Tuesday, October 30, 2012

JPMorgan Chase Profits Over A Half Billion USDollars Off Food Stamps

JPMorgan Chase Profits Over A Half Billion USDollars Off Food Stamps

Posted on October 4, 2012 by Gillian

Govt Slaves | October 3 2012

A new report by the Government Accountability Institute finds that JP Morgan has made at least $560,492,596 since 2004 processing the Electronic Benefits Transfer (EBT) cards of 18 of the 24 states it has under contract for the food stamp program.

Indeed, JPMorgan’s Christopher Paton told Bloomberg News that food stamps are big business for the big bank:
“We are the largest processor of food stamps in the country…[the EBT program] is a very important business to JPMorgan. It’s an important business in terms of its size and scale…. Right now volumes have gone through the roof in the past couple of years or so. The good news from JPMorgan’s perspective is the infrastructure that we built has been able to cope with that increase in volume.”
While some may be glad that a private company—not a government agency—is tasked with EBT transactions, the GAI report reveals that JPMorgan Chase does not use the same fraud detection systems commonly used by today’s credit card companies.  In fact, federal and state agencies—not EBT processors—are the ones tasked with policing food stamp fraud.

That means EBT processors enjoy multiple pathways to profits that run counter to efficiency and strong oversight.  For example, writes GAI president Peter Schweizer:
Any time TANF recipients withdraw their cash benefits or make balance inquiries through out-of-network ATM machines, the user may incur ATM transaction fees generally ranging from $.75 to $1.50. In addition, most states allow EBT processors to charge card replacement fees. Arizona cardholders, for example, are permitted one free replacement a year, after which a $5 per card fee is imposed. The same goes for customer service calls: After an EBT cardholder exceeds the state’s maximum number of free calls, EBT processors typically tack on a $0.25 per call fee.
By making welfare inefficiency and abuse lucrative, the poverty industry has created a potentially toxic brew of corporate cronyism and government inefficiency that lets food stamp abuse enforcement slip through the bureaucratic cracks:
According to the USDA’s website, the federal food stamp program has “over 100” inspectors to police the nearly 200,000 retailers nationwide that accept EBT cards. For its part, the state of Florida has 63 positions allocated to police over 3 million EBT users. JP Morgan is currently involved in an eight-month pilot project with Florida focused on EBT fraud and abuse. The total staff? Just one JP Morgan employee and five to ten state employees, according to Florida officials.

So how did EBT processors like JP Morgan land its lucrative half-billion dollars worth of contracts?

The GAI report, Profits From Poverty: How Food Stamps Make Corporations Money, says JPMorgan’s political donations to members of the House and Senate Agriculture Committees (who oversee the food stamp program) skyrocketed once the bank entered the EBT market:
Between 1998 and 2002, JPMorgan’s total contributions per election cycle averaged $82, 897. After JPMorgan entered the EBT services market until the 2010 election cycle, their average donation per cycle more than doubled to $215,120…. JPMorgan’s donations to political campaigns also show a clear trend. During the 2008 election, Barack Obama received more than twice the contributions of John McCain: $807,000 for Obama compared to McCain’s $345,505.

Today, one out of every seven people in America receive taxpayer-funded food stamps.
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JPMorgan Chase here in the USA Post Office????

[...]  The reality is that JPMorgan (Europa) handles all the welfare payment transmissions for the Post Office. (They’re into this welfare shtick in a big way in the States as well). So JPM has all the details of how much money HMG pays out in welfare benefits, and all  the people on the recipients’ database.

Broker Blair, JP Morgan Chase, and benefits from the Post Office.

Tony Blair, neocon Socialist

Celebrated financial blogger Max Keiser is fond of saying that the nine scariest words in the English language are “I’m from JPMorgan, and I’m here to help you.” He’s probably right, but did you know they are the main partner bank for the UK Post Office? No, I didn’t either.

The reality is that JPMorgan (Europa) handles all the welfare payment transmissions for the Post Office. (They’re into this welfare shtick in a big way in the States as well). So JPM has all the details of how much money HMG pays out in welfare benefits, and all  the people on the recipients’ database.

Hands up all those who think this is a good idea. All those with their hands up, read on.

JPMorgan Chase, the Pirate’s Chief Investment Office in London booked billions of USDollars in losses earlier this year, after several gigantic trades went pear-shaped. In 2011, Bank of England officials raised concerns internally about the riskiness of some JPM practices, although Merv’s pervs didn’t formally alert other regulators. (Nothing new there then). In 2010, the BoE’s finest also became nervous about JPMorgan’s domination of residential mortgage-backed securities in the City.

Only last week, the respected financial site Seeking Alpha suggested that ‘the JP Morgan Chase trading blunder could result in a $100 billion loss, a contagion of its massive portfolio, and even the wipeout of its entire asset base.’

And, um, leave millions of Britons without any welfare payments.

The Pirate’s credit derivatives, interest rate derivatives, and currency trading are in turn vulnerable to leveraged hidden bets. “At JPMorgan Chase, we view leverage as a potentially powerful resource,” burbles the firm’s website, but like Goldman Sachs and other Wall Street habituees, JPM is ludicrously over-leveraged….and really hasn’t a clue to the nearest $50 billion how much of its debt is or isn’t adequately hedged.

So what on earth is this Wily ol’ Coyote doing running our dear old Post Office?

Well, you may recall that when Teflon Tony was shoved out of Downing Street by the Caledonian blackmailer resigned gracefully as Prime Minister in 2006, he fairly swiftly became a consultant to…..JPMorgan Chase. Within months, Northern Rock went under and, to save three Labour seats, was bailed out by Alistair Darling, Brown’s Chancellor of the Exchequer. Now, you’ll never guess who lucked into getting the good bit of the bank where all the savings were: JPMorgan Chase, thanks to an introduction from Moral Tone. We the taxpayers picked up Northern Rock, the debt-ridden part that was standing on the naughty step.

In a speech last month, Blair observed that “We need to be on the side of the modern-minded, sensible people”. All along, in fact – as the debate raged throughout the Naughties – he insisted that we couldn’t afford to keep the Post Office going in "its then form". So although Peter Mandelson made promises to the TUC in the mid 1990s that he would keep the Royal Mail a closed shop if they helped get Tony Blair into power, once in power Mandelson demanded they get rid of 30,000 staff.

Ironically, Lady Margaret Thatcher never seriously considered privatising it. Like most people of her generation, she saw the post as one of the bulwarks of the British state — an institution of which the nation could be proud. But Tony Blair had very different ideas.

As part of the softening-up process, Blair propagated the myth that the Post Office was losing money. This simply wasn’t true: in 1999, it contributed £310m to the Exchequer, and had made a profit for every one of the previous twenty-three years. But keen to conform to the new orthodoxy of Thatcherism, New Labour meddled and fiddled and left it in limbo, neither public nor private. Meanwhile, deliveries were slashed, staff numbers were axed mercilessly, and many villages saw their post offices sacrificed in the name of solving an  inefficiency problem that didn’t exist.

Even the bonkers Dacre Mail observed last December that ‘Future generations may laugh with disbelief that we were so attached to our state monopoly. But the Royal Mail’s proud history is a reminder that there is more to life than fat profits for the few.’

One of the few is, of course, Teflon himself. When he joined Jamie's  JPMorgan Chase, the former British PM gushed (my italics):
"It is a great opportunity to be able to contribute to
 the work of JPMorgan Chase. They are a leading company at the cutting edge
 of the global economy, with a footprint in virtually every part of the
 world. I look forward to advising them on how they approach the huge
 political and economic changes that globalisation brings."
Well, one of the huge changes wrought by braindead neocon globalism was an awful lot more folks needing welfare.
The deal between Blurrgh and JPMorgan Chase has been hugely enriching for both sides. A month ago, Blair made $1 million in less than three hours by brokering late night talks between billionaire businessmen trying to save a £50billion mining deal.
And no doubt, when the hour came for the Post Office to get into bed with JPMorgan Chase, Tony was able to oil the wheels and grease the pump. I don’t know  that’s what happened. But isn’t it awful when you suggest such a heinous thing about a former socialist, God-fearing bible-thumper, and everyone’s immediate reaction is that it’s highly possible… not to say probable?

As they used to say in the mail business, “Sorted”.

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