It’s been four months and John Munro still doesn’t know where his money is or when he’ll see it.
Munro entrusted a $130,000 inheritance to Safety Net of Oregon, a now shuttered Portland nonprofit that was tasked with administering the federal disability and veterans’ benefits for individuals who need help managing their money. Some of its former clients, like Munro, forked over their savings or inheritance to Safety Net for safekeeping. In April, Safety Net was shut down by the Social Security Administration over concerns it was fraudulently mismanaging clients’ funds. Now some clients are still struggling to find out what happened with their money.
“I don’t know how much is gone or whatever,” says Munro. “I really don’t know.”
If someone receives federal disability benefits but is deemed by the Social Security Administration to be unable to manage their own funds due to a physical or mental impairment, they are assigned a payee, an individual or an organization charged with making sure the money is used to pay the recipient’s rent, bills and other necessities. Safety Net was the state’s largest payee service with about 1,000 clients. Kathy Wilde, litigation director for Disability Rights Oregon, says that some of Safety Net’s clients (she’s not sure how many) came into money from a settlement, inheritance or trust and handed their money over to the nonprofit.
In March, agents with the Office of the Inspector General executed a search warrant on Safety Net’s office on Southeast Morrison Street, seizing financial records and computers. The affidavit in support of the search warrant states that during a 2013 review by the Social Security Administration, Linda Stelling, CEO of Safety Net, produced records showing that the nonprofit had $1.3 million in conserved client funds. However, bank statements, according to the affidavit, showed a balance of approximately $670,000. The affidavit states that the Social Security Administration’s review found there was a deficiency of more than $600,000 in Safety Net’s books, which Stelling attributed to a software problem. Stelling, who is described as appearing “overwhelmed,” provided contradictory information during the review, according to the affidavit.
According to Wilde, the seized computers might contain information that could corroborate the amount of money Safety Net was holding for its clients. However, she says they are currently in the possession of the U.S. Department of Justice, and she doubts that the records are adequate enough to determine how much money each client is owed.
“It’s kind of a catch-22,” says Wilde.
Wilde says that there are two potential ways for former clients to access funds Safety Net was holding for them that haven’t been disbursed. If someone is convicted of a crime in connection to mismanagement of funds at Safety Net, then former clients could get their money through a fund set up for crime victims, says Wilde. Currently, no one has been indicted for any crimes related to Safety Net. The Social Security Administration is also responsible for reimbursing funds that were mismanaged by a payee, says Wilde. But she doesn’t know when either option will produce results and doesn’t expect the situation to be resolved soon.
“It could be months. Could be a year,” she says. “I have no idea what’s going to happen.”
In the meantime, Wilde is circulating forms to former Safety Net clients so they can document how much money they are missing. She’s distributed the forms to local social service agencies with instructions that they be forwarded to the U.S. Attorney’s Office for Oregon.
Helen Cooper, special assistant U.S. attorney, says that she has received fewer than 20 forms claiming varying amounts of money. She says that the point of these records is to give Safety Net clients a venue to communicate any information that the U.S. Attorney’s Office should have. Citing an ongoing criminal investigation, Cooper wouldn’t comment specifically on the time frame of when clients might get their money, when an indictment might be coming or on the state of Safety Net’s records. The amount of restitution, she noted, will be determined by a court.
“The good news is that there were bank records,” she says. “And bank records speak for themselves.”
Francis, a former client of Safety Net who turned in a form, doesn’t want his real name used because he is worried that “they” will retaliate. By they, he means the array of government offices he’s contacted trying to get the $7,000 savings that Safety Net was holding for him. He says he has gone to the local Social Security office three times and contacted the offices of Sen. Ron Wyden and Rep. Earl Blumenauer, in addition to the U.S. Attorney’s Office, all to no avail. Francis says he wants to move, but he can’t because he can’t access his savings to pay for it.
“If it were the other way around, they would downright get their money,” says Francis, who feels he is being punished for his thrift.
Ann Mohageri, spokesperson for the Social Security Administration’s office in Seattle, told Street Roots that her agency recognizes that this is a challenging situation and wants to work with former Safety Net clients and their new payees to make sure that their needs are being met. She says that if a client has an urgent need, the Social Security Administration will review its records to see if it can pay out any money owed.
The Share & Care House, a social services nonprofit based in Puyallup, Wash., with an office in Tigard, became the payee for about 400 former clients of Safety Net, according to Charlene Hamblen, the group’s executive director. Hamblen didn’t comment on what happened to the savings accounts of former Safety Net clients.
When Safety Net was forced to shut its doors, it threw many of its clients into financial turmoil. Many of them suffer from severe disabilities that made negotiating for a new payee difficult. With their payee going out of business, some clients faced the very real possibility of being unable to pay their rent or other necessities. In response, Disability Rights Oregon and the Oregon Law Center sued the Social Security Administration over its handling of the situation, which led to a federal judge ordering that the agency automatically assign Safety Net clients a new payee.
“If this situation ever arises again, the sooner they blow the whistle the better,” says Wilde, who notes that at last count the number of people who are still without a payee was down to 20.
To read Street Roots ongoing coverage go here.