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How big bankers profit from food stamps

Posted By -NO AUTHOR- On 11/08/2013 @ 8:26 pm In Front Page,Money,Politics,U.S. | No Comments

J.P. Morgan Electronic Financial Services is the country’s single biggest food stamp services provider, and at the same time is giving increasingly large donations to the very politicians in charge of the food stamp program.

This common incestuous relationship, along with the food stamp chaos recently seen across the country, highlights the corruption of America’s “ruling class,” charges Boston University professor emeritus and bestselling author Angelo Codevilla.

Fifteen percent of the American population – a record high 47 million Americans – uses food stamps. That is 52 percent greater than the number of food stamp users in 2009.

As the Government Accountability Institute reports, “Every month [J.P. Morgan] is paid a fee for each individual enrolled in the [food stamp] program.”

Chris Paton, head of J.P. Morgan’s public sector benefits payment business, told Bloomberg News, “We are delivering a very useful social function.” But some experts strongly disagree.

Rachel Sheffield, a policy analyst for the Heritage Foundation, contends that corporate involvement in social services is partly responsible for the overall growth of the welfare state.

“As welfare grows, it influences more and more people, corporations and sectors of society. Special interests become connected to the growth of the welfare state,” she said.

“Food stamps are one part of the entire welfare system, which is now made up of over 80 federal programs providing social services.”

The programs, she insists, are failing the poor.

“Today, poverty rates have remained stagnant, while self-sufficiency has decreased,” she noted.

Codevilla told WND that “many on the right bewail redistribution of income to the poor.”

“But they miss a crucial point,” he said, “namely that while the poor each get a pittance out of each scheme of redistribution, the benefits flow in a concentrated manner to the non-poor but well-connected folks who administer the programs.”

Referring to the food stamp surge of funds, he said the “ruling class are the real beneficiaries.”

“They don’t act out of concern for the poor, but rather massively to feather their own nests,” he said.

Codevilla is author of the much-discussed essay, “America’s Ruling Class And the Perils of Revolution,” and the book, “The Ruling Class: How They Corrupted America and What We Can Do About It.”

He is not the first to notice this characteristic of the American elite.

In his 2004 book “Who are We? The Challenges to America’s National Identity,” Harvard political scientist Samuel Huntington warned that an increasingly cosmopolitan elite was becoming more liberal, less religious and less patriotic than ordinary Americans.

Others, such as New York University professor of public policy Larry Mead, believe that J.P. Morgan and similar corporations “are merely processors.”

“They aren’t promoting dependency,” he said.

Feeding the food stamp system

Using the political system, J.P. Morgan donates money to key officials who oversee the food stamp program. After J.P. Morgan began to profit from the food stamp business, officials doubled their donations to congressional committee members who oversee food stamps.

House and Senate Agricultural Committee members control the Department of Agriculture, which is in charge of the Supplemental Nutrition Assistance Program, or SNAP, the bureaucratic title for food stamps.

According to the Government Accountability Institute, between 1998 and 2002, J.P. Morgan’s total contributions per election cycle averaged $82,897.

After J.P. Morgan entered the EBT services market, up to the 2010 election cycle, its average donation per cycle more than doubled to $215,120, the GAI said. The contributions were targeted to the agricultural committee members who had significant influence over the food stamp program.

The New York Times called J.P. Morgan CEO Jamie Dimon “Obama’s favorite banker.” Reuters news service describes Dimon as a “lifelong Democrat from Chicago.”

Wages of welfare

J.P. Morgan Electronic Financial Services is the country’s single biggest EBT services provider. Xerox Corporation owns the second largest EBT service provider. Xerox and Wal-Mart are currently trading accusations about who is responsible for the food stamp shopping spree that occurred in Louisiana last month.

Other large corporations have recognized the profits to be made from food stamps. Wal-Mart CEO Bill Simon has spoken of the unique “environment” created by food stamps, along with the business community’s “responsibility to figure out how to sell in that environment” and to “figure out how to deal with what is an ever-increasing amount of transactions being paid for with government assistance.”

Providers like J.P. Morgan make money off of food stamps in several ways. They rent out Point Of Sale (POS) machines, which are used to make Electronic Benefits Transfer (EBT) purchases with Supplemental Nutrition Assistance Program (SNAP) funds and transmit the purchasing information.

Food stamp service providers like J.P. Morgan also make money from food stamp-related ATM fees. Such fees are sometimes charged when people use an EBT card to withdraw the cash provided by the Temporary Assistance for Needy Families (TANF) program.

Critics of food stamp expansion argue that the program fuels a “boom-and-bust cycle,” in some areas, causing government dependency, generational welfare use and the slow unraveling of communities.


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