it is right now. 

Dr. GUNDERSEN. Right. A strong economy is critical. Research 

has clearly demonstrated that the main driver of SNAP caseloads 

is the economic health. 

Mr. WALKER. Yeah. I am glad to hopefully continue the policies 

that keep that economy strong with our team here. The problem is, 

is that we have seen since 2001 the increases of SNAP recipient 

programs have gone from 17 million to right at 42 million. That 

should be concerning. And listen, we are not coming at this from 

a position of judgment. My question to you is: How do you measure 

the success of a program? 

Dr. GUNDERSEN. So I measure a—here is how we, as economists, 

measure the success of a program, is we compare participants with 

eligible non-participants. Are people better off over multiple different dimensions if they get SNAP, as opposed to if they are eligible and not receiving SNAP. 


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And as I mentioned in my testimony, study after study has demonstrated how successful SNAP is at achieving that goal. That is 

how we define the success of SNAP. And it is one of the most wellresearched programs out there in literature. 

The other thing I should note is that I agree. I think it is a problem that more people are receiving SNAP. It is bad that our economy is not—that not everybody is able to have a high enough income that they can’t be on the program. I agree. But I also agree 

that I am glad that SNAP is there, given all the proven benefits 

of it, and let’s hope with the continued economic strength those 

caseloads will fall. 

Mr. WALKER. My concern is that your perception as well as many 

in the federal government is that we measure the success of a program by how many people we are adding to it, as opposed to how 

many people we are transitioning off. Isn’t that the ultimate goal 

in all of this? 

Dr. GUNDERSEN. The ultimate goal in all of this in America is 

that nobody would need SNAP. I am in complete agreement. I am 

not in Washington, D.C. I am at University of Illinois. 

Mr. WALKER. I see the sign. 

Dr. GUNDERSEN. I do not define the success of a program as to 

how many people are on it. That is not how —— 

Mr. WALKER. But if we are unwilling to make the changes necessary to transition people off, specifically able-bodied adults, and 

others, despite the testimony that you just heard, nobody is going 

after people with disabilities, or anything of that nature, gross exaggerations again. 

Mr. Bragdon, the pilot results from five states show how successful a state-to-state data-sharing program. I know you have done 

some research on this, how it can be successfully reducing improper payments, and saving states and federal taxpayers hundreds of millions of dollars. Based on these pilot results and other 

available data, do you consider implementing a program such as 

the NAC, or the National Accuracy Clearinghouse, a priority, in 

order to reduce recipient SNAP frauds, specifically dual participation? 

Mr. BRAGDON. Yes. And USDA estimated that it would save a 

billion dollars. I think this is why it was a priority in the House 

Farm Bill. 

Mr. WALKER. Okay. What do you think the drawbacks would be, 

if any, to implementing this program on a nationwide scale? 

Mr. BRAGDON. I don’t think there are drawbacks. I think it would 

require states to change how they do business, but not impose an 

administrative burden. We haven’t seen that from the pilot states, 

so it has been more difficult to do then. 

Mr. WALKER. Mr. Roth, I do have a question for you. Earlier this 

year I introduced the SNAP Abuse and Fraud Prevention Act of 

2018 that would require the USDA to implement the National Accuracy Clearinghouse on a nationwide basis to limit interstate dual 

participation in SNAP. Is dual participation in SNAP a problem in 

Maine? 

Mr. ROTH. It is. It is not looked at through my unit. We just handle the criminal investigations and overpayments, but there is a 

unit within the state that does that. They compare out-of-state 


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transaction use, and they do catch those people, so to speak, quite 

regularly. 

Mr. WALKER. And the same question to you, would the drawbacks to implementing this program, do you anticipate any? 

Mr. ROTH. I am not a policy person, so I couldn’t comment on 

that, but I see it as, you know, certainly something that we would 

be interested from an investigative standpoint. 

Mr. WALKER. Thank you, Mr. Chairman. I yield back. 

Mr. PALMER. I thank the gentleman. 

The chair now recognizes the gentleman from Pennsylvania, Mr. 

Cartwright, for his questions for 5 minutes. 

Mr. CARTWRIGHT. And I thank you, Chairman Palmer. 

Well, I want to start with you, Dr. Gundersen. I wrote down 

what I thought you said. This is a hearing about SNAP fraud, 

right? That is the title of the hearing, SNAP Fraud, Supplemental 

Nutrition Assistance Program Fraud. And what I thought you said, 

Dr. Gunderson, is something that I strongly agree with, that fraud 

should be met with anger, and forcefully prosecuted. Did you say 

that? 

Dr. GUNDERSEN. Yes, I did. 

Mr. WALKER. Mr. Bragdon, do you agree with that? 

Mr. BRAGDON. I do. 

Mr. WALKER. All right. We are off to a good start. 

So what I found was that there was recently an article in 

Mathematica Policy Research, actually from this month, September 

6, 2018, that said that, ‘‘New work requirements on SNAP food recipients would cause 2 million participating households to lose 

their eligibility for SNAP. Among those households, 34 percent include senior citizens.’’ 

And Dr. Gundersen, what would putting senior citizens to work 

do to combat SNAP fraud? 

Dr. GUNDERSEN. As I indicated earlier, is there really is no connection between fraud —— 

Mr. WALKER. So nothing. 

Dr. GUNDERSEN.—and work requirements. So —— 

Mr. WALKER. So nothing. 

Dr. GUNDERSEN.—it is an ancillary issue. And I think —— 

Mr. WALKER. Nothing, right? 

Dr. GUNDERSEN. It would have no impact on fraud. 

Mr. WALKER. Okay. And then it says, ‘‘Twenty-three percent 

would include children.’’ What would putting children to work do 

to combat SNAP fraud,’’ Dr. Gundersen? 

Dr. GUNDERSEN. It would have no impact on SNAP fraud. 

Mr. WALKER. Nothing. And it says, ‘‘Eleven percent would include a person with a disability.’’ Dr. Gundersen, what would putting people with disabilities to work do to combat SNAP fraud? 

Dr. GUNDERSEN. It would have no impact. 

Mr. WALKER. No impact. Okay. 

And now back to you, Mr. Bragdon, you are here representing 

the Foundation for Government Accountability, is that correct? 

Mr. BRAGDON. Correct. 

Mr. WALKER. And that is a conservative think tank that you 

started yourself, is that correct? 

Mr. BRAGDON. Correct. 


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Mr. WALKER. All right. You founded it in 2011, am I correct in 

that? 

Mr. BRAGDON. Correct. 

Mr. WALKER. And you are a young man. I think I have socks 

older than you, and I want to congratulate you on your success. 

Mr. BRAGDON. I am 42, so you have some old socks. 

Mr. WALKER. You founded it in 2011. First-year revenue was 

$212,000. Second-year revenue was $731,000. In 2016, your foundation’s revenue had shot up to $4.8 million that year. Am I correct 

in that? 

Mr. BRAGDON. Correct. 

Mr. WALKER. Again, congratulations. 

Mr. BRAGDON. Thank you. 

Mr. WALKER. Your foundation is a 501(c)(3) corporation, correct? 

Mr. BRAGDON. Correct. 

Mr. WALKER. And your foundation advocates about things like 

SNAP eligibility requirements, like we are talking about today, 

right? 

Mr. BRAGDON. Correct. 

Mr. WALKER. Your foundation advocates against Medicaid expansion, right? 

Mr. BRAGDON. Correct. 

Mr. WALKER. Your foundation advocates about Welfare requirements as well, correct? 

Mr. BRAGDON. Work requirements in Welfare for able-bodied 

adults. Correct. 

Mr. WALKER. All right. Has your foundation taken a position on 

last year’s tax bill, the one that gives 83 percent of the tax revenue 

back to the 1 percent of Americans? Have you taken a position on 

that? 

Mr. BRAGDON. We have not. We focus on getting individuals from 

Welfare to work, and reducing barriers to work. 

Mr. WALKER. Now has your foundation been audited to make 

sure you are not doing more lobbying than you are allowed to do 

under the rules under 501(c)(3)? 

Mr. BRAGDON. Sir, great question, and I appreciate you are asking it. We have an audit every year. We also have a separate 

501(c)(4) organization, where if we are doing lobbying, it is done 

under a separate organization that is not tax deductible. 

Mr. WALKER. That is where I was going. The people who are giving you money, you have to list their identity. 

Mr. BRAGDON. Do we have to list the identity of —— 

Mr. WALKER. Of your donors. 

Mr. BRAGDON.—our donors? 

Mr. WALKER. Right. 

Mr. BRAGDON. No. We are not required by law to do that. 

Mr. WALKER. You don’t list your donors. And these are people 

who get a tax deduction for every dollar they give you, don’t they? 

Mr. BRAGDON. Correct. Just like individuals who give to a 

church, or any other 501(c)(3) organization. 

Mr. WALKER. You are not a church, are you? 

Mr. BRAGDON. No. No. But anyone in that (c)(3) category is tax 

deductible. 


KING-6430 with DISTILLER
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Mr. WALKER. Okay. But let me ask you this. Would it be a matter of complete indifference to you if your revenue started to decline because your donors don’t like your message? 

Mr. BRAGDON. I am not sure —— 

Mr. WALKER. Do you like it that your donors like your message 

and keep giving you more, and more, and more money every year? 

Mr. BRAGDON. So we partner with our donors to get more people 

back to work. So they voluntarily give money for us to do research 

and outreach on these issues. So it is a partnership with them. 

Mr. WALKER. Do you like it? 

Mr. BRAGDON. Do I like having donors? Sure. It funds our work. 

Mr. WALKER. Those are all my questions. Yield back, Mr. Chairman. 

Mr. PALMER. If the gentleman from North Carolina would like to 

be recognized, and I would kind of like to get back to the topic of 

fraud in SNAP. And I recognize the gentleman for additional questions. 

Mr. WALKER. Mr. Bragdon, I would like to see the 435 House 

members answer that same question, do they like their donors? 

But we will move on to the courtesy of the chairman’s wishes. 

Ms. Coffey, you note in your written testimony that the types of 

SNAP fraud are changing. How has your office worked with FNS 

to deter these new instances of retailer fraud? Could you share a 

thought on that? 

Ms. COFFEY. So when we identify potentially new fraud schemes 

that are arising based on information technology, we come across 

them as we are doing our investigative work. So it is critical for 

us to be able to go back to FNS and have those discussions with 

the agency to say, ‘‘This is what we are seeing. This is a potential 

loophole. And this is something that FNS is going to have to make 

a policy change or a change in regulation in order to address 

those.’’ 

I can’t go into specifics, due to some of them are sensitive in nature, and we don’t want to disclose those publicly to bad actors out 

there, but that is our general practice. If we see some sort of 

scheme that is out there, we will notify FNS, and work with them 

to try to address that. 

From your perspective, are retailers engaging in criminal trafficking of SNAP benefits more or less than they used to, and what 

explains this trend? We are getting information that some of the 

gangs are doing the 50 cents on the dollar, and some of the stuff 

that we are hearing. Tell me a little bit. Are you seeing some of 

the same things, or specifically, don’t want to lead you. You tell me 

what you are seeing. 

Ms. COFFEY. So in terms of what we are seeing, it is typically the 

retailers who are still doing your standard trafficking, in terms of 

exchanging cash for the benefits. There may be other—we are, you 

know, anecdotally seeing some—typically, we do not see trends 

where we have had drugs, or firearms, or other types of offenses 

in the stores themselves. We are seeing a little bit more of that. 

That is a little bit on the increase now. But in terms of, you know, 

what we are seeing, we are still seeing our typical standard trafficking. 


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Mr. WALKER. This question, I will start with you, but also want 

to get Mr. Roth’s input on it. From your perspective, what has been 

the most effective strategy to combat retailer fraud within the 

SNAP program? 

Ms. COFFEY. I think in terms of what has been the most effective 

strategy, I know that we partner with other agencies to work these 

investigations. I think in terms of the fraud that we are seeing, by 

taking the retailer out, you are only addressing one side of the 

problem. You have to really address both sides of the problem, in 

terms of making sure that there are penalties for individuals who 

are trafficking their benefits, as well as the retailers. 

Because if you take the retailer out of the program, folks can 

take their benefits and go somewhere else to traffic them. 

Mr. WALKER. Mr. Roth? 

Mr. ROTH. I would agree with that. And oftentimes when comparing it, I liken this to a drug dealer and the users. If you take 

out the drug dealer, you still have a user component. You still have 

a problem, and they are going to transfer it to another dealer. 

I was recently at the United Council on Welfare Fraud’s annual 

meeting, and some of the states were presenting mechanisms for 

which they would look at the after successful investigation into a 

store, how they would deal with the recipients. And that is certainly something we are interested in doing in Maine. 

Mr. WALKER. Okay. Would these strategies be useful for state 

law enforcement agencies, in cases where they have statutory authority? Mr. Roth? 

Mr. ROTH. Yes. Again, and any state that has the ability to conduct these investigations, they are lengthy, but we partner with 

OIG USDA. We find it works a lot better. 

Mr. WALKER. Sure. 

Mr. ROTH. They’ve got a lot more resources. We also partner with 

other federal agencies. But they are certainly a worthwhile focus. 

Mr. ROTH. What about FNS, do you think they could help? Any 

steps to assist? 

Mr. ROTH. Absolutely. They help in identifying stores that are on 

that fringe, are conducting themselves in what should be looked at, 

in a manner that should be looked at. 

Mr. ROTH. Ms. Coffey, you agree? 

Ms. COFFEY. I do agree, and I think FNS plays a critical role in 

when, through our investigative work, we identify an issue that 

needs to be addressed. Because sometimes there are loopholes. A 

number of years ago the definition of trafficking prevented us from 

being able to pursue prosecution in certain instances as the 

schemes became a little bit more convoluted. 

I think you heard Mr. Roth mention dumping water. That wasn’t 

something that was prosecutable, because that wasn’t considered 

trafficking. So in response to our concerns, FNS moved forward to 

change the definition of trafficking. So yes, FNS definitely has a 

role to play. 

Mr. WALKER. Dr. Gundersen, do you believe that somehow by reducing the total number of people that are on the SNAP program 

would also help reduce the fraud? 

Dr. GUNDERSEN. It would have no impact on the proportion of 

households that are engaging in fraud. In terms of the absolute 


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numbers, if you took—you know, almost by definition, if you take 

away, yes, the numbers will fall if there is fewer people on SNAP, 

but the proportion —— 

Mr. WALKER. That wasn’t my question. If we somehow can provide hope, and opportunity, fulfillment for many people, 40-something million, if we were able to—let’s just say if we are able to 

reduce that in half, you tell me that that would not also have a 

chance to reduce the fraud as well? 

Dr. GUNDERSEN. Well, right. By definition, is if you have fewer 

people on a program, as the economy expands, then the opportunities for fraud decline. But there are lots of ways you can —— 

Mr. WALKER. I think that was a yes. 

I yield back, Mr. Chairman. 

Mr. PALMER. I thank the gentleman. 

And I am going to recognize myself. 

Mr. PALMER. First of all, I want to try to clean up some of the 

mess that has come out of this hearing, and I want to congratulate 

the witnesses for hanging in there with us, despite this hearing 

going all over the road. 

First of all, in terms of the work requirements on the Farm Bill, 

it only impacts about 29 percent of the people who are on SNAP 

benefits at the time. It is age 18 to 59, so this idea of forcing the 

elderly to get a job is not applicable. It doesn’t apply to people with 

disabilities, or the elderly, or for caregivers with children under 6 

years old. There are waivers out of that. 

It increases the amount of assets that individuals can have. I 

mean we haven’t increased the value of an automobile since the 

1970s, and that goes from, I think, 4,000 to 12,000. So people who 

want to get a job will want to be able to get to work. And when 

they get a job, they can continue to collect their benefits. 

And Mr. Gundersen, I appreciate your answers to the questions. 

I think what will reduce fraud, because most of it has to do with 

retailers, Mr. Roth, I believe, that is the biggest number I saw, is 

about a billion dollars, is the retailers. I think you are going to 

have bad actors 

regardless the number of people you have on SNAP benefits. 

And it is an effective program. I grew up dirt poor. I get it. And 

I mean I lived in a house my dad built himself, in a room that had 

cardboard between the two-by-fours, in a bedroom I shared with 

my brother. So I understand that people need a hand-up. And I 

think this program has been beneficial, but at the same time, we 

want to encourage people to rise above their condition. 

That is not what the hearing is about. It is not about abuse and 

waste at the Department of Defense. Although, we had a hearing 

on that in March of 2017. We are looking into that. This is about 

reducing the amount of money that is lost in the program because 

of bad actors, fraud. 

And in many cases, particularly on the retail side, Mr. Roth, the 

retailers are taking advantage of people by offering them cash for 

their SNAP benefit card. They are taking advantage of people. And 

I think that is not just the loss of the money, it is what happens 

to the folks who give up that card. They are not buying food, in 

many cases. Sometimes they are buying drugs. Sometimes they are 

buying lottery tickets. It is not benefiting them or their families. 


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So that is what we want to try to focus on, is how do we eliminate 

the fraud. 

Mr. Bragdon, I apologize for the last series of questions directed 

at you. It has been my experience in the past, having run a think 

tank for 25 years, that when people start trying to undermine the 

legitimacy of your work by questioning who is contributing to your 

work, it tells me that you have already won the argument. So I 

commend you for your work. 

With that, Mr. Roth, it was mentioned that if you want to get 

an idea about the trafficking of SNAP benefit cards, just go on 

Craigslist. Is there any way in your investigations into these that 

you have looked at a sting operation, any way to combat that type 

of fraud on Craigslist? 

Mr. ROTH. We haven’t seen a lot of the Craigslist ads in Maine. 

They have come up very sporadically. But it is a difficult operation 

to do. It requires, from a safety standpoint, extra investigators. But 

we do pursue those things when we have them. We have had some 

other tips come in from people that heard of people trading their 

cards, but, again, those are very difficult investigations to make. 

We get a lot of allegations, but they are hard to work. 

Mr. PALMER. Well, I have also heard that they advertise in papers for SNAP benefit cards, and marketing them that way. But 

are there also cases where retailers are kind of networked in terms 

of what they are willing to offer, so that there may not be the same 

group, but they reach some kind of an agreement that they won’t 

pay more for a card than the other guy. 

Mr. ROTH. Ironically, we got a complaint from one retailer that 

the other one was undercutting him on what he would pay for the 

cards. So it does happen, believe it or not. 

Mr. PALMER. So wait a minute. What you are saying is, is one 

retailer literally turned themselves in by complaining that another 

retailer was offering more for the cards than they were. 

Mr. ROTH. Yes. 

Mr. PALMER. Well, that goes on another list. 

Mr. Bragdon, in your experience at FGA, Foundation for Government Accountability, what have you observed in terms of successful 

ways to reduce fraud? 

Mr. BRAGDON. I think one of the things is just, at the state level, 

the verification of actually following up on individuals, and requiring regular check-ins. I think that we all want people to move off 

the program, get back to work, and out of poverty, and that requires a certain kind of engagement, both on the front door, and 

on an ongoing basis by the state. And that is really key. 

Mr. PALMER. Yeah. I know the inspector general’s office has really focused on the retailer side of it. Have you looked into the data 

analytics to determine if that is helpful in reducing the amount of 

fraud, Ms. Coffey? 

Ms. COFFEY. So we have. Actually, that is a critical piece of any 

of the investigations that we do. With the onset of the benefits 

being electronically available, we actually have a whole host of 

data that we are able to utilize for the purposes of data analytics, 

to help us identify where potential fraud is occurring, how it is occurring, when it is occurring. And that really has given us an opportunity to really move forward on some of these investigations, 


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where prior to the electronic benefits, it would have been very challenging to try to pursue food stamp coupons. 

Mr. PALMER. Have you seen, in terms of the retailer trafficking, 

is that on the rise, or is it fairly steady? 

Ms. COFFEY. It is hard to say in terms of if it is on the rise. What 

I can say is we have initiated fewer investigations, relative to retailer trafficking, within the last year. Now there could be any 

number of reasons for that. But it is difficult for us to say if it is 

on the rise. 

Mr. PALMER. Have you made recommendations to FNS in regard 

to ways to combat the trafficking? 

Ms. COFFEY. There are a number of things that we have put forward to FNS that we are working with them on currently, to basically identify—where we have identified concerns, FNS is aware of 

that, and we are working to try to figure out the best way to address those concerns. 

Mr. PALMER. Have they implemented any of your recommendations? 

Ms. COFFEY. We are not quite there yet, but I know they are 

definitely working on it. 

Mr. PALMER. I want to get back to how we close some of the loopholes. I know the Foundation for Government Accountability has 

done a lot of work on that. And I read a number of your—I read 

all of your recommendations in your written testimony, but can you 

just highlight a couple of—a couple of them that you think would 

really have the biggest impact, Mr. Bragdon? 

Mr. BRAGDON. Sure. I think just to punch the point and the stat 

that you started off the hearing with, with the increase in the number of prosecutions, and administrative actions, this is an area 

where if you don’t look, you won’t see it, but if you do look, you 

will see a lot of different things. 

I list off in the testimony ten different areas. A lot of them have 

to do with the certification period, how long before somebody has 

to check back in. Life is dynamic, as you heard from the doctor. 

And so if people are on the program for a short period of time, but 

you are not checking in with them for a year-plus, if they go back 

to work, that is not going to be caught. 

A lot of the federal data bases that states are required to use are 

not regularly updated. So if states use their own data, they could 

have more real-time analysis. Even with the retailers, more than 

half of all stores that take EBT cards are convenience stores, and 

yet, we know from the Congressional Research Service that only 9 

percent of those stores are looked into. Yet, it is only 5 percent of 

the total transactions, but it is 20 percent likely chance that each 

transaction is trafficking. And so this is an area where aggressive 

oversight from this committee and from the agencies is really key. 

Mr. PALMER. We have been talking about fraud, but we have also 

got the issue of the payment error rate nearly doubling. That has 

been a big, big issue with me. The improper payments issue. We 

sent out $141 billion last year in improper payments. 

Every agency and every program is required by law to report 

their improper payment rate, and I think for 2 years, the SNAP 

program did not report. I think they reported last year. 


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Ms. Coffey, can you give us any idea of why that rate would have 

doubled? 

Ms. COFFEY. Recently, our office had done work relative to the 

quality control process, which helps in the calculation of the error 

rates, and had made several recommendations to FNS, in terms of 

how to improve that particular calculation. 

My understanding is, and I would have to basically talk to my 

audit colleagues, that that is really the basis for what the changes 

you are seeing, that some of those, I guess, changes in the algorithms they use to calculate that information have been implemented. And so you are seeing an increase in the error rate at this 

time. 

Mr. PALMER. You know, it is one of those things that, having run 

a think tank, and being into data and numbers, when I first got 

here and got on this committee, and the comptroller general came 

in a hearing and testified that we were sending out $141 billion a 

year in improper payments, that you have that moment where you 

think your head might explode. Considering that we are in deficit, 

that is 141 billion that we had to borrow to send out improperly. 

And then there were 18 federal programs that didn’t even bother 

to report. I think it is a huge issue. 

It is not only a fiscal issue for the federal government in trying 

to manage our fiscal situation, but it also—for instance, on Medicaid, 36.3 billion in improper payments. That is money that is not 

getting to the people that need to get it. Not to, again, reinforce the 

fact, we had to borrow that money to send it out to somebody who 

is not supposed to get that money. And some of that, not all of it, 

but a part of that was fraud as well. 

I think it is an issue that we need to crack down on, because we 

have an oversight responsibility to be fiscally responsible for the resources that we are putting out there. We have a responsibility to 

provide a program that maximizes the benefit to the people who 

need it. It is not about tax cuts for anybody, or any of that. 

I mean, like I said, I grew up dirt poor. I am thankful that there 

are wealthy people out there that started a business, and were 

willing to give me a job, give me a chance to be the first person 

in my family to ever go to college. I have never been given a job 

by a poor person. That would be just be brutally honest. 

But at the same time, I have a very strong desire to see people 

do well, and to give people a hand-up, help them to get where they 

need to be, particularly those who are in the most difficult circumstances, the disabled and the elderly. 

So with that, I appreciate the witnesses for appearing before us 

today. The hearing record will remain open for 2 weeks for any 

member to submit written opening statement, or question for the 

record. 

If there is no further business, without objection, the subcommittees stand adjourned. 

[Whereupon, at 11:56 a.m., the subcommittees were adjourned.] 

Æ 


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