Transparency Watch: The Argus Leader's legal battle with USDA over food stamp data

By Jonathan Ellis, Argus Leader

Here’s a novel idea: If you take money from the federal government, the public should know how much you’re taking and for what.

That basic premise is at the heart of the Argus Leader’s lawsuit against the United States Department of Agriculture. The paper filed suit in 2011 seeking to force the department to turn over records of how much each business that participates in the food stamp program has earned from food stamps over the last five years. The lawsuit would force the disclosure of those records from more than 300,000 grocers, super stores, gas stations and other businesses that have voluntarily signed up to exchange food for government payments.

The journey to get those records has been long, and it currently resides at the 8^th Circuit Court of Appeals.

It started with my former colleague, Megan Luther, who is currently a trainer for IRE. She was curious about what kinds of foods people in the Supplemental Nutrition Assistance Program were buying with their benefits. Because almost all of those transactions occur with an electronic benefits card, she figured there might be data on food purchases.

There aren’t. Food purchases aren’t tracked by USDA. As an aside, USDA is currently studying purchasing habits. Last year, I requested the monthly progress reports from the firm retained to do the study. USDA sent me more than 30 pages of reports – almost all of it redacted.

Starting in the summer of 2010, Luther began making freedom of information requests. By the start of 2011, we had assembled a national database that showed the explosive increase in businesses signing up to participate in the program over a five-year period. As the number of people in the program expanded, businesses were signing up to capture some of the revenue from food stamps, which now costs $80 billion a year.

I wanted to know how much each of those businesses made over the years, but the department denied my freedom of information request. I appealed. And waited. And waited. As winter gave way to spring, and spring gave way to summer, we heard nothing on the status of the appeal. Our attorney, Jon Arneson, started badgering USDA for a response. When we didn’t get one, we went to court.

In August of 2011, Luther and I did a three-story package on food stamps. The main bar documented the rapid increase in the number of businesses that had signed up to take money from the federal government via food stamps. A second story was about our lawsuit to free up the records that USDA refused to release. The third was about how fast food companies were lobbying Congress to loosen the rules by allowing them to participate in the program – a version which also ran in USA Today.

USDA argues that it is prohibited by law from disclosing the records. When Congress created the modern food stamp program in the 1970s, it authorized the department to collect certain records from businesses signing up to accept the benefits. Those records, including employer identification numbers and sales amounts, were required to help the department verify that businesses were legit. The statute prohibited USDA from releasing the information.

In other words, it’s a withholding statute. We don’t disagree. But we argue that the amount of money businesses receive each year from food stamps isn’t included in the information the department collects when it’s enrolling a business into the program. After all, if a business is signing up to participate in the program, it doesn’t have revenue from food stamps.

The strongest legal position, in my mind, that USDA has with this argument is when a business re-enrolls, which happens every five years. The department asks each business for its sales figures. Obviously, food stamp revenues would be included in their sales amounts.

Still, food stamp revenues are only a fraction of the total sales that re-enrolling businesses report to USDA. The Argus Leader didn’t ask for the gross sales of these businesses, just the amounts they get from accepting food stamps. USDA doesn’t request that a business submit food stamp revenues when it re-enrolls, because the department already tracks those amounts. Thus, we believe that information is not included in the withholding statute.

Unfortunately, a federal district court judge in Sioux Falls sided with USDA’s interpretation of the issue. So we appealed to the 8^th Circuit.

There are important public policy questions at play here. Food stamps are one of the most important safety-net programs offered by the federal government. But we have to keep in mind that the program was forged in the 1960s and 1970s. Hunger and poverty still exist, of course, but the characteristics have changed over the decades. Now, for example, studies show that the poor have higher rates of obesity and the accompanying maladies of obesity.

We don’t know how food stamp benefits contribute to that problem. Thanks USDA for those redacted reports! And while sales information for each business doesn’t answer these questions, it’s a start. How much money is spent at gas stations, which aren’t known for their healthy offerings? Are gas stations in urban food deserts raking in the money? And what about big corporations? How much are they pocketing from taxpayers, and what is their influence on the debate over food policy? Farmers’ markets are getting into the game, as well. For those who are concerned about nutrition, this is a welcome trend. But how widespread is the trend?

Finally, the data can help pinpoint instances of fraud. Why does one gas station report a huge amount of food stamp sales when the one on the next corner reports a much smaller amount?

The public deserves some answers for an important program that costs the public a lot of money. And so, to use a little highfalutin legal jargon reserved for the end of a brief, we hope and pray the judicial system agrees.

Jonathan Ellis is a projects reporter for the Argus Leader and a correspondent for USA Today. He joined the Argus Leader in 2005.