NCPA - National Center for Policy Analysis

SAUDIS GOT U.S. FARM SUBSIDIES

December 2, 2008

A sports-team owner, a financial-firm executive and residents of Hong Kong and Saudi Arabia were among 2,702 millionaire recipients of farm payments from 2003 to 2006 -- and it's not even clear they were legitimate farmers, say congressional investigators.

The Government Accountability Office (GAO) said 78 percent of the recipients resided in or near a metropolitan area.  Further, the investigators said the Agriculture Department should have known that 87 of the 2,702 recipients were ineligible because it had noted in its own databases that they exceeded the income caps.

The GAO said it was prevented by law from identifying individuals cited in its report, but the investigators offered these examples of likely improper payments:

  • A founder and former executive of an insurance company received more than $300,000 in farm-program payments in 2003, 2004, 2005 and 2006 that should have been subject to the income limits.
  • An individual with ownership interest in a professional-sports franchise received more than $200,000 for those same years that should have been barred by the income limits.
  • A person residing in a country outside of the United States received more than $80,000 for 2003, 2005 and 2006 on the basis of the individual's ownership interest in two farming entities.
  • Nine recipients resided outside of the United States -- in Hong Kong, Saudi Arabia and the United Kingdom, for example.

The investigators said the problem will only get worse, because the payments they cited covered only the 2002 farm-bill subsidies.  The 2008 farm legislation has provisions that could allow even more people to receive improper payments without effective checks, they said.

Source: Larry Margasak, "Saudis got U.S. farm subsidies: Despite being ineligible and because no one was checking, many millionaires, some from Saudi Arabia and Hong Kong, got agricultural payouts," Associated Press/Seattle Times, November 25, 2008.

For text:

http://seattletimes.nwsource.com/html/nationworld/2008431737_farmsubsidies25.html

 

Browse more articles on Tax and Spending Issues