Last month, 75 people were indicted in a Social Security disability benefits fraud ring in Puerto Rico. On September 19th, a subcommittee of the U.S. House of Representatives Ways and Means Committee held a hearing on what had happened.
A former Social Security employee and three doctors allegedly conspired to falsify records claiming that individuals qualified for Social Security disability payments. Once the individual received a lump sum payment, the conspirators skimmed a share of the money. These four individuals and 70 recipients of benefits were arrested, and more arrests may follow.
At the hearing, it was learned that allegations of fraud were first made in 2009 and 2010. The Wall Street Journal reported in 2011 that it was easier to get disability benefits in Puerto Rico than in other areas of the country. It said that nine of the 10 zip codes in the country with the highest rates of disabilities were in the territory.
The paper also reported on anomalies in Social Security data in Puerto Rico, where approval rates of disabilty benefit applications tripled in just a few years. A very high proportion of cases were based on “affective disorders.”
It was only after the newspaper’s front page report that the Social Security Administration mounted an intense investigation.
The FBI and the Puerto Rico police joined the New York office of the Social Security Administration’s Office of the Inspector General (OIG) in its investigation. After two years of work — more than three and a half years after the first allegation — they were able to arrest and file charges against the alleged culprits.
A timeline of the events is available in the OIG testimony before the Ways and Means committee.
While the OIG’s statement at the Ways and Means committee hearing listed investigations that agents had undertaken in Puerto Rico, they admitted that they had tried unsuccessfully to establish an investigative unit in Puerto Rico in 2000. They defended the length of time involved in the investigation, referring to the large amount of money involved and the issues they faced in conducting their investigation.
Legislators were not all satisfied with this explanation.
Some had already expressed concerns about the Disability Insurance program, suggesting that it is too vulnerable to fraud. The OIG took the position that their success in breaking the Puerto Rico fraud ring is evidence that its system of investigating fraud works.
However, The Wall Street Journal reports that its interviews with experts and examination of data indicates that the Disability Insurance program is administered unevenly.
The paper quoted U.S. Representative Sam Johnson (R-Texas) as saying, “”That such fraud could occur in the first place raises serious and troubling questions regarding Social Security’s management of the disability program.” They also report that in 2011, following their story on the subject, the Social Security Administration defended its operations in Puerto Rico, “saying it was rigorous and accurate.”
The real problem is that the Social Security Administration has viewed Puerto Rico as a special case, not just another U.S. jurisdiction. As recently as 2011, it claimed distinctions with respect to the territory — not, as the data clearly suggested, a place where Social Security was missing signs of fraud. Even in defending its late action on the problem, officials cited ‘cultural and linguistic’ issues — indicating that it was not equipped to address problems in a community of U.S. citizens with a population of nearly 3.7 million.
Additional resources to combat fraud could have been helpful. As PUERTO RICO REPORT has noted regarding the Federal response to drug-related violence in the territory, Puerto Rico’s lack of congressional representation often means that resources never make it to the islands, resulting in an increase in problems.
Puerto Rico’s territory status, sometimes misleadingly called “Commonwealth,” has in this case led to millions of dollars in losses for the U.S. Government. In other cases, it has led to losses for the Puerto Rican people. Equal treatment of and attention to Puerto Rico could prevent both problems — and this can only come with statehood.