Category Archives: South Dakota

Appeals Court Says USDA Can’t Keep SNAP Dollars Hidden

Federal court sheds some sunlight on food stamp fraud.

When the Food Stamps (now known as SNAP) started in 1964, Congress appropriated $75 million. By the program’s third year, this amount had risen to $200 million. By fiscal year 2012, the program had a price tag of over $78 billion–a staggering thousand-fold increase over the program’s first year. By 2012, more that 46 million people–more than 15 percent of the U.S. population–were receiving benefits.

What food stamps are intended for.

What SNAP (food stamps) is intended for.

Most of that money goes to needy families. But an estimated $858 million per year is “trafficked”. Recipients illegally sell their benefits for cash to unscrupulous retailers. By one official estimate, about one in ten of the participating retailers engage in this illegal practice. Not only are these businesses stealing money from the taxpayers, but they are stealing food from hungry people.

If you’re doing this in South Dakota, you’re about to get busted, thanks to the tenacious efforts of the Sioux Falls Argus Leader newspaper. For almost three years, they’ve been fighting to get the USDA to hand over the secret data of how much money is going to each participating retailer. It’s safe to say that armed with this data, they’re going to be responsible for sending a few dishonest store owners to jail, all through the simple expedient of good journalism. If you’re taking in millions in food stamp dollars, it’s now only a matter of time before a reporter camps out outside your door. If you don’t have any customers walking out with bags of groceries, you’ll have some explaining to do. And you can do that explaining to a judge and jury.

For almost three years, the USDA, which runs the food stamp program, tenaciously fought to keep this information secret. They refused to hand it over when the newspaper made a Freedom of Information Act (FOIA) request. They refused again when the newspaper filed an administrative appeal. And they fought hard and won when the newspaper brought them to federal court in South Dakota.

But that all changed on January 28 when another federal court ordered the USDA to hand over the information. The U.S. Court of Appeals, based in St. Louis, struck down the South Dakota judge’s ruling, and held that the public and the newspaper are entitled to this information. The court brought a little sunlight to the USDA bureaucracy, and even quoted Justice Brandeis who said that “sunlight is said to be the best of disinfectants.”

A few months ago, I did the SNAP Challenge and wrote about it. I know that it’s tough (but not impossible) to feed yourself adequately with the amounts allowed.  And it’s a lot harder if people are stealing the money designated to feed the hungry.  If you’re stealing from the taxpayers and from hungry people in South Dakota, you’re about to get busted. And it’s about time.

You can read a more complete summary of the court’s opinion at my website, including a link to the court’s opinion.

Our New Prairie Home

For over ten years, our parent website ( and its predecessor websites have earned a small amount of income from the Amazon affiliate program. This income was very modest, but it was income, and we paid Minnesota income tax on that income.

In June, the Minnesota Legislature decided to kick us out of the state. As a result, we no longer earn this income in Minnesota, and we no longer pay Minnesota income tax. This website now earns income in another state, and Minnesota no longer sees a dime of that income. We got kicked out of the state because the Legislature bowed to pressure from large Minnesota retailers such as Best Buy and Target. These retailers were fretting about the unfairness of an unlevel playing field. From the sidelines, they watched the success of Amazon‘s business model and wondered why their customers were going to Amazon. They undoubtedly watched billionaire sports team owners successfully go to the legislature for help, and they decided to do the same thing. So they sent their lobbyists to St. Paul and asked the legislature to “level the playing field” for them.

They argued that Amazon is successful for one reason and one reason alone. It’s not because Amazon has better prices. It’s not because Amazon has a huge selection. It’s not because Amazon has great customer service. No, the only reason why Amazon is successful is, so the argument goes, is because Amazon does not need to collect Minnesota sales tax. Because Amazon does not have a physical presence in the state, it is not required to collect sales tax. Instead, customers are supposed to keep track of their own purchases and remit the “use tax” to the state themselves. According to the argument, Minnesota customers enjoy having to do this extra step, and this makes the playing field unlevel.

The Minnesota Legislature looked at the fact that Minnesota residents were making money by being Amazon affiliates, and decided that this was enough of a physical presence to warrant a demand that Amazon collect Minnesota sales tax, effective July 1. Predictably, as it had done in other states that had tried the same trick, Amazon decided that it wasn’t going to do business with affiliates in the state, effective that same date.  Unless they moved, those affiliates were out of a job.

In short, Amazon was told that they needed to fire their Minnesota affiliates or else collect the tax.  They complied with this demand, and thus leveled the playing field, by firing the Minnesota affiliates.

A website such as doesn’t have too many ties to the physical world. We exist in “the cloud”. Our main physical presence is in the form of a bunch of ones and zeros in a Utah data center. But we have some physical assets, and until June, our physical connection was with the State of Minnesota. In late June, we hastily moved those physical assets to Texas.

We thank the Lone Star State for providing us with temporary refuge. But Texas summers can be hot, and we’ve spent the past few months looking for a permanent home. We have now found it, and we are proud to say that our operations are now based in Madison, South Dakota.

Madison is a thriving town of 6,474, and is the county seat of Lake County. For a refugee from the land of 10,000 Lakes, it’s a beautiful area with many opportunities for outdoor recreation. It is near the 1350-acre Lake Herman and 2800-acre Lake Madison. Several South Dakota State Parks are in the area. And like its larger namesake in the Badger State, Madison is a college town, as the home of Dakota State University. Its a short drive from Sioux Falls, a bustling city which has used its location to take advantage of the economic chaos just to its east.

If you want to send us a postcard, you can send it to our new World Headquarters:

  •, Inc.
  • 110 E. Center St. #388
  • Madison, SD 57042

Nothing much has changed. Our ones and zeros are still located in Utah. But the physical assets of this cyber business are now located in South Dakota. And you can thank the Minnesota Legislature for encouraging us to find our new home here.

Super 8 Motel - Madison

For your stay in Madison, South Dakota, we recommend the 
Super 8 Motel – Madison
. They offer reasonable rates, clean comfortable rooms, free breakfast, and plenty of free parking. They’re less than a mile from our world headquarters.

Click Here For Today’s Ripley’s Believe It Or Not Cartoon