U.S. Reviews Drought-Aid Checks, Asks Ineligible Farmers for Refund : Windfall: The program was found to compensate farmers for common perils. Critics urge Congress to tighten disaster-relief rules.

The Agriculture Department is rechecking some payments made under the 1988 drought-relief program and congressional leaders are urging policy reviews after the Associated Press found widespread misapplication of funds in the $3.9-billion emergency effort.

One New Jersey farmer has been asked to repay $100,000 after a federal agent read AP reports that checks went to corporations and farmers ineligible for disaster aid. Entire counties in California and New Mexico are being investigated as well, according to the Agriculture Department.

The stories found that the program became a one-time windfall for thousands of farmers outside drought areas whose losses were due to normal quirks of nature. Claims were approved for such common perils as insects, sand, wind, cold and fungus, even “ineffective herbicide”--all of which were outside the bounds of the drought effort.

Rep. Pat Roberts (R-Kan.), a member of the House Agriculture Committee, called the series “a needed story” and said Congress must try to establish safeguards to prevent problems in future agriculture-disaster programs.

“We have to set up some structures,” Roberts said. “That’s why I think the AP series and other examples have been very beneficial. They point up the road we should not take.”

Agriculture Secretary Clayton K. Yeutter said his department’s Office of Inspector General probably will investigate the 1988 relief program and likely will study the stories, which appeared in December.

“The fact is, these kinds of programs are exceedingly difficult to administer, and they have inherent shortcomings,” said Yeutter, who was interviewed recently at a wheat growers’ convention in Texas. “It’s not that people avoided their responsibilities or were cavalier in the implementation; it’s simply that it’s just not an ideal way to deal with this problem.”

The Agricultural Stabilization and Conservation Service, the arm of the Agriculture Department that administered the program, is already checking specific misdeeds mentioned in the stories, deputy administrator Dan Shaw said in Washington, D.C.

The ASCS says, however, that it won’t check beyond the 22 counties in eight states the AP examined in its investigation.

“Those few that I was concerned with, we are checking to make sure corrections will be made,” Shaw said.

Shaw said other counties won’t be studied because ASCS officials don’t believe serious problems exist nationwide.

But Dennis Pryslak, the New Jersey lettuce grower who was ordered to repay the aid he received, said it is unfair to single him out just because he was mentioned in a news story.

“There’s 50,000 other guys out there in the same situation and we got caught,” said Pryslak.

Yeutter said he hoped to avoid future big-buck bailouts, either by improving the federally subsidized crop insurance system or creating a permanent, efficient disaster program.

“We simply cannot afford a combination of the two,” Yeutter said. “The combination of mousetraps that we’re using to deal with natural disasters in this country is not a very desirable combination.”

If Congress chooses to finance disaster programs rather than subsidize crop insurance, the Agriculture Department will go back and examine the problems the AP found, he said.

“One could put in place permanent disaster legislation that would be a potential substitute to crop insurance,” Yeutter said. “Once the administrative system was put in place, we wouldn’t have the kinds of problems that were cited in your articles, or at least they’d be dramatically minimized.”

The stories appeared amid an intensifying debate in Washington over the value of crop insurance vs. year-to-year disaster relief. Earlier this month, Sen. Bob Dole (R-Kan.), senior member of the Senate Agriculture Committee, renewed his call to strengthen crop insurance and clean up excess in farm-disaster programs.

“We were begging for disaster help for Kansas wheat farmers (last year) and there were other senators fighting for the watermelon and pickle growers,” said Dole spokesman Walt Riker.

“What he’s saying is, let’s clean up crop insurance and make it attractive for farmers to participate in. Let’s not have these whole programs where the country is paying for ‘ginseng root relief,’ ” Riker said.

Ginseng root was among the many crops eligible for disaster assistance in 1988.

Indeed, the AP study, conducted over seven months, found that payments went far beyond the initial intent, supported by almost everyone, to save Midwestern grain growers from bankruptcy. Growers collected on everything from kiwi fruit in California to Christmas trees in Connecticut. Checks were written for rain-bloated tomatoes in New Jersey and washed-out birdseed in Colorado.

Rep. E. (Kika) de la Garza, chairman of the House Agriculture Committee, defended the disaster relief program and contended that the benefits to truly drought-stricken areas were “camouflaged” by abuses highlighted in the stories.

“Legislation at best is an imperfect endeavor,” said De la Garza (D-Tex.). “Therefore there are those (mistakes) that for one reason or another fall through the cracks. That always happens when we do legislation in an emergency situation.

“I would have liked to have taken more time. I would have liked to have done more study. But there was no time. Something needed to be done.”

Some problems mentioned in the stories, such as farmers “triple dipping” by collecting disaster aid, crop insurance and growing a replacement crop all on the same acreage, were corrected in the 1989 relief program, De la Garza said.

The House committee, he said, will look into the reported abuses and ask the Agriculture and Justice departments to see if fraud or other illegal acts were committed.

“Already, from word of mouth, we’ve been looking,” De la Garza said.

Early in January, the Agricultural Stabilization and Conservation Service asked Pryslak to return his $100,000 in assistance within 30 days. The AP had reported that his business exceeded the $2-million revenue limit, disqualifying it from the federal program.

Pryslak, who has appealed the decision, said he gave the local ASCS office correct information and asserted that he was paid through the agency’s misinterpretation of the rules.

“If I knew about the $2-million ceiling, I wouldn’t have taken the money,” he said.

Peter DeWilde, the ASCS director for New Jersey, said errors were made on both sides.

“He didn’t give us some information and some information we didn’t ask for,” he said. A determination of Pryslak’s appeal is expected by the end of February.

“Sometimes the rules are hard to interpret, and then sometimes the rules are changed on us,” DeWilde said. “We welcome any chance to make sure these people deserved to be paid.”