DSHS official resigns over fraud uproar
SEATTLE — The official in charge of Washington state’s food stamp and child support agency has resigned amid an uproar over televised remarks he made that appeared to dismiss evidence of welfare fraud.
KING-TV reported that Department of Social and Health Services Assistant Secretary Troy Hutson, of the Economic Services Administration, tendered his resignation in the past week. Several state lawmakers have recently called for him to be fired.
The station used public records requests to reveal that in the span of one year, people using state-issued welfare debit cards withdrew about $2 million from ATMs at Washington casinos. Furthermore, it determined that DSHS issued replacement cards, with no questions asked, to people who claimed to have lost theirs. Each month last year, the department handed out an average of 27,000 replacement cards. Some 20,000 people had cards replaced three times or more, and nearly 100 had their cards replaced at least 20 times.
The station also documented cards being sold on the street and on the website Craigslist.
Hutson told the station that the department replaced the cards so quickly because it wanted to provide good service and convenience to the state’s poorest residents. He also suggested that just because the money was withdrawn in casinos doesn’t mean it was spent there, and it might cost more to investigate apparent fraud than the state could recoup.
Those comments that drew the ire of state lawmakers, who said Hutson should be setting a higher standard in preventing fraud and showing more respect for taxpayer money.
“It seems clear from the television report that his position as a steward of our citizens’ valuable tax dollars has not imbued in him a sense of the serious nature of these documented offenses,” Republican state Sens. Mike Hewitt, Mike Carrell, Andy Hill and Jeff Baxter wrote to DSHS Secretary Susan Dreyfus on April 7.
Dreyfus has asked former Eastern Washington U.S. Attorney James McDevitt for a report on the public assistance system. That report will go to former Franklin County Prosecutor Steve Lowe, who has been hired to run an office in charge accountability and program integrity.
It is against state law to use welfare money for gambling.
In an interview with The Seattle Times on Friday, Hutson reiterated his position.
“They’re poor,” he said. “Even if you go after them, you’re not going to get the money back.”
He added: “I believe we are accountable to the taxpayer and need to make sure we are getting good value for the dollar, but I also believe that even if you are poor, you deserve excellent customer service, and you deserve to have dignity.”
State Rep. Mark Miloscia, D-Federal Way, who has a background in auditing and quality control, came to Hutson’s defense.
“In my judgment, Economic Services is the best-run agency in the state and was on track to be recognized nationally,” he said.
During Hutson’s tenure, the agency was recognized by the federal government for efficiency and accuracy in processing food stamp benefits, which netted $6 million in bonuses that went directly into the state’s general fund, according to a 2010 DSHS news release.
An immigrant from South America and the child of a single mother, Hutson grew up poor. He served 19 years in the Army, earned a degree in nursing from Seattle University, a law degree from University of Washington, and a degree in agriculture in the West Indies. Before joining DSHS, Hutson was vice president of the Washington State Hospital Association.
He took a pay cut to come to DSHS because he was drawn to the work, he told the Times.
DSHS spokesman Thomas Shapley said fraud cannot be tolerated and public confidence in the integrity of the system must be maintained.
“When you are dealing with taxpayer dollars, people who are needy and the worst economic times since the Great Depression, you have to watch every dollar and every dime,” Shapley said.