Katherine Green Robertson: Turning a blind eye to fraud in benefits administration

  Amid the news of the debt ceiling debate and the government shutdown, a disturbing report was released in the U.S. Senate on October 7 revealing rampant abuse in the approval process of Social Security Disability benefits. The report, issued by the U.S. Senate Homeland Security and Government Affairs Committee, offers a peek into just how loosely at least one government benefits program is administered and sheds light on the need for more oversight of the programs that swallow 10% of the nation’s GDP.

  The Committee report encapsulates a two-year investigation, led by Senator Tom Coburn (R-OK), of a West Virginia Social Security office charged with the disbursement of Social Security Disability funds. The investigation uncovered an advanced network of inside dealings between a Kentucky-based law firm, local doctors, and an Administrative Law Judge resulting in a complex rip-off of the federal government’s disability program.

  The suitably named Eric Conn of the Conn law firm in Kentucky paid doctors substantial fees for unsubstantiated medical evaluations of his clients, maintained a highly questionable relationship with the judge who consistently approved Conn’s clients for benefits, and in doing so generated more than $4.5 million in attorney fees paid by the Social Security Administration for services rendered to disability applicants.

  The travesty, however, is not the millions paid to the attorney, but the billions that will be paid out over the lifetimes of those whose claims were improperly approved under this scheme to defraud the U.S. taxpayers.

  Senator Coburn has established himself in the Senate as a crusader for cutting down on wasteful government spending and fraud in entitlement programs; but in the Senate, he is frequently faced with opposition from legislators who, he says, "buy into the idea that getting more people on Social Security is more important than doing oversight." This line of thinking is problematic in its feasibility, not to mention the damage it will ultimately cause to those who qualify for and need the assistance the most. The Social Security Disability Insurance Trust Fund is running out of money. It is projected that by 2016, 20% of benefits will be cut, yet disability benefits are being approved in record high numbers. An estimated 15%, or $21 billion of SSA benefits, are rewarded to ineligible recipients. Earlier this year, Social Security acknowledged they haven’t processed over 1.3 million "follow-ups" to make sure people who are receiving disability benefits are still entitled to receive them.

  Congress cannot continue to turn a blind eye to issues of fraud in entitlements and must give this report and its glaring implications the attention that it deserves. Reforms to reduce fraud and redirect funding to individuals who legitimately qualify for these benefits must be implemented. Furthermore, the Social Security Administration must take the information in this report and review the list of claimants with a connection to Mr. Conn to ensure that they actually qualify for the benefits that this judge approved. Thus far, there has been no indication by SSA that such a review will occur.

  Lastly, the U.S. Department of Justice has had access to much of the information contained in the report for over a year and has taken no action. No criminal charges have been filed and the U.S. Attorney’s Office gave notice in 2012 that they would not intervene in the civil action filed by two whistleblowers who are former employees of the West Virginia Social Security Office. DOJ’s inaction is inexcusable in light of the enormous amount of readily available evidence in this case. While DOJ sits on the sidelines, the whistleblowers and their attorneys continue in their quest to see that Conn and his cronies pay for the damage they have caused and will cause to those who actually need and are entitled to disability benefits.

  Unless proactive steps are taken by Congress and these agencies, wrongful payment of benefits will continue to soar until the program has nothing to disburse to those the program was intended to serve.

  About the author: Katherine Green Robertson serves as senior policy counsel for the Alabama Policy Institute (API). API is an independent, non-profit research and education organization dedicated to the preservation of free markets, limited government and strong families. If you would like to speak with the author, please call (205) 870-9900 or email her at katheriner[at]alabamapolicy.org.

  This article was published by the Alabama Policy Institute.