Des Moines Register
07-24-07
Report: U.S. pays deceased farmers
Nearly 173,000 dead people were paid $1.1 billion between 1999 and 2005.
By PHILIP BRASHER
REGISTER WASHINGTON BUREAU
Washington, D.C. - Death is no barrier to collecting farm subsidies.
The government paid $1.1 billion in subsidies to 172,801 dead individuals
between 1999 and 2005, according to a report by the Government Accountability
Office, the investigative arm of Congress. Forty percent of the money went to
people who had been dead at least three years.
Under federal rules, such payments can be perfectly legitimate so long as the
dead farmer's estate hasn't been settled.
However, the U.S. Department of Agriculture sometimes doesn't know when a
farmer dies. Even when it does, the USDA has inadequately policed the estates
to ensure the heirs aren't using them as a method to circumvent the limits on
payments to big farms, the investigators said.
"Every farm business has a duty to tell USDA who is actively participating in the
farm," said Sen. Charles Grassley, R-Ia., who requested the GAO report. "It's not
fair to the farmers in the field and playing by the rules when others are, at the
very least, untruthful of their farming arrangement."
As a result, the report concluded that the USDA "cannot be assured that millions
of dollars in farm payments are proper."
In a case involving an Illinois farm, the USDA made $400,000 in payments from
1999 through 2005 in the name of someone who died in 1995, the report said.
The business entity that operated the farm failed to notify the USDA of the death.
The department is now seeking to get the money back.
Nineteen percent of the subsidies to deceased farmers went to individuals who
had been dead at least seven years, the GAO said.
The GAO studied 181 farm estates that had been open for more than two years
and found the USDA had not done the required annual reviews on 73 of those.
As part of the study, the GAO investigators reviewed a single Iowa estate and
decided the USDA adequately monitored it, said Lisa Shames, who led the GAO
study.
Under USDA rules, an estate is allowed a two-year grace period to continue
receiving subsidies while lawyers and accountants settle the deceased farmer's
affairs. Payments can continue even longer if there is a legitimate reason to keep
the estate open, such as a dispute among heirs.
However, USDA officials are supposed to review such estates annually to make
sure the heirs aren't keeping the estate open as a way to collect more in
subsidies than their farm would otherwise be entitled to under payment limits.
"What bothers me is that USDA is not following their own rules to verify that,
once you get beyond the two-year period, that the estate is still open for a
legitimate reason," said Roger McEowen, an agricultural law expert at Iowa
State University.
The GAO report will be a subject of a hearing by the Senate Finance Committee
today. Grassley, who is the committee's ranking Republican, is a vocal critic of
subsidies to large farms and has questioned whether subsidies to large farms are
being taxed properly.
On May 31, USDA field offices were ordered to review all estates that had been
in existence for more than two years. State USDA offices are due to report the
results by the end of August.
The USDA also plans to link to the Social Security Administration's database so
that the department finds out when a subsidy recipient has died instead of relying
on the farmer's relatives to report the death. The GAO used Social Security to
come up with the $1.1 billion figure.
"Unfortunately, recovering the $1.1 billion is like locking the barn door after the
horse is already out," Grassley said. "But I don't think it's too much to ask that
USDA talk to the Social Security Administration to match their death files before
the next batch of checks goes out the door."
The department believes that most of the $1.1 billion in subsidies were proper,
said John Johnson, deputy administrator of the USDA's Farm Service Agency.
The total represents less than 1 percent of the subsidies the USDA paid from
1999 through 2005, he said.
"We don't have any indication that open estates are being used in any
widespread fashion to avoid payment limitation rules," Johnson said.
The chairman of the Senate Agriculture Committee, Sen. Tom Harkin, D-Ia., said
the report showed that controls on farm subsidies are lax.
"We cannot afford to continue sending taxpayers' money to people who don't
deserve it, or in these instances aren't even alive," he said.
Reporter Philip Brasher can be reached at (202) 906-8138 or
pbrasher@dmreg.com