by Matt Taibbi
This is the kind of person at whom the weight of the state’s financial fraud prosecution apparatus tends to be trained in America. Markisha entered the financial fraud patrol zone when she walked through those doors at the FRC. For three hundred dollars a month, she was about to become more heavily scrutinized by the state than any twelve Wall Street bankers put together.
The amounts of money spent in these kinds of welfare programs are very small, but the levels of political capital involved are mountainous. You can always score political points banging on black welfare moms on meth. And the bureaucracy she was about to enter reflects that intense, bitterly contemptuous interest. Markisha was walking into a vast, machinelike system that is not only more or less designed to produce felony fraud convictions, but is also amazingly effective at a second goal—letting her know exactly what voters out there think of her.
On the day she goes to sign up for CalWORKs, Markisha knows to show up early. Friends she knew who’d been in the system had warned her: get there early. Get there way before the doors open. You’ll see why when you get there, they told her.
In the neighborhoods people talk. Some welfare offices are more notorious than others. In San Diego I heard over and over again that the Lemon Grove office was the best. Sometimes, people say, you can see a counselor at Lemon Grove in less than an hour—you might not even see people yelling and screaming. The Market Street office, on the other hand, has a bad rep. Same with the Seventy-Third Street office. The problem is, you can’t choose which office to go to. It depends on your address. And Markisha’s address puts her in the Seventy-Third Street group.
On the morning of October 15, 2011, she shows up at the Seventy-Third Street office at 8:30 a.m. It’s a giant hall with linoleum floors and plastic chairs—exactly what you’d expect, like a DMV, only even more depressing. There’s already a huge line of people.
“People were standing up against the walls, there was people everywhere, all over, it was crazy,” she says. The drill is, you show up, take a number, and wait—and wait. Markisha takes her number and sits down.
An hour passes, two hours. She has no idea when anyone is going to see her, and all the people in the packed room are in the same boat.
Mothers with children are in the office, and by late morning the children are starting to get antsy because they haven’t eaten, but you can’t leave the place or you lose your spot in line. A chill goes through the room in the middle of the day when a woman steps outside the building to get a smoke and returns to find that her number has been called. She has to leave and come back another day.
More hours pass. Markisha is squirming in her seat. By the late afternoon the crowd, which not only hasn’t subsided over the course of the day but has just gotten bigger, is turning hostile. At around three in the afternoon there’s a screaming match somewhere in the recesses of the office. Markisha can hear a man yelling at a welfare worker because a glitch in the system has cost him his benefits; something about a wrong address, which they’re telling him they can’t fix. He storms out of the office to oohs and aahs. By then the place is a zoo. “The kids is running around, because they hungry,” she says. “They’re running around, snatching stuff off the walls, drinking water, screaming.”
The scene gets so intense, Markisha ends up pulling out her cell phone and taking a video panorama of the chaos. Nobody even blinks when they see her standing up filming the nightmare. You see all kinds of stuff in here: Who cares about some girl filming something?
More hours pass. It’s after five now. A young Latin man just ahead of Markisha goes in and just as quickly is dragged out by security when he explodes at a worker after finding out he can’t get his food stamp card—Markisha doesn’t know why. “I’ve been here since eight o’clock in the morning and I’m still here after five o’clock!” he shouts. “I’m just coming for my EBT card! I need my EBT card!”
Security drags him past Markisha, chucks him out the door. “I was like, dang,” she says. “I didn’t know what to think.” Finally, at 5:30, after nine hours, Markisha is shown into an office where a bored-looking older black woman stares blankly at her from behind a mass of papers.
“Let me tell you something right away, honey,” the woman says. “We got two whole rooms of papers right behind us here. Two rooms of applications to go through. So it’s going to be forty-five days before you get your benefits.”
By law, forty-five days is the maximum period of time the state can take before processing benefits. Markisha needs the money yesterday, but whatever; she knows enough not to say anything. She answers the woman’s questions. How many people live in your household? What’s your income? How come you can’t get a job?
Then the whopper. “How much,” the woman asks, “is your baby daddy giving you a month?”
“My what?” Markisha says.
“Your baby daddy,” the woman repeats. “He giving you money or not?”
Markisha answers: he is not. By the time the woman finishes with her, Markisha is in a panic, but she’s been approved for benefits. Go home, they tell her, and wait for someone from the DA’s office to search your home.
Wait when?
Just wait, they tell her.
Trying to get on welfare is like trying to get Rolling Stones tickets in the 1970s—you have to camp out in front of the entrance long before the ticket window opens. You go there, you take a number, then you sit all day long while people scream and yell all around you. If you have kids, you have to bring their lunches and you have to be careful about when you take them to the bathroom, because you might miss your call. “It’s worst in the afternoon,” says Anna Alvarez, a twenty-one-year-old with a newborn baby who applied for benefits with her husband, Diego. “The kids get hungry and they start screaming and acting out.”
Some people I interviewed went to the FRC and went through this all-day-in-a-DMV-from-hell process three and four times before they even got their initial meeting.
But the kicker is, if you get all the way through the process, and actually get your meeting, and you get approved, they then tell you to go home and sit tight for your P100 search. And they don’t tell you when that will be, except to say that it’s generally within a week and a half. You then have to be at home at all times until they show up—it’s like sitting shivah, except you have to do it for more than a week.
“If the investigator shows up and no one’s there,” says Halpern, “they shove a card under your door that says, ‘We could not verify your eligibility,’ and you don’t get your benefits.”
The couple Diego and Anna handled their vigil in shifts, with one staying at home at all times, and the other, usually Diego, going out to work (he works at a Little Caesars) or to buy groceries. In their case, the investigator showed up six days later. In Markisha’s case, it was only a few days, but she had a problem: she was attending a court-ordered recovery program at eleven a.m. every Wednesday. It was literally illegal for her to miss the class; she could face charges. She explained this to the people at the FRC, but they weren’t interested. Right on cue, the investigator then showed up at 10:30 a.m. on that following Wednesday. He’s an older white guy, about fifty years old. He knocks, steps just barely inside the apartment, and takes a quick look around.
“You sure you don’t live here with the baby’s father?” he says.
Eric had just come by to take their son to school. The boy wasn’t home. The investigator doesn’t like this.
“I don’t think you’re really living here with your son,” he says.
Again, this is a constant feature of the welfare application process. Literally every single person I interviewed in San Diego at some point had a caseworker or someone from the DA’s office accuse them of lying within minutes. One woman named Selena, a quiet twenty-eight-year-old from Mexico who cleans houses and lives with her elderly mother, met the investigator by chance, coming home from work cleaning apartments just as he was leaving—Selena’s mother had let him in. The investigator asked S
elena where she had been.
Cleaning houses, she said.
Yeah? the investigator asked. How much did you make?
Selena opened her wallet and showed him: $120. That money was for four apartments, she tried to explain, but he wouldn’t hear it. The investigator chirped that the going rate for an apartment cleaning was sixty bucks. Apparently he was speaking from experience haggling with maids.
“You’re lying to me about that money,” he said. “You didn’t earn that much cleaning apartments.”
Selena is meek, quiet, a little stout, and looks very much like someone who cleans houses for a living. The investigator, within minutes of meeting her, was accusing her of … what? Hooking? Selling crack?
Back to Markisha’s home search: the investigator didn’t like the absence of the child, despite the fact that it was 10:30 a.m. on a school day. She was sharing the apartment with another tenant, a local barber, but the investigator didn’t want to see his room. In fact, he didn’t want to see Markisha’s room, which had two beds in it, one for her and one for her son. He just stood in the doorway, looking around.
“I asked him if he wanted to see my room,” Markisha says. “But he said no. He just stood there.”
After a few minutes, the investigator jotted a few notes down, clicked his pen, and turned to walk out the door. “Okay,” he said. “That’s my investigation.”
Just like they don’t tell you when they’re coming, they don’t tell you what their investigatory conclusions are. Markisha had to wait. A few weeks later she found out she was rejected—because the investigator didn’t believe she was living with her son.
Now she’s appealing the decision. In the meantime, she lost her apartment and is living with her aunt. Technically speaking, however, she’s temporarily in a safer place than applicants who immediately pass the search process. She dodged a bullet in the sense that the state decided she was lying before she started getting her checks. Once you start actually collecting benefits, you get put on the clock for a fraud case.
The couple Diego and Anna, for instance, were doing everything right. They are both bright, fit young kids; Anna is petite and cherubic, and Diego is on the shorter side but clean-cut, engaging, and good-looking. They met at the gym in the first months of 2011 and quickly fell in love. In the summer, they discovered Anna was pregnant, but they were not panicking then. Both were working, at the only sorts of jobs really available to young people in America—Anna at a Carl’s Jr., and Diego at a Panda Express. Diego actually had gotten a raise at Panda Express and was doing well.
“I was making pretty decent money there,” he says. “We were doing okay.” And though Anna had to ride on the bus for two hours in each direction to go to her job at Carl’s Jr., she was managing.
“We were able to pay our rent,” she says.
But then Panda Express downsized and Diego lost his job. And Anna, growing more and more visibly pregnant, was not going to be able to keep working the night shift at Carl’s Jr., with two-hour bus rides each way. So late in 2011, they made a fateful decision, to go on benefits, to help them at the very least through the birth of the baby.
Diego had immigration status because his mother had been the victim of extensive domestic violence. The Violence Against Women Act of 1994, signed into law by Bill Clinton, gave temporary immigration status to the victims of domestic violence, for the simple reason that in many immigrant households, abusive husbands prevent their wives and children from going through the naturalization process as a way of keeping power over them. (Selena, the house-cleaner, fell into that category.) So when the husband is removed from the home, his wife and children are given temporary status and immediately qualify for benefits.
Diego had had his U visa since 2006 and had qualified to receive his own benefits as an adult for two years, but he was only now applying, and he was only applying for food stamps. Anna, meanwhile, applied for the full CalWORKs package, which included cash aid and food stamps. They went into the Market Street FRC in December 2011, and initially everything seemed fine. “The woman was really nice,” Anna says. “We had no problems at all. She told us we qualified.”
You have to be so poor as to have nothing at all to qualify for welfare. In California, to qualify for benefits, you can’t have more than $2,000 in assets to your name. If you have a car, the car can’t be worth more than $3,000. The actual equation for income level in California is complicated, but put it this way: a hypothetical family of three, like Diego and Anna would soon be, cannot have a gross income of more than $714 a month and still qualify for CalWORKs. The math is too involved to list here, but if you’re getting benefits, you have to know those formulas like the back of your hand.
Why? Because when you apply for CalWORKs, they hand you a very involved application form, and this form becomes the legal bible by which you must live, on pain of prosecution. The CalWORKs cover sheet/application comes with a snappy little Orwellian logo at the top of the first page, a cutesy drawing of a small pile of dollar bills surrounded by the words:
WORK PAYS
In so many ways
The form goes on to give a summary of the benefits process (you receive a more detailed package of all the rules separately) and contains a lengthy passage about the consequences of lying to the state. You are reminded that you must attest to the veracity of everything you write and that you can be jailed for up to three years for lying about getting cash aid and up to twenty years for lying about food stamps (we will find, as we look at the frauds committed at banks and other such companies, that the penalties for fraud seem to increase as the amounts lost get smaller).
You’re also told, ominously, that if there is an overpayment, “you will have to pay it back even if the County made an error.”
You’re then asked to answer nineteen questions, which include things like “How much income does everyone, including children, get or will get this month?” (You find out at another part of the form that the words “You, anyone, everyone” in welfare applications all mean “any and all persons who live in your home.”) You’re asked if “your food will run out in three days”; you’re asked if you have an eviction notice “or notice to pay or quit.”
You fill out this form, and then at the bottom you sign your name to the following statement:
I declare under penalty of perjury under the laws of the United States of America and the State of California that the information I have given on this form is true, correct, and complete.
And you keep signing those forms for as long as you have benefits. If you’re on any kind of public assistance, you have to fill out, every quarter, a form called a QR 7, or “Eligibility/Status Report.” In that form you have to attest to all the basic facts of your life—whom you live with, whether you have a car, where you work and how much you earn, and so on. And if any of that information doesn’t jibe with what the state knows or thinks it knows, you get started down the road to a fraud case.
In any case, Anna and Diego signed the form, went home, waited and waited for the P100 search (“A drag because you can’t go out and look for a job,” says Diego), made it through that, and appeared from there to be fine, receiving benefits at the end of the month, as expected.
The sum total of the benefits was $246 in cash for Anna, plus food stamps for both of them. As the New Year rolled around, they began to think they were going to be okay. Diego got another job at another fast food place, this time at Little Caesars (“No delivering—I’m making pizzas,” he says cheerfully), and they were already thinking about the time when they might be able to get off the benefits.
Then they got a letter in the mail.
Welfare applicants all talk in hushed tones about the dread of the mail system. Everyone in the California system has a monster collection of ominous little green forms, and to the last they all tell stories about getting a letter with good news one day that is contradicted by a new letter the next day accusing them of fraud.
This is what happened to
Diego and Anna. Almost immediately after receiving their first month’s benefits, Anna got a letter saying that upon further review, the state had ruled that Diego had not been eligible to receive benefits. Therefore, the notice said, Anna—not Diego, but Anna—now owed the state $148 to compensate for the month of food stamps he had “improperly” received.
The state was wrong—Diego did qualify for the food stamps—but that didn’t matter. Recouping “erroneous” overpayments to welfare recipients has become a craze for states all over the country. In 2010 Barack Obama’s Department of Agriculture lifted a ten-year ban on collecting food stamp overpayments, and states all over the country went hog wild trying to recover lost monies.
For instance, in 2011, the state of Ohio—the same state that lost tens of millions in the early 2000s when its pension fund bought severely overpriced mortgage-backed securities from a Lehman Brothers banker named John Kasich, who would later become governor—tried to recoup some of its losses by sending out 22,000 notices to Ohioans seeking “overpayments” in either welfare or food stamps.
Many if not most of these “overpayments” were actually the state’s own errors, but they went as far back as 1986 anyway, seeking checks as small as $78. A sixty-four-year-old retired construction worker named Dave Jenkinson got a notice asking him to repay $248 for cash assistance he got in the 1980s; if he didn’t pay, it would be withheld from his paycheck.
“They blame me like it’s my fault,” says Jenkinson, who doesn’t even remember getting cash aid.
