Lawmaker Requests IG Probe Into Trump COVID-19 Food Program
A report from Democratic congressional staff found “serious red flags” with some of the contractors involved in the program.
A top House Democrat asked a watchdog on Wednesday to investigate a pandemic food assistance program launched under the Trump administration that reportedly used contractors with “serious red flags.”
The Farmers to Families Food Box Program was first started in May 2020 in response to the coronavirus pandemic. It allowed the Agriculture Department to use funds from pandemic relief measures to buy food directly from producers and then distribute it to food banks and nonprofits that served Americans in need. According to the Government Accountability Office, $5.88 billion was obligated and $5.47 billion was expended over five rounds spanning a year.
“I write today to request that the Office of Inspector General, in addition to completing its ongoing review of the program, undertake further work to reclaim wasted funds for American taxpayers and help mitigate future risks,” Rep. James Clyburn, D-S.C., chairman of the House Select Subcommittee on the Coronavirus Crisis, wrote to Phyllis Fong, USDA inspector general. “Specifically, I ask that OIG evaluate contract performance, including a review for potential fraud or inefficiencies by contractors in the program; and the adequacy of contractor vetting and of guidance provided by the USDA program administrator.” Clyburn included a report on the program by the subcommittee’s Democratic staff, also released on Wednesday, based on an investigation launched in August 2020.
The report focused on three contractors the Trump administration paid millions of dollars to assist with the program: Yegg, CRE8AD8 and Ben Holtz Consulting. These companies were “unqualified” and “had serious red flags,” according to the report.
For example, “the Trump administration awarded a $40 million contract—which was later canceled before any payments were made—to Ben Holtz Consulting Inc,” said the report. “In its references section, Ben Holtz’s bid proposal had stated: ‘I don’t have any.’ The proposal also pitched an unusually broad range for delivery capacity: between 5,000 and 200,000 16–18-pound boxes of produce per week.”
The Trump administration also did not monitor contract performance for potential fraud or abuse; did not “safeguard taxpayers from price gouging;” and did not have the structures in place to ensure the program was meeting its intended purpose, said the report.
Another example cited is that “the Trump administration sanctioned $7.95 million in payments to Yegg for deliveries that took place outside of the contract period—in violation of contract terms and in spite of questionable circumstances of the deliveries and some of the purported delivery recipients.”
A spokesperson for Yegg told Government Executive in a statement on Thursday that, “At the height of the pandemic, Yegg stepped forward and participated in getting millions of dollars of food relief to needy families.”
The company is “proud of the work it did on behalf of the American people, stands by its accomplishments within the Farmers to Families program, and is disappointed in the subcommittee’s report, which shows no appreciation for the atmosphere of crisis that prevailed at the time, or the speed with which Yegg and other participants in the program were able to stand up a brand new supply chain for those in need,” the spokesperson continued. “After over a year of investigation, and full access to the company’s documents and books, the subcommittee has, in its zeal to attack the prior administration, chosen to publish a report that is rife with speculation, half-truths, and innuendo.”
“The idea that my knowledge, skills, abilities and expertise as a 4th generation California farmer has been misunderstood by this case study is disappointing,” said Ben Holtz, president of California Avocados Direct, which Ben Holtz Consulting does business as. “I'm all in favor of accountable spending of taxpayer dollars, but unfortunately, these discussions with regard to my contract are skewed to appear in the view most favorable to the report authors.”
The other company did not immediately respond for comment.
Additionally, the Trump administration “manipulated the food box program for political advantage” by using taxpayer dollars to include a letter from President Trump in the food boxes, said the report. It also noted that the Office of Special Counsel determined in October 2020 that then-Secretary of Agriculture Sonny Perdue violated the Hatch Act in a speech over the summer about the program, during which he also called for Trump’s reelection.
The Biden administration ended the food program on May 31. Nevertheless, the subcommittee issued seven recommendations for future food distribution programs, such as USDA “should thoroughly vet prospective contractors to ensure that their experience and operational capacity align with the nature and size of any awards.”
The Democratic staff of the select subcommittee said its investigation was a “case study of limited scope,” and therefore the USDA IG should do a program-wide review of the contractors involved.
Neither the USDA IG office nor the Republican staff on the select subcommittee responded for comment.
GAO found over the course of the five rounds “243 contractors delivered more than 176 million food boxes to recipient organizations across the U.S. and territories by the end of the program” and “food boxes were delivered to nearly 78% of all U.S. counties, including to more than 89% of counties where at least 20% of the population lives in poverty,” said a report issued in September.
However, “USDA could not analyze the program’s performance in meeting its other two goals: helping contractors (i.e., distributors of goods) retain jobs and helping food producers faced with declining demand—because USDA did not systematically collect the necessary data,” the report continued. “For example, USDA did not collect data on the number of jobs contractors might have lost, but ultimately retained as a result of participating in the program and the number, category, and size of participating producers or whether the pandemic had reduced demand for or sales of the type of product the producer provided for the program.”
This article has been updated with comment from Ben Holtz Consulting.