Arrow-right Camera


Government scammers come in all shapes and sizes

SATURDAY, DEC. 17, 2011

Surely, by now, you’ve heard of the Lake Washington welfare scammers. A Seattle-area chiropractor and his wife, living in a million-dollar home and driving a Jaguar and fraudulently slurping up $135,000 in federal payments meant for poor people.

It’s outrageous, of course. Unconscionable. And it’s being spun outrageously, too: It’s the tip of a billion-dollar iceberg, we’re told. Proof of the misbegotten welfare state. A spectacular government failure.

A reason to feel okey-dokey about the blithe dismantling of the social safety net.

On the other hand, you probably haven’t heard much at all about the American Grocers Ltd. scam. That one involved a Houston company that erased the expiration dates on old food and sold it to the government to feed American soldiers overseas. The company just paid $15 million and its CEO pleaded guilty to criminal charges to settle accusations that it defrauded the government to the tune of $36 million.

It’s outrageous and unconscionable, of course. One might even say it’s more outrageous and unconscionable than the Lake Washington welfare scammers. One might even say it’s, oh, 266 times more outrageous and unconscionable, in terms of dollars, and immeasurably more outrageous and unconscionable in terms of potential impact.

But is it the tip of any iceberg? Proof that we cannot trust the private sector to provide government services? Proof, perhaps, that we should simply stop feeding soldiers?

Well, it is the tip of one conspicuously large hunk of ice: billions of dollars in fraud that the federal government retrieved from scammers during the past year. One might look at this as a situation where fraud is being identified and prosecuted by a federal government that has made it a point to go after scammers more aggressively.

A success story, in other words. However much undetected fraud goes on – and I’m sure there is plenty, in government and business alike – more of it is being caught and prosecuted right now than in years past.

Don’t hold your breath waiting for that narrative on Fox News.

In fiscal year 2011, the Department of Justice recovered $5.6 billion in fraud, according to a recent report by the White House. That’s 167 percent more than it retrieved from scammers in 2008, back before Obama took over and ruined everything. It’s part of $15 billion in fraud the department has brought back to government coffers since 2009.

That’s enough scratch to cover 52.6 million months of the average household outlay for food stamps. It’s enough to cover the cost of more than 100,000 millionaire welfare scammers at the rate of the Lake Washington couple.

I’m not so naïve as to believe that these figures are proof the government has gotten fraud under control. Waste and mismanagement and criminal fraud are problems in human organizations. These cases are clearly not the only ones. Medicare fraud, and drug-prescription scams for painkillers, are a particularly large problem, making up more than half of all the cases in recent years.

But neither are they proof of what the forces allied against government and against all taxes want to believe: that our only financial problems are government waste and unchecked fraud in programs for the poor. That’s there’s plenty of money for everything, once we catch all the millionaire welfare scammers.

As the recession rolls onward and as more and more people suffer, this stance is crucial to those who want to get government out of the business of helping people. Who want to be sure to leave every millionaire as much money as possible – to keep asking less and less of them, while pretending that they are being asked to give more and more.

We see this misdirection in discussions on the state level. State budgets have been cut by more than $10 billion in the last few sessions, and the result is undeniable. And yet when certain conservative politicians talk about the budget, they would have us pay no attention to those figures, and note that government revenue has actually increased slightly. Pay no attention to the tens of thousands of people who need help; pay no attention to the laid-off teachers and swelling classrooms; pay no attention to crazy college tuition or the empty pot of student aid.

Look instead, we’re told, at this single out-of-context example. Focus instead, we’re told, on pretending there’s no such thing as inflation or exploding caseloads or rising populations or growing health-care costs. Fasten all of your attention instead, we’re told, on the Lake Washington welfare couple, on the conniving poor – therein lies the problem.

Fraud is fraud. But not everything, it seems, is an iceberg.

Shawn Vestal can be reached at (509) 459-5431 or Follow him on Twitter at @vestal13.

There are five comments on this story »