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Staff cuts halt probe of welfare fraud cases

By David Abel, Globe Staff, 4/22/2002

The state has stopped investigating all new reports of welfare fraud, with about 1,500 new cases untouched since last month,when Acting Governor Jane Swift drastically cut the number of fraud investigators. On March 1, looking to offset the state's budget crunch, Swift slashed the number of investigators at the Bureau of Special Investigations from 68 to five, a steep cut on top of the dozens of investigators laid off in recent years. The governor also announced that she intends to reduce the bureau's budget from more than $5 million last year to less than $450,000 next fiscal year. ''It's absolutely nuts,'' said David Hemenway, a 21-year veteran of the bureau and one of the five remaining investigators. ''We can't do our jobs; we don't have enough people. Not only is the state losing the ability to deter fraud, it's losing the revenue we bring in - which is more than it costs the state to pay us.'' Now, hundreds of boxes stuffed with files from cases around the state are piling up atop rows of empty desks in the bureau's central office in South Boston. The phones there ring constantly, but no one has time to answer calls. And when several investigators take vacation at the same time, as occurred this week, foiling welfare fraud is practically impossible, staff members say. Over the past month and a half, instead of staking out families illegally collecting public assistance, Hemenway and his colleagues have driven from Pittsfield to Worcester to Hyannis to collect files from about 25 bureau offices. They have also appeared in courtrooms across the state - as many as 10 times in a week - to prevent judges from dismissing ongoing cases. The effort hasn't always succeeded. Three weeks ago, when one of the bureau's laid-off investigators failed to show up for a hearing, a judge in Haverhill decided to drop charges against a 27-year-old welfare recipient accused of bilking taxpayers of $51,000. Investigators say they recently reinstated the case. The lack of investigators has riled prosecutors across the state, who rely on them to prepare and oversee thousands of welfare fraud charges every year, and as many as 1,500 since March. Middlesex District Attorney Martha Coakley sent a letter to Swift last month urging her to reconsider the cuts to the welfare fraud unit. Without the investigators' help, she wrote: ''We will be unable to prosecute those who intentionally defraud the Commonwealth. Many, if not all, of the welfare fraud cases currently pending may not be pursued, resulting in the loss of revenue to the state.'' Investigators say the state receives $3 for every $1 it spends on the bureau. Nearly 50 percent of the welfare applications they investigate are rejected, they say. And every year they help convict hundreds of people who commit welfare fraud, earning the state millions of dollars in court-ordered restitution and reimbursements from the federal government. For officials at the Department of Transitional Assistance, which oversees the welfare program and has seen 14 percent of its own staff cut in the past two months, the growing number of uninvestigated reports of fraud is troubling, especially as the welfare caseload rises with the economic downturn. ''It's just very frustrating right now,'' said Dick Powers, a department spokesman. ''We hope the problem is resolved soon - something has to be done. This situation can't last.'' Despite bipartisan calls in the Legislature for restoring many of the investigators' jobs, administration officials justify cutting the bureau's staff and say they have no plans to change their decision. Because the state's welfare caseload has dropped by more than half since welfare reform laws took effect in the mid-1990s, falling from a peak of 102,993 in 1992 to 46,915 cases last month, the administration argues it needs fewer investigators. The declining caseload, they say, has resulted in a drop in welfare fraud cases by more than 80 percent. Moreover, Swift officials argue, new technology and increased cooperation among states in recent years has made it more difficult for people to take advantage of the system. In 1997, for example, the state introduced an electronic benefits system that requires nearly all welfare recipients to use a photo ID to receive payments. Officials also dispute the financial benefit of the investigators, saying the majority of the court-ordered restitution is never collected. ''No one is happy about layoffs, but we feel the staffing is now appropriate,'' said James Borghesani, a Swift spokesman. ''With the steep reduction in welfare cases, we think this is the appropriate action in a time of fiscal hardship.'' Many lawmakers don't agree and some are organizing an effort to restore the investigators' jobs. They contend that the administration's decision is sending the wrong signal to welfare recipients - and that the cuts could violate the law. To be eligible for federal money, Congress requires states to investigate welfare fraud. ''I think this is just very shortsighted of the administration,'' said state Senator Therese Murray, a Plymouth Democrat and member of the Ways and Means Committee. ''This is the wrong place to cut. We are losing money because the investigators aren't working.'' She and others point to the amount of money the federal government reimburses the state each year for successfully prosecuting hundreds of welfare cases. From 1998 through 2001, the government reimbursed the state more than $16 million. ''This is a major mistake, a huge problem,'' said state Senator Richard Tisei, a Wakefield Republican and assistant minority leader. ''It's a major retreat and a step backward. It could shake the very foundations of the entire Welfare Reform Act.'' For Bruce Carmichael, one of the investigators laid off, it's also about a paycheck. The 20-year veteran of the Bureau of Special Investigations is collecting unemployment, job hunting, and, as president of the investigators' union, lobbying legislators to override Swift's decision. He said that in addition to catching hundreds of people with bogus welfare claims, the bureau has helped state and federal authorities catch hundreds of fugitives and bust others for everything from illegally selling food stamps to defrauding state medical assistance programs. ''We are trained investigators,'' Carmichael said. ''You can't replace that kind of knowledge with a computer. The state shouldn't use our success against us.''

David Abel can be reached at

This story ran on page A1 of the Boston Globe on 4/22/2002. Copyright 2002 Globe Newspaper Company.