[Congressional Record Volume 147, Number 48 (Wednesday, April 4, 2001)]
[Senate]
[Pages S3443-S3444]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. GRASSLEY (for himself, Mr. Breaux, and Mr. Burns):
  S. 693. A bill to amend the Social Security Act to provide additional 
safeguards for beneficiaries with representative payees under the Old-
Age, Survivors, and Disability Insurance program or the Supplemental 
Security Income program; to the Committee on Finance.
  Mr. GRASSLEY. Mr. President, I rise today to introduce legislation 
aimed at protecting Social Security benefits of some of the most 
vulnerable people in our society.
  Today, I am introducing, along with my colleagues Senator Breaux and 
Senator Burns, the Social Security Beneficiaries Protection Act of 
2001. This legislation, identical to legislation introduced in the 
106th Congress, is meant to provide additional safeguards for 
beneficiaries with organizational representative payees. Sometimes, 
beneficiaries are not capable of managing their benefits on their own. 
Usually, in these situations, a family member or close friend manages 
their benefits for them. However, there are those who, for whatever 
reason, don't have family or friends who are able to act as the 
representative payee. In those cases an organizational representative 
payee can handle their benefit checks.
  Approximately, 750,000 Social Security beneficiaries have an 
organization handling their monthly checks. These organizations include 
social service agencies, banks and hospitals. Most of these 
organizations provide a much needed service.
  However, in the spring of last year, the Senate Special Committee on 
Aging, which I chaired at the time, held a hearing examining the 
fraudulent misuse of benefits by some organizational representative 
payees. The hearing highlighted the findings of an investigation 
conducted by the Social Security Administration's, SSA, Office of 
Inspector General, OIG. James Huse, Inspector General for SSA testified 
that since fiscal year 1998 the Social Security Administration has 
identified over $7.5 million in losses to beneficiaries. In several of 
those cases, hundreds of individuals were victims of severe abuses by 
organizational representative payees.
  Another witness at the hearing, Ms. Betty Byrd testified to the 
hardship that is placed on a beneficiary who is the victim of a 
dishonest representative payee. Ms. Byrd was 70 years old and required 
a representative payee because of an extended hospital stay 100 miles 
from her home, followed by placement in an assisted living facility. 
Her fee-for-service organizational representative payee, Greg Gamble, 
was responsible for collecting Ms. Byrd's benefits and paying her 
utility bills, medical expenses, and rent. However, Mr. Gamble had his 
own ideas for how to spend Ms. Byrd's money. He stopped paying her rent 
and as a result she was forced to sell her trailer. The power was 
turned off because he stopped paying her utility bills. Her care 
facility informed her that Mr. Gamble was several months behind on her 
payments. The nursing home threatened to evict her. In her own words 
she was left, ``almost homeless, without medical care, and in serious 
financial trouble.'' Mr. Gamble was caught and pled guilty to using his 
clients' benefits for his own purposes. He has agreed to pay back 
$303,314.
  The primary purpose of this legislation, which is based on 
recommendations by Social Security Administration Office of Inspector 
General, is to provide immediate relief to victims of representative 
payee fraud. By providing SSA with the authority to re-

[[Page S3444]]

issue benefits victims would be made whole again.

  This legislation would also provide for additional accountability by 
payees to the SSA in an effort to prevent abuses from taking place in 
the future. While the Social Security Administration does have a 
selection process in place, it needs strengthening.
  The Social Security Beneficiaries Protection Act of 2001 would 
require that non-governmental fee-for-service organizational 
representative payees be licensed and bonded. Under current law, an 
organization representative payee is only required to get one or the 
other.
  For any month in which the Social Security Commissioner or the courts 
have determined that an organizational representative payee misused all 
or part of an individual's benefits he or she would be required to 
forfeit the fees. The legislation would also make the representative 
payee liable for any misused benefits.
  Ms. Byrd's story demonstrates there is a need for stronger safeguards 
to protect the elderly and disabled who require an organizational 
representative payee. I urge my colleagues to cosponsor this important 
legislation and help protect the most vulnerable Social Security 
beneficiaries.
                                 ______