Firmer Rules on Refugee Welfare Fraud Urged

Federal, state and local officials, responding to reports of widespread welfare fraud among Southeast Asian refugees in California, are calling for stronger law enforcement and increased community education to combat the problem.

While agencies at all three levels of government still differ over the scope of the problem, several officials now say that new approaches are needed to deter a large number of refugees who are supplementing welfare benefits with thousands of dollars a year in unreported wages.

In a list of proposals to be forwarded Friday to the Los Angeles County Board of Supervisors, a countywide task force on refugee welfare fraud will urge more vigilant law enforcement and better education for refugees about their responsibilities as welfare recipients and the penalties for fraud.

At the same time, state refugee officials will send their own list of recommendations to the regional headquarters of the Office of Refugee Resettlement in San Francisco, the federal agency responsible for refugee programs.

Discussions Held

Walter Barnes, chief of the state’s Office of Refugee Services, said he has met with state welfare investigators and has discussed the problem of welfare fraud with local officials and refugee representatives. He would not elaborate on the state’s proposals except to say that they also will emphasize a combination of law enforcement and refugee education.

“We’ve got some things in place that are supposed to deal with the prevention, detection and prosecution of fraud,” Barnes said. “We have to determine if those procedures are still sufficient.

“It’s no longer a question of whether we’re going to do something to counter refugee welfare fraud, but what are we going to do and how can we do it most effectively.”

He added: “Some of the things we’re going to do will entail getting people out there to inform on other people. By their very nature, we can’t discuss those things publicly.”

Government officials began examining the problem of refugee welfare fraud after articles in The Times in February documented a vast underground economy in which thousands of Southeast Asian refugees throughout California are earning unreported cash wages while receiving welfare payments.

Task Force Ordered

On Feb. 17, the county Board of Supervisors directed the chief administrative officer to form a task force of welfare officials and refugee representatives to develop ideas and recommendations on ways to combat the illegal activity.

A week later, federal resettlement officials asked Barnes to begin a formal inquiry into the extent of the problem statewide. This was followed by a request for a federal investigation in a March 9 letter from Sen. Pete Wilson (R-Calif.) to Richard P. Kusserow, inspector general of the U.S. Department of Health and Human Services, which oversees the federal resettlement agency.

The inspector general’s office and the federal resettlement agency, which have joined forces in the matter, are awaiting a detailed response from the state before taking further action.

“The Office of Refugee Resettlement is extremely disturbed at the seriousness and the apparent scope of the alleged fraudulent activities,” Sharon Fujii, regional director of the Office of Refugee Resettlement, said in a letter to state refugee chief Barnes in February.

“Perhaps more troubling is the allegation of the apparent complicity on the part of the (refugee) eligibility workers, and the inaction on the part of (refugee) service providers and high-level county welfare department workers.”

Fujii recommended that the state consider several steps. These included getting responses from the respective counties about the need to investigate and, if warranted, correct the problem; informing all welfare eligibility and private resettlement workers of their responsibility to report such fraud, and providing hot lines and fraud and abuse contacts at the local level.

Barnes said the state had failed to respond to federal officials before a March 20 deadline because of the difficulty in determining the extent of the fraud.

“This is a big issue, a complicated issue. It’s not something we can just go out and put together a plan quickly,” Barnes said.

“The responses we’ve gotten back are very different. Some local officials say the fraud is every bit as massive as alleged in The Times articles. Others say it’s not a problem at all.”

The Times reported that 50% of California’s estimated 400,000 Southeast Asian refugees, or 43,500 families, are fully reliant on welfare, according to state figures. As many as half these families have one or more members working illegally in the underground economy, according to a number of government officials, private resettlement workers and refugees who are supplementing welfare payments with unreported wages.

Refugee View

Refugees say that legitimate but low-paying jobs for which they have been trained hold little attraction when they can take in considerably more by combining welfare benefits, Medi-Cal and unreported income.

The underground economy thus has given Southeast Asians, who make up 90% of the state’s refugee population, a compelling reason to remain on welfare for several years. State studies show that nearly three of every 10 refugee families on public assistance have received aid for a period ranging from four to 10 years.

Government officials and private resettlement workers acknowledged that the underground economy is not only costing the government millions of dollars in welfare fraud and lost tax revenues but has helped create the highest welfare dependency rate in the nation for Asian refugees.

In addition, several welfare case workers who are Indochinese said in interviews that they frequently know when a Southeast Asian family is earning cash from an underground job. But almost always they choose not to investigate, citing cultural reasons and the difficulty of making a successful case against a family.

But some local welfare and refugee resettlement officials say they believe a heavy-handed response by state or local authorities would only push refugees in the underground economy to further conceal their illegal activities.

Stress on Education

An emphasis on less punitive measures has been reflected in the list of recommendations the local task force will forward to the board Friday for discussion and possible implementation.

“Most of the recommendations are geared toward educating refugees, informing them about what is right and wrong and the penalties they face,” said Than Pok, a task force member who heads the United Cambodian Community, a Los Angeles and Orange county job training and social services agency.

“If we start coming down with a heavy stick, the refugees will begin to fear the same agencies that are designed to help them.”

Bill Reyes, who oversees the county’s welfare fraud bureau and heads the task force, said that at least two of the proposals are enforcement-oriented.

“In my personal opinion, they will be quite effective,” he said.