Retailers who try to traffic in food stamp benefits are being targeted in a new proposal from the U.S. Department of Agriculture. The complete proposal is found here.
I've written about the Supplemental Nutrition Assistance Program fraud before, and the Aug. 9 proposed retailer sanctions answer critics who say too many dollars are lost too quickly too "bad apple" SNAP retailers.
The proposal will hit wayward retailers in the pocketbook, at least that is the idea.
Current regulations allow trafficking civil money penalties in lieu of permanent disqualification; not in addition to the disqualification. The new proposed rule will assess a fiscal penalty in addition to permanently removing any retailer found guilty of trafficking, the most serious of SNAP violations.
And get this - the penalty would be based on the amount of SNAP business the retailer conducts.The new statutory limit on fines is $100,00 per violation, up from $32,000 per violation now.
Retailers found guilty of trafficking a second time will no longer be eligible to pay a fine instead of being disqualified. After a second offense, the store would be permanently disqualified.
I think the new fines are considerable, but greater transparency of program data is needed as well. Why not provide a full accounting of all SNAP redemptions at all U.S. grocery stores participating in the program? Having more eyes on the data could only help enforcement efforts.
It is not as if fines alone can stop abuse. In May, a Minneapolis retailer was ordered to pay $2.4 million in restitution to the government for trafficking.
But the retailer had been abusing the system for years. In a news release, the Department of Justice said that between 2004 and 2009, the average annual food stamp redemption for a similarly sized store in Minnesota was approximately $322,793. In contrast, during that same period, the implicated retailer's annual redemptions totaled approximately $3.1 million.
The USDA's proposal is sound, but the public needs to see more transparency from the SNAP program, both in benefits paid to stores and the type of food purchased by participants.