[Congressional Record Volume 141, Number 31 (Thursday, February 16, 1995)]
[Extensions of Remarks]
[Pages E383-E384]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


 GO AFTER THE CROOKS AND CHISELERS WHO ARE DEFRAUDING THE FEDERAL FOOD 
 STAMP PROGRAM; SUPPORT THE FOOD STAMP TRAFFICKING AND PENALTY ACT OF 
                                  1995

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                             HON. RON WYDEN

                               of oregon

                    in the house of representatives

                       Thursday, February 16, 1995
  Mr. WYDEN. Mr. Speaker, today I introduce the Food Stamp Trafficking 
and Prevention Act of 1995, a measure which will step up the penalties 
levied on criminals intent on tearing large holes in this Nation's most 
valuable social safety net.
  Each year, waste, fraud and abuse in the Food Stamp Program costs 
taxpayers as much as $2 billion. Laundering for cash, or exchanging 
food stamps for contraband items such as guns or drugs, accounts for 
hundreds of millions of dollars of that total. Occasionally, this 
activity occurs through retailers who have been initially certified as 
bona fide grocery stores, but which are, in effect, no more than fronts 
for the processing of illegal stamp transactions.
  This activity not only denies fundamental nutrition to some of our 
Nation's most vulnerable citizens. It also destroys public confidence 
crucial to the continuation of a very valuable program.
  I have long been a critic of our Government's lackluster efforts to 
investigate food stamp fraud, and bring to justice persons who are 
ripping off the system. Our investigative strength at the Food and 
Consumer Services Division, for example, is about half of what it was a 
dozen years ago--despite steady growth in food stamp use and fraud. 
These personnel cuts make no sense. We need more cops on the beat. 
Improvements in anti-fraud technology such as the electronic benefits 
transfer program will not produce maximum results until we have more 
people to make cases and bring the crooks to trial.
  I have recently pressed my case on this subject with White House 
domestic advisors. I am hopeful that the administration's welfare 
reform efforts will improve our capacity to police fraud in this 
important program. I believe my position has strong, bi-partisan 
support in this House.
  Beyond increasing our investigative effort, we must also look to 
establishing real penalties that will cause real pain for the chiselers 
who are, quite literally, taking food from the mouths of this Nation's 
poverty-stricken elderly, working poor and defenseless, destitute 
children.
  The Food Stamp Trafficking Prevention and Penalty Act has three 
important elements.
  First, we will strengthen current forfeiture provisions to allow the 
Government to take all assets resulting from, or involved in the 
commission of food stamp trafficking. I have devised this language in 
close cooperation with 
[[Page E384]] the inspector general of the Department of Agriculture. 
We are both convinced that this toughened penalty is absolutely 
necessary to discourage trafficking, and close down what amounts to a 
nearly no-fault avenue to criminal success now present in the system.
  Second, we allow the Secretary of Agriculture to require that owners 
of food stores certified to exchange food stamps submit a valid 
business license. The intent of this section is to verify that persons 
in the food stamp networks are actual retailers, and not criminal 
fronts set-up primarily to illegally launder the stamps.
  Third, the bill requires periodic reporting by certified stores to 
ensure that they are indeed in a bona fide business, and are not merely 
fronts for laundering. This can be accomplished in a user-friendly way 
by requesting copies of Federal tax forms which delineate volume and 
scope of business activity.
  Again, the inspector general has argued that this verification 
procedure is crucial to the program's sound and honest functioning, and 
I believe my bill creates a system that will be relatively easy and 
inexpensive for retailers certified for food stamp business.
  Mr. Speaker, as Congress moves forward with the welfare reform 
debate, the holes in system integrity must be closed. Effective welfare 
reform must be built on a strong foundation in order to guarantee 
taxpayer support and ensure that resources go not to the crooks but to 
the people who are most in need.


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