Stealing food from the poor
by Seth Oldmixon, Sun Mar 02, 2008 at 08:15:15 AM EST
In the late 1990s, the government decided to reform welfare. In many states, part of this reform involved outsourcing the administration of government services to private, for-profit companies. New York Times reporter Jason DeParle looked at the result of this privatization in his 2004 book, American Dreams, and noted one company in particular that personified the mismanagement and waste that occurred because of government outsourcing - Maximus.
DeParle's research into Maximus's government contracting found widespread waste and mismanagement of taxpayer money. In 2004, he wrote for Washington Monthly,
[Maximus] spent $100,000 of program money on backpacks, coffee mugs, and other promotional fluff. It spent tens of thousands on employee entertainment. It spent $3,000 to take clients roller-skating and $2,600 for professional clowns. Though Maximus later agreed to repay $500,000 to the state and donate another $500,000 to community groups, the true extent of the waste will never be known because the records were in such disarray.
Jason DeParle was not alone in discovering shoddy - and even corrupt - billing practices by the company.
In 2007, the GAO reviewed accounting deficiencies at the Center for Medicare and Medicaid Services[PDF] and found that Maximus received over $600,000 in "questionable payments" for undocumented costs and for costs that were not part of the government contract.
Even earlier, in 1999, after "several recent media reports, including reports that questioned whether [government] funds had been used for other purposes," the State of Wisconsin's Legislative Audit Bureau found similar discrepancies in Maximus's billing[PDF] and found over $400,000 in "unallowable and questioned costs" including $950 worth of tickets to Six Flags, and $23,000 for a performance by Broadway star Melba Moore.
So what is Maximus doing now? Trying to get control of more government services. This time, the federal food stamp program.
Maximus has already been part of a disastrous food stamp privatization project in Texas. In 2005, Maximus won a $370 Million subcontract in support of the Texas Health and Human Services Commission's Integrated Eligibility and Enrollment program that outsourced eligibility and enrollment processing. The program was deemed a disaster.
Today, a cursory glance at federal lobby disclosure reports from the past few years shows that Maximus has been paying high-dollar DC lobbyists to lobby the House, Senate, HHS, and the Department of Agriculture. The topic of discussion listed on lobbying disclosure documents include: "[Temporary Aid to Needy Families] Reauthorization","Food Stamp Program", "Needs Assessment Program".
And all of this lobbying could pay off. Congress is about to go to conference on a Farm Bill. There's a provision in the House version that reaffirms current law and explicitly forbids the outsourcing of the eligibility process for food stamps to hired contractors (like Maximus).The House provision must remain in the conference report in order to protect taxpayers from getting stuck paying for Maximus's roller skating parties and Broadway Shows.
As our country heads into a rough economic outlook, putting food security for our nation's poorest children in the hands of companies like Maximus is a risk we can't afford to take.