December 29, 2016

2016 Top Stories #1: SNAP fraud scandal at HSD

Photo Credit: Paul Sableman cc

In April, five employees of the state agency that processes key federal benefits to the poor made explosive testimonies in court—that their bosses instructed them to doctor emergency food aid applications to hurt the very people they’re supposed to help.

The following month, four more Human Services Department employees added their voices to the allegations. Then, three top state officials were called to the stand and pleaded the Fifth, refusing to answer nearly 100 total questions about their role in the scandal.

Previously: Top ten stories of 2016: 10-6; #5: NM Dems buck national trend, retake House#4: Demesia Padilla resigns#3: AG clears final behavioral health providers#2: State budget situation worsens

“In my opinion, we’re cheating those families,” Angela Dominguez, one of the HSD employees, said in her court testimony.

The underlying question next became, why?

According to various court testimonies, the state’s unwritten directive amounted to encouraging employees to add fake resources to any late application for emergency benefits to the federal Supplemental Nutrition Assistance Program, formerly known as food stamps.

Federal law requires state governments to process emergency SNAP applications within seven days. If they’re not processed within that timeframe, the applications are late.

If a state has too many late emergency applications, it can be penalized by the federal government. And New Mexico, the allegations go, have a ton of late emergency SNAP applications.

The fact that these allegations surfaced in court, where employees had to swear under oath and publicly give their names, is something a national SNAP expert called “unprecedented.”

“The fact that all these things are coming out in court records and under oath makes it unique, because we don’t usually get the opportunity to really see the department’s inner workings in this way,” Samuel Chu, a national synagogue organizer with Mazon, a California-based anti-hunger organization that tracks food stamp issues across the country, said over the summer. “I think that that is a precedent.”

HSD Secretary Brent Earnest soon claimed the testimonies were the first he had ever heard of the allegations of SNAP fraud within his department. He issued an order to employees telling them to stop breaking the law. He also launched an internal investigation into the matter.

Yet his department’s lawyer, the Susana Martinez administration’s key damage control chief Paul Kennedy, got criticized by a state senator for “browbeating” the HSD whistleblowers in court.

Kennedy questioned why one of the employees didn’t report her knowledge of the allegations sooner and inferred to another that she was only testifying to cover for herself.

“If they didn’t know [about the faked assets], why are they actively seeking to discredit the workers who have come forward?” Center for Law and Poverty attorney Sovereign Hager said in May, referring to HSD.

The testimonies came as part of a decades-old lawsuit against HSD that alleged the state agency wasn’t properly processing federal benefits for the poor. That lawsuit, Deborah Hatten-Gonzales vs. HSD, resulted in a 1990 consent decree.

The Center on Law and Poverty accused HSD of not following this conset decree at the beginning of the year. By the fall, months after the SNAP fraud allegations surfaced in court, a federal judge held Earnest in contempt for not following the consent decree.

The judge also appointed a special master to oversee HSD’s division responsible for processing benefits and bring it into compliance with federal law.

That special master, former Texas government official Lawrence M. Parker, will not have the power to make decisions for HSD, as the Center on Law and Poverty lobbied for. But Parker will also not act as just a consultant under HSD’s authority, as the state argued for in court.

Instead, he will be able to make recommendations to court, and a federal judge will have the final say on whether they will be followed or not.

As for getting to the bottom of the fraud allegations, that’s something HSD is still apparently working on. The U.S. Department of Agriculture, which administers SNAP, is assisting the state in its investigation.

This investigation hasn’t gone exactly smoothly. In July, HSD released an incomplete report of the investigation without yet interviewing the administrators alleged to have directed the fraud. Later in the fall, the public employees union that represents HSD employees questioned the tactics of the investigation—specifically whether investigators were scrutinizing “frontline workers” more than their bosses who ordered the fraud.