Farmers Convicted Of Fraud Still Got Trump Bailout Funds

WASHINGTON ― Some farmers who received payments from President Donald Trump’s farm bailout program had previously been convicted or accused of fraudulently obtaining federal agriculture subsidies.

Three farm operations accused of violating federal farm subsidy rules received more than $300,000 in payments from the $28 billion agriculture bailout Trump launched in 2018, according to data that the Environmental Working Group, a liberal nonprofit that wants to reform farm subsidies, shared with HuffPost.

Farmers are supposed to lose all eligibility for U.S. Department of Agriculture programs if they’re convicted of felony fraud, a department spokesperson said, and they can be barred from other USDA programs for some time if the agency finds violations of crop insurance rules.

The fraud cases are a small but dramatic illustration of how the Trump administration has created generous new benefits for farmers while cracking down on food assistance for the poor, ostensibly because people abuse the benefits when they should be working instead.

The Environmental Working Group’s farm subsidy database, which it compiles annually from formal records requests to the USDA, shows at least three farmers accused — and in two cases, convicted — of fraud among the 600,000 who received payments from the Market Facilitation Program, otherwise known as Trump’s farm bailout.

  • A Kansas farmer convicted of crop insurance fraud in 2019 received $250,000 in MFP payments in 2018 and 2019. The farmer allegedly underreported his 2015 corn crop by thousands of bushels in order to qualify for higher federal crop insurance payments. Though the farmer was convicted last year, sentencing took place this year. The USDA said it was “not permitted to pursue administrative sanctions until sentencing was complete.”

  • An Iowa farmer convicted of crop insurance fraud in 2018 received $13,000 from MFP. But the conviction, for making a false statement in connection with crop insurance, wasn’t a felony. “USDA cannot stop people receiving entitlement programs unless convicted of Felony Fraud,” an agency spokesperson said. (Crop insurance regulations say producers can be disqualified for five years for false statements.)

  • An Illinois farm that paid $5.4 million in 2014 to settle allegations of bilking a commodity subsidy program received $62,000 from MFP. The USDA had no comment on this case.

“That farm subsidy and crop insurance fraudsters can get government checks from president Trump’s bailout underscores just how deeply flawed and rushed out the door the program is,” said Don Carr, a senior adviser for the Environmental Working Group.

President Donald Trump at a rally with local farmers on Feb. 19, 2020, in Bakersfield, California.  (Photo: David McNew via Getty Images)
President Donald Trump at a rally with local farmers on Feb. 19, 2020, in Bakersfield, California.  (Photo: David McNew via Getty Images)

The Trump administration has been generous with programs that help people grow food, but stingy with ones that help people eat, issuing regulations to tighten eligibility rules for food benefits and saying that too many people get help they don’t deserve.

The laxity of food benefit rules is “so egregious that a millionaire living in Minnesota successfully enrolled in the program simply to highlight the waste of taxpayer money,” Sonny Perdue, the U.S. agriculture secretary, said last year.

But the USDA’s Supplemental Nutrition Assistance Program, commonly known as food stamps, may have stricter and more elaborate penalties for fraud than the agency’s various agriculture subsidy programs. If the agency catches someone misrepresenting their economic circumstances in order to win food benefits, they’re banned for a year. Repeat offenses or a felony conviction result in a lifetime ban.

Congress sets policy for food benefits and farm programs as part of a “farm bill” every five years, a political tradition that pairs the interests of poor people and farmers in order to make the legislation unstoppable.

Republicans were unable to win tighter eligibility in the 2018 farm bill, but the Trump administration has been putting some of its proposals into a series of regulations that would trim SNAP enrollment by as much as 10% if finalized.

At the same time, to compensate farmers for China’s tariffs on American agriculture exports, the Trump administration in 2018 launched the $28 billion Market Facilitation Program on top of the roughly $20 billion the federal government already spends on farmers each year. The USDA characterized China’s tariffs as “unjustified,” though they were a predicted retaliation against Trump’s tariffs on Chinese imports.

Carr described the trade assistance as a vote-buying program for the president. Most farmers still support Trump, despite the trade war cutting into their already-shrunken incomes. Meanwhile, the richest 10% of farms received more than half of the bailout funds, according to EWG.

“If, in fact, people convicted of crop insurance fraud are now getting these payments, that certainly doesn’t seem right to me,” said Sen. Debbie Stabenow (D-Mich.). (Photo: Barcroft Media via Getty Images)
“If, in fact, people convicted of crop insurance fraud are now getting these payments, that certainly doesn’t seem right to me,” said Sen. Debbie Stabenow (D-Mich.). (Photo: Barcroft Media via Getty Images)

The USDA said its farm payment programs automatically check for ineligible producers, that applications are reviewed by a second party, and that the agency follows up with spot checks on a percentage of applications each year.

“One of the basic steps taken to minimize fraud in farm programs is to require new producers to present a government issued photo ID to verify their legal name, and if possible, their address,” the USDA spokesperson said. “Producers are also required to present copies of lease agreements or a signed certification from the landowner so they cannot claim to farmland they are not really farming.”

Senate Democrats have complained that the program has disproportionately benefited Southern farmers and even foreign-owned farms, such as the Brazilian meat-processing firm JBS.

Last week, Democrats said the Government Accountability Office, an investigative arm of Congress, would look into their complaints about the farm assistance program. While that investigation isn’t necessarily looking at whether bailout beneficiaries committed fraud in the past, Sen. Debbie Stabenow (D-Mich.), said it seemed inappropriate.

“If, in fact, people convicted of crop insurance fraud are now getting these payments, that certainly doesn’t seem right to me,” Stabenow told HuffPost. “And at the same time that [the USDA is] trying to set these standards and paperwork and bureaucracy around making it harder for people to be able to eat and have access to food.”

The USDA has broad authority to throw money at farmers. The agency patterned the bailout program after existing commodity subsidies, which, like food benefits, include payment limitations, means testing, and work requirements. And farmers are ineligible if they’ve ever committed a controlled substance violation.

But the rules for the trade payments have gotten less stringent. The USDA has increased the payment limit from $125,000 to $250,000 per crop category, and last year started allowing farm households with incomes above $900,000 to participate as long as three-quarters of their income derived from farming.

Federally subsidized crop insurance, which does not have income or payment limits, is the main farm safety net program. Rep. Mike Conaway (R-Texas), the top Republican on the House Agriculture Committee, said last month that one of his greatest fears is a big crop insurance fraud case landing on “60 Minutes” and cratering public support for the program.

Conaway told HuffPost, however, that so long as a convicted fraudster has complied with the terms of their sentence, they should be allowed to participate in farm programs once again.

“You don’t want your reward bad behavior, but by the same token, we’re a nation of second chances,” Conaway said.

CLARIFICATION: This story has been updated to describe the Environmental Working Group as wanting to reform farm subsidies rather than opposing them.

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This article originally appeared on HuffPost.