Fraud by Design – How Democrats Hope to Make Everyone Reliant on Welfare

AMAC Exclusive By Sam Adolphsen

When it comes to fraud in government, Democrats are deceiving the whole country. In the name of fighting fraud in our safety net programs, leftwing politicians and bureaucrats are reengineering these programs to allow for increased spending and expanded enrollment simply by ignoring or completely getting rid of eligibility standards.  The result of this massive “fraud by design” is that millions of people who are now ineligible for benefits remain on these welfare programs today.

Unsurprisingly, those politicians who build campaign coalitions using welfare and unemployment funds are extremely reluctant to ackowledge any problems with these programs.   They insist that fraud isn’t a problem. When that lie becomes untenable, they admit it’s a problem but downplay it to the point where it seems trivial. You’ve heard from left wing think tanks that fraud accounts for “less than one percent” of all benefits the government hands out. That’s a refrain parroted by many politicians and academics on the left.

 The truth is that fraud is significant. And it’s not hard to find. The massive infusion of federal money into government programs during the COVID-19 pandemic has not created a new problem but shined a spotlight on an old one. 

 We’ve seen some of the more absurd stories, like the Nigerian fraud ring that stole as much as $800 million in Oregon unemployment benefits last fall. Or the case from Los Angeles, where three women recently pled guilty to using information from other people to improperly collect $1.2 million in COVID-19 unemployment benefits. Even the Washington Post reported that Maryland officials have detected over 500,000 “potentially fraudulent” jobless claims since May of this year alone.

But a few colorful incidents of fraud and waste don’t capture the scope of the problem. Over 21 percent of Medicaid’s payments in 2020 were improper. That’s $86 billion in improper payments. Even before COVID-19, when claims spiked as states struggled to keep up with rising unemployment, fraud was a serious problem. The Department of Labor estimated that a full 10.61% of unemployment insurance benefits were improper in the 12 months leading up to the outbreak of the pandemic in the United States—and that was before the massive expansion of unemployment payments to millions of new people.

 So it’s worth repeating—there is significant fraud in welfare. I’ve seen it first hand.

 When I oversaw the food stamp program in Maine a few years ago, I worked with the FBI to catch the owners of a local market who stole more than $1 million from taxpayers. I’ll never forget building a map to track food stamp card spending and seeing how much money from Maine was spent at Disney World.

 Trust me. Fraud happens routinely when government agencies fail to put safeguards in place to prevent it and punish wrongdoers.

But I’m more worried about a new kind of fraud that isn’t punishable because it’s state-sanctioned. When policymakers redefine eligibility standards out of existence, the stories of foreign crime syndicates stealing millions of tax dollars pale in comparison to the “fraud by design” the government itself is intentionally facilitating.  After all, when theft is no longer a crime, a thief is no longer a criminal.

 Consider the case of Medicaid.  Since March 2020, the federal government has prohibited states from removing anyone who entered the program–save for the dead or re-located—even if they become ineligible for some other reason or commit blatant fraud. The result is that millions remain on Medicaid today that just a few years would be ineligible.  

This is only the latest example of fraud by design. President Obama created rules that let hospitals enroll able-bodied adults in Medicaid without ever verifying their income or household information. If they’re later shown to be ineligible, state and federal taxpayers can’t recoup those funds.

 The government has even renamed fraud itself. Sure, the “error rate” is over 21%. But at least there is very little “fraud!”

 As far back as the Clinton administration, bureaucrats opened loopholes to let people with unlimited cash assets get food stamps meant for hungry kids and families. They gutted work requirements for adults with no children. And they killed off reporting requirements that ensured people getting benefits were actually eligible to receive them.

Want to see fraud by design in action? Ask policymakers whether or not skipping an enrollee’s annual reviews should be treated the same as trafficking EBT food stamp cards.

Fraud by design makes sense for some politicians and bureaucrats. After all, handing out free money has rarely made a politician less popular, especially with those receiving it. But it’s unfair to law-abiding, hardworking taxpayers—and it’s bad for the recipients themselves, making them increasingly dependent on government.

 Ask your neighbor if someone getting a welfare benefit they are not eligible for is fraud. They won’t offer lawyerly prevarication. And they won’t take long to answer. They understand who the safety net is for – the truly needy.

Now, fraud by design is infiltrating even more fundamental processes like voting.

What do opponents of election integrity say? “Verification of voters and voter registration lists are not needed,” or “it’s a few bad apples, not a systemic problem,” or, most dangerous of all, “fraud is very rare.”

 Sound familiar?

 Sam Adolphsen is the policy director at the Foundation for Government Accountability, and the former Chief Operating Officer for the Maine Department of Health and Human Services where he oversaw welfare eligibility and fraud investigations.