Sen. James Lankford, R-Okla., is a sponsor of the bill.

Sen. James Lankford, R-Okla., is a sponsor of the bill. Sue Ogrocki/AP file photo

Senators Renew Bipartisan Efforts to Protect Federal Retirees from Benefits Fraud

Bill approved by Senate oversight panel would make it a felony for retiree representatives to misuse FERS or CSRS funds.

Senators are again working across the aisle to prevent financial representatives from taking advantage of federal retirees.

The bipartisan Representative Payee Fraud Prevention Act (S. 1430) would impose stricter penalties to deter retiree representatives from misusing their clients’ Federal Employees Retirement System or Civil Service Retirement System benefits. The Senate Homeland Security and Governmental Affairs Committee approved the bill by voice vote last week.

The legislation would give U.S. attorneys power to prosecute representative payees— people or organizations that manage benefits for those who are unable to do so on their own behalf—who abuse FERS and CSRS funds, and would make such abuse a felony. Protections are already in place for recipients of Social Security and veterans benefits, but not for benefits disbursed by the Office of Personnel Management.

“This is a straightforward, commonsense bill that closes that loophole,” said Sen. James Lankford, R-Okla., one of the measure’s sponsors, in a statement. The bill was co-sponsored by Sens. Gary Peters, D-Mich., and Kyrsten Sinema, D-Ariz.

“As lawmakers, we have a responsibility to ensure that those who have dedicated their lives to public service have access to the funds they’ve earned after a lifetime on the job,” Peters added. “Our commonsense, bipartisan legislation would protect vulnerable retirees and crack down on fraud and abuse by reminding bad actors that there is a price to pay for this kind of unconscionable breach of trust.”

Lankford introduced similar legislation with bipartisan support in 2015. That bill passed the Senate and the then-House Oversight and Government Reform Committee.

The report accompanying the 2015 Senate version of the bill noted that:

The OPM Office of Inspector General has reported to Congress an increase during recent years in the number of representative payees who take advantage of their position and use the money they receive for purposes other than to benefit the federal retiree. The OPM OIG has further reported that OPM has an extremely antiquated paper system for tracking representative payees, and does very little, if any, oversight work to ensure representative payees are using federal monies for the benefit of the retiree. …. The absence of federal statutory authority often dissuades U.S. Attorneys from bringing to justice those appointed to take care of government retirees' benefits when they use these funds for any purpose other than for the benefit of the retiree that they represent.