June 16, 2016

HSD outlines plan to right ship in food benefits debacle

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Human Services Department Secretary Brent Earnest

An official who pleaded her Fifth Amendment rights in court over widespread allegations of fraud in how the state administers the federal Supplemental Nutrition Assistance Program will take charge of a large portion of the state’s corrective action plan to fix many of the program’s problems outlined by the federal government.

In May, Marilyn Martinez, the state Human Services Department’s director of the Income Support Division, appeared as a witness in federal court and refused to answer 39 questions from attorneys with the Center on Law and Poverty.

Many of these questions centered on Martinez’s role in the alleged institutional practice of adding fake assets to emergency applications to deny benefits to people seeking aid from the program formerly known as food stamps.

“Why did you think it was appropriate to be adding assets to case files in order to bar people from being approved for expedited SNAP?” attorney Daniel Yohalem* asked Martinez during her testimony.

“I’m invoking my Fifth Amendment right,” Martinez responded. “Pursuant to that right, I will not be answering questions.”

Now, HSD has placed Martinez in charge of several tasks to bring SNAP processing into compliance with federal law. It’s a move prompting criticism from the union that represents employees who process SNAP applications for the state, eight of whom came forward with fraud allegations in federal court.

“It’s fair for the union to question the wisdom of putting someone who has invoked her Fifth Amendment Rights to avoid potential incrimination in charge of making these vital and important decisions,” Miles Conway, a spokesman for American Federation of State, County and Municipal Employees Council 18, said in an interview.

The move follows a scathing May letter from the U.S. Department of Agriculture, which oversees SNAP, threatening to pull federal funding if the state agency doesn’t submit a performance action plan. The letter, which NM Political Report first reported earlier this week, accused HSD of violating eight “severe compliance issues” in administering SNAP.

Specifically, the USDA faulted the state department’s practice of keeping pending SNAP applications open for more than the allowed 60 days, approving applications without interviewing or determining a person’s eligibility for SNAP and failing to keep accurate records of clients.

In a June 14 response to USDA, HSD Secretary Brent Earnest agrees that his department’s SNAP processing violated these federal requirements. But he attributes the violations to being forced to follow a May 2014 court order barring HSD from rejecting SNAP applications for procedural purposes. Earnest also cites two U.S. Supreme Court rulings stating that federal court orders trump federal law.

Earnest claims HSD previously sought out help on the matter from the federal government, to no avail.

“Regretfully, little guidance was provided,” he writes.

He then outlines a five-pronged corrective action plan. Three of the directives are led or co-led by Martinez.

These include Martinez requesting technical assistance from UDSA to shorten the state’s application process time periods, submitting the department’s goals to federal court and requesting that the federal government approve the state department’s notices during developments in the lawsuit.

Earnest’s letter reads that Martinez will complete all of these tasks this week.

Retaliation for not adding fake assets

The May 2014 court order came as part of a long-standing lawsuit from the Center on Law and Poverty accusing HSD of mishandling its SNAP and Medicaid processing. At the time, the state department’s switch to a new IT system led to the automatic denial of food assistance to between 10,000 and 30,000 applicants in New Mexico.

Earlier this year, the Center on Law and Poverty brought a total of nine HSD employees before court to testify about an alleged practice of adding fake assets to deny emergency SNAP applications. HSD higher-ups allegedly ordered the fraudulent practice to clear its backlog of overdue emergency SNAP applications. Caseworkers said the orders came from the top of the agency.

Federal law compels state agencies to process emergency SNAP applications within seven days of receipt. Only the poorest of the poor qualify for these emergency benefits..

During the May court hearing, Silver City-based claims processor Alexandra Hancock testified that Martinez retaliated against her for correcting a mistake on a late emergency SNAP application and processing it for benefits instead of adding fake assets.

Specifically, the applicant reported $700 in income for the month, which another HSD employee wrongly wrote as $1,500. Because the applicant’s rent and utility expenses exceeded his monthly income, he qualified for emergency SNAP aid, according to Hancock.

After processing the case, Hancock said that she was called into her director’s office for a meeting with Martinez and Laura Galindo, the former Income Support Division Deputy Director.

“I was told that this time it was OK, but if it happened again I would be referred to [human resources],” Hancock testified.

She added that her line manager required her to write an explanation for why she processed the case.

“During the meeting it was said that we needed to do everything in our power to ensure we don’t have late expedites,” Hancock told the court, attributing that statement to “either” Martinez or Galindo.

Hancock said she came out of the meeting interpreting orders to “do whatever is within your power to ensure that [an overdue emergency application] doesn’t go out, whether that means fraud or finding something that you may have missed in the on the application.”

“Because I processed the case correctly, there was nothing I could have done unless I would have entered in fraudulent income or resources,” Hancock testified.

When Galindo took the stand as a witness in court that same day, she pleaded her Fifth Amendment rights 58 times.

Advocacy group wants intervention

Last week, U.S. Rep. Michelle Lujan Grisham, D-N.M., expressed dismay in a Congressional hearing that USDA is not investigating the fraud allegations in New Mexico. Though USDA Undersecretary for Food, Nutrition and Consumer Services Kevin Concannon responded that New Mexico’s “inspector general” is investigating the fraud allegations—in fact HSD’s own internal inspector general is investigating them—he did tell Grisham and others that he was willing to recommend a federal investigation.

Earnest and his spokesman, Kyler Nerison, did not respond to repeated phone calls, voicemails and emails seeking comment for this story. The department has generally avoided answering questions or commenting on stories by NM Political Report.

In his letter to USDA, Earnest does repeat a public relations mantra that HSD has given other media outlets in response to his agency’s SNAP snafu.

“More New Mexicans are now receiving SNAP assistance than ever before because of the steps we have taken,” Earnest writes. “We have continued to improve out [sic] timely processing of applications and we are exceeding federal timeliness standards.”

The Center on Law and Poverty wants the court to appoint an independent monitor to direct HSD’s SNAP and Medicaid processing. Final arguments for that motion are scheduled for next month.

*Daniel Yohalem previously represented the author of this story when he was a staff writer at the Santa Fe Reporter as part of a public records lawsuit against the governor’s office.

Updated 5:35 pm with quote from Miles Conway of AFSCME. 

Read Earnest’s letter to USDA below:

NM CAP – 6-14-2016 by New Mexico Political Report

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