There’s a $72 billion federal program that controls the money of 8 million vulnerable Americans, and you’ve probably never heard of it.

The Social Security Representative Payee system designates a third party to collect the benefit checks and pay essential bills for recipients who can’t do it for themselves. About half are disabled minors, whose parents typically manage their SSI benefits. The rest suffer from Alzheimer’s, mental illness, serious addiction or some other incapacitating condition.

Social Security prefers to choose family members or others close to the recipient to be rep payees. As a last resort, it will hire a professional who’s allowed to take a monthly fee, typically $40, from the beneficiary in exchange for handling their money.

Their powers are similar to those of conservators, whose appointment must be approved by a judge after a hearing. Unlike court-appointed conservators and guardians, the process for choosing and monitoring rep payees is cloaked in secrecy, no doubt inspired by Social Security’s mandate to protect the privacy of its recipients.

A small number of people look at Social Security beneficiaries not as human beings, but as a stream of monthly payments to be intercepted for their own use.

The potential for abuse became obvious in 2009, when 21 intellectually disabled men were discovered living in virtual servitude in a squalid bunkhouse in Atalissa, Iowa. Their employer, Henry’s Turkey Service, was also their landlord and their representative payee, collecting their disability checks and keeping most of the money.

Closer to home, at least two Minnesotans have gone to prison since 2013 for stealing benefits meant for their disabled children.

More recently, Social Security terminated its contracts with two organizational payees in the Twin Cities, affecting nearly 700 beneficiaries. The agency terminated the Minneapolis-based J.T. Kitt Society, with a caseload of 370, in April over differences with its administration and bonding, although there were no questions about misuse of benefits. Social Security isn’t saying as much about Greenleaf Payment Services, a Richfield organization that lost its caseload of 290 in July and is now under investigation by the agency’s Inspector General, according to Carmen Moreno, a Social Security spokeswoman in Chicago.

You won’t find those actions detailed on the Social Security website. Nor will you find a list of approved representative payee organizations, or even a detailed explanation of how people get assigned rep payees in the first place. The brochure Social Security sent in January to a Minnetonka man assigned a rep payee did not mention that he would be charged $40 a month for the service. It’s as if Social Security knows it’s dealing with incapacitated people, so it doesn’t bother explaining anything.

That might be fine if there were no signs of trouble. But that perception has changed since the scandal in Atalissa and the revelation in 2011 that a paroled murderer in Philadelphia was collecting Social Security benefits for disabled adults, one of whom was found chained in her basement. Last year, the Government Accountability Office concluded that Social Security “cannot effectively administer the [rep payee] program under its current resources and structure.”

“I don’t think there’s adequate oversight for that program at all,” said Raymond Cebula, a longtime lawyer specializing in Social Security. He’s now a senior faculty member in Cornell University’s Employment and Disability Institute.

Cebula said the amount of money at risk may seem small, but it’s everything to a poor, disabled and voiceless person. “You’re taking significant rights away from somebody when you’re taking their ability to spend their own money.”

In response to Atalissa, Social Security hired the National Disability Rights Network, a Washington-based consortium of disability advocacy groups, to monitor rep payees with five to 50 beneficiaries. Zach Martin, the network’s disability advocacy specialist, said the “overwhelming majority of payees are doing the right thing.”

I’m sure that’s true. Yet given the scale of potential exploitation, even a small number of unscrupulous or incompetent rep payees have the power to wreck lives. Meanwhile, the number of people who need a third party to manage their finances will only grow as America ages.

In response to the GAO report, Social Security assured Congress that it’s keeping an eye on rep payees. It’s time they lifted the curtain on this program and proved it.

 

Contact James Eli Shiffer at james.shiffer@startribune.com or 612-673-4116. Read his blog at startribune.com/fulldisclosure.