Where Does All That Food-Stamp Money Go?

James Greiff is an editor for Bloomberg View. He was Wall Street news team leader at Bloomberg News and senior editor for Bloomberg Markets magazine. He previously reported on banking for the St. Petersburg Times and the Charlotte Observer.
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Many Americans have their doubts about food stamps -- the benefits are a burden on taxpayers, they breed dependency and lack of controls encourages fraud, just to name a few of the complaints. Too bad the federal government is acting as if there really is something to hide in a program that helps more than 47 million people avoid hunger.

Earlier this week, anewspaper in South Dakota urged an appeals court to force the U.S. Department of Agriculture to reveal information on how much the government paid individual retailers when consumers redeemed food stamps. The Argus Leader sought the data more than two years ago under a Freedom of Information Act request.

The government's arguments for keeping the information under wraps are either weak, flawed or stupid. At least the three judges on the Eighth Circuit Court of Appeals expresseda bit of skepticism when the government made its case.

Government lawyers offered three different rationales for withholding the information.

The first is circuitous: Food-stamp transactions, and the data stream this generates, are transformed into something confidential by the mere fact that the Agriculture Department gathers the information. This makes no sense.

The next is easier to understand and in some ways worse. Information regarding a business's sales, taxes and income are legally exempt from disclosure under FOIA. No disagreement there; the law couldn't be clearer.

But the Argus Leader wasn't asking for that information. According to the government's lawyers, however, money from the Supplemental Nutritional Assistance Program, the formal name of the food-stamp program, is part of a retailer's income stream. Hence, the payments to retailers are exempt from FOIA disclosure.

This is a stunning and appalling assertion, even if there is some strained legal interpretation that allows it and the government happens to find a judge who agrees. The Argus Leader's lawyer tried to make it clear the newspaper wasn't asking to know how much the stores took in by way of retail sales; it wanted to know how much federal money was being received via the food-stamp program.

By this reasoning, we might as well just apply that same standard to the entire federal government. That way we will be better off and never know how much in taxpayer dollars is going to any contractor, vendor, consultant or anyone else who does business with Uncle Sam. After all, payments they receive from the government are part of their income as well, and therefore should be confidential.

The government's third argument was that disclosing which stores received how much through the food-stamp program would aidfraudsters. The government lawyers said Agriculture Department sleuths use the redemption information to look for fraud, and food-stamp recipients could use the same data to see which stores are the bad actors willing to abet wrongdoing.

But without knowledge of how much in food stamps are distributed locally -- something the Agriculture Department knows -- how would raw redemption information help a food-stamp scammer? If someone wants to commit fraud, asking around the neighborhood or posting food stamps for sale on the Internet is a lot easier than combing through some government data files.

There's no mystery in how much money is spent on food stamps -- $78billion in fiscal 2014. It's hard to see how telling the public which businesses are beneficiaries of that money will harm the program. That was the Argus Leader's objective when it sought the information in the first place. Releasing this information might even accomplish something more sweeping and enhance the program's credibility with those Americans who are skeptical of its success.

This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.

To contact the author on this story:
James Greiff at jgreiff@bloomberg.net