‘No Corruption,’ Welfare Chief Says

Amid renewed allegations of welfare fraud and two days before ABC News airs an investigative piece on the same subject, San Diego County officials staged a preemptive strike Tuesday and denied all charges of wrongdoing.

George Bailey, chairman of the County Board of Supervisors, called the ongoing controversy a “political football,” as supervisorial candidates Judy McCarty and Jack Doyle released statements supporting a welfare fraud investigator who they say exposed a “high level” of corruption.

Cecil H. Steppe, interim director of the Department of Social Services, told the board he had found rumors of “hiding cases, shredding cases” to be untrue and that “I’m not convinced there’s ever been a problem with missing cases.”

“I have found no corruption,” Steppe said. “We are not hiding anything, for there is nothing to hide.”

Nevertheless, a recent investigation targeted 20 people, including five former welfare department employees who were each sentenced to prison--one for seven years. Steppe said one other employee recently was arrested for having allegedly seized $17,000 in a welfare-fraud scheme.

Steppe’s comments constituted the first public comment by a county official since April, when the San Diego County Grand Jury confirmed it had found widespread corruption and fraud in the Department of Social Services and concluded it had long been tolerated by officials there.

The grand jury completed an eight-month investigation by saying officials had been indifferent to employee and welfare recipient fraud that had cost taxpayers up to $70 million annually. The grand jury’s findings involved primarily overpayments and phony cases.

Although then-department director Richard Jacobsen was not mentioned in the grand jury’s 17-page report, the document put much of the blame for the troubles on policies instituted by Jacobsen and other managers.

Jacobsen was forced to resign earlier this year, and into the void stepped Steppe, a career law-enforcement executive, who said Tuesday much of the confusion surrounding missing case files has to do with the volume of work processed by an overburdened department.

“You need to see what 1.7 million files (the total number of cases in the department’s records library) looks like,” Steppe said. “With that incredible number, it doesn’t seem strange to me (that) you wouldn’t be able to find a small number of (case files).”

Out of the 1.7 million, Steppe said about 135,000 remain active, and out of those, 6,167 were, at one time, alleged to be missing. Steppe has since uncovered all but 54, he said, and believes those are scattered in transit somewhere between 35 district offices.

He said the 6,167 had been in “limbo” between offices and mounds of paperwork, but to avoid similar problems in the future, he’s instituting a computer “bar-coding” system similar to that used in supermarkets for pricing and keeping track of inventory.

Steppe is also recommending, pending approval by the Board of Supervisors, that welfare fraud investigations be taken over by the district attorney’s office. He’s recommending that the number of welfare fraud investigators--now about 55--be increased by “100%.”

“The board has to vote on it,” he said, “because, like everything these days, it’s a matter of funding, but in this case, it’s well worth the money.”

Even as Steppe was appearing before the board, members of the grand jury descended on the department’s offices Tuesday morning, looking once again for allegedly missing files and interviewing employees.

Supervisor and mayoral candidate Susan Golding appeared to surprise Steppe during the meeting by informing him of the grand jury’s action and that she had heard departmental supervisors were urging employees not to talk.

Golding finished by saying, “Such behavior will not be tolerated.”

Steppe reiterated that there are “no missing files” and that, so far, any file missing seems to have been a casualty of confusion stemming from computer glitches, mountains of paperwork or transfers from one office to another.

“There are going to be some days when you can’t find a case,” Steppe said. “When you look at the volume of cases we’re managing and processing and then to see only a handful missing, well, I think it begs the question.”

In a separate, written statement, Steppe said: “There was some recent media attention on thousands of misplaced case files throughout the department. Although many files have been closed for various reasons, they are not lost (sic).

“It is not possible to have them readily available for reasons such as lack of adequate office storage space, files moving between programs and locations for other program considerations or not yet processed into the record library.”

In an interview with The Times late Tuesday, Steppe said he had uncovered no “hard evidence of wrongdoing. If someone out there has some factual data, I welcome it. I will refer to the district attorney for prosecution the name of anyone said to be guilty of fraud.

“There’s been a lot of innuendo and a lot of ancient history. If someone has something new, I want to hear it. Until then, I can only go by what I know and see.”

David Sossaman, a welfare fraud investigator currently on leave and a key witness in the grand jury inquiry, is said to be featured prominently in Thursday night’s segment of ABC’s “Prime Time Live,” which probes the welfare problems of San Diego County.

Steppe said of Sossaman: “Most everything he’s said has been through the media and not to me personally. I would suggest to him that, as a peace officer, if he has any proof of wrongdoing, he has a responsibility for informing me and the proper authorities.”

Sossaman and Jack Doyle, who’s running for the Board of Supervisors from East County, appeared jointly at a press conference Tuesday, and later in an interview, Doyle argued Steppe’s claims about missing cases.

“I heard he told the board (Tuesday) morning that 70 new cases had been located,” said Doyle, the mayor of Santee. “But he recently said in a letter to the press that there were ‘no missing cases.’ The inconsistency is what I’m concerned about.

“We have $70 million in estimated fraud in the welfare system, according to the April grand jury report, and my concern is taking pro-active steps to clean that up.”

San Diego City Councilwoman Judy McCarty, running for the Board of Supervisors, issued a statement saying she would be watching the ABC program on Thursday night with Sossaman as a guest at her San Carlos home.

Together, Sossaman and McCarty have called for a “Citizens’ Commission on Waste, Fraud and Abuse.”