Idaho Actions Applied Across the USA with Alex Adams

Oh, it's Adams. We meet again. How are you, sir?

Doing well. You're now meeting on my DC turf.

I know. Man, you've come. You've like very kindly, you know, done so many interviews

in the indifferent, different studios and now we're at your spot.

It's great. You're the Assistant Secretary of Family Services and that's couched

under the Department of Health and Welfare, correct?

The U.S. Department of Health and Human Service. Health and Human Services, fantastic.

There are a lot of initiatives that you have been engaged with, specifically,

you know, obviously most notably, you know, perhaps not in the best way, but rooting out fraud,

which is fantastic and across the nation. It was something you were engaged in, obviously,

in Idaho as well. But you're also bringing a lot of other programs like, again, working on adoption,

foster all these different things. Talk to me first about the fraud that was rooted out,

because this is something that obviously made like worldwide news. You were at the center of it.

There were, you know, obviously in different states throughout the, throughout the country,

there are different appetites to making sure that we have efficacy with federal dollars

and federal programs in summer or less so. That leads to fraud. Talk to me about what led to that

kind of disturbing realization that it's like, look, man, we have hundreds of millions of dollars

of fraud for this program that was supposed to be designed to help American families.

Yeah. Well, generally, ACF is what I receive, the administration for children and families.

Across all programs, budget is around $80 billion now. And most of those dollars go out to state

governments. There's a couple exceptions, but for the most part, the general formula is we'll have

a program like child care subsidies or TANF, which is cash subsidies for the low income.

We have a federal pot of money. We send those out to states. States decide how to use those.

So anytime you separate the financing and the accountability, the conditions for fraud are

exist. They're there. So child cares about a $12 billion program. We send that out to states.

Minnesota share, for example, $185 million dollars. There's been flashing red lights for

quite some time. Last spring, the HHS Office of the Inspector General put out a report about

Minnesota, specifically with concerns about how they were handling attendance records.

So because the federal government relies on them to supply you with like, these are the people

coming and this is what the like, essentially, the benefit we're offering them. Because you

separate the financing and the accountability, oftentimes, there's this going on.

What we've said is buck stops with us. We want to ensure accountability for all of the federal

dollars that are being used. These are not victimless crimes. Every dollar that is not going to the

purpose intended by Congress is being stolen from the intended beneficiary. A dollar stolen from

the child care program isn't a victimless crime. It's stolen from a child who otherwise would have

benefited from that program. So what we're doing is we're rooting out fraud waste abuse. We're looking

under every rock and every mattress. We're making sure that the dollars are going to where they

were intended. Because of some of those flashing red lights that were available in Minnesota,

last December, early December, we sent a letter to the state asking for a whole

ream of information on how they were using that program and making sure that those dollars were

accounted for properly. And then, certainly, there were other events shortly after Christmas.

Video went live on Twitter that just turbocharged how many people were talking about this. But

I think it's really important to know that HHS had been on top of this, that we were ahead of that

curve, that we had started a chain of events in early December to start pulling information

from Minnesota, because the allegations were very troubling. So what you're saying here at the

end is essentially, look, you guys were already ahead of this before the broader public understood

that this is a thing. This wasn't a reactionary thing. It was just, hey, we were already dealing

with this. And then, in December, you know, again, events unfolded as it were, and everybody became,

you know, very familiar with it. But you were already doing stuff. Yeah, our first letter was like,

you know, first, you know, maybe late November, first week in December. Gotcha. I don't remember

the exact date. But it's something that we're taking very seriously. I think Idahoans that followed

my work and Idaho know that deregulation is something that's important to me.

Conservative budgeting is something that is important to me. And part of conservative budgeting

is rooting out fraud waste abuse at all of its sources. So we started looking at these programs where

there had been demonstrable notice in the past. And the office of the inspector general report

in the soda in particular is why we started looking into this among other reasons,

single audit findings, things like that. What folks can have confidence in is that this is not a

flash in a pan. We weren't following, you know, just the median interest in being reactionary. As

you said, this is something that's corduary foes. We're going to make sure every dollar that is

congressional appropriated is going to its intended purpose. And we're going to hold states accountable.

We have. But may I ask a question? Yes, I'm. The Minnesota is one of the very popular ones that

people were following at large. I heard a recent interview with RFK Jr. about instances in Florida

with, you know, like foreign governments and whatnot. Is that are these abuses? Because you said,

look, we've got about $12 billion going to child care. And Minnesota got somewhere between

a hundred and two hundred million of that. But that's a very tiny portion of the $12 billion,

right? So are the, do you have similar, similar sizeable amounts of fraud going on in other places

like Florida that you guys are also reading out? Yeah, it goes back to the structure of the programs.

Like I said, most of our programs, there's a congressional authorization. There's statutes and

regulations. But ultimately the administer of most domestic programs that come through ACF are states.

So state policies and how they structure their parameters either make it more likely or less

likely that fraud will be implicated. I'll give you an example in child care. The Biden

administration tried to get all states to pay child care based on enrollment versus attendance.

And then they tried to get states to pay prospectively before the kid showed up as opposed to

after the fact based on verified attendance. That makes fraud much more likely.

So what the Biden administration was doing in many of these programs, how they structured the

policies and tried to bludgeon states into adopting those policies as they basically back the

rings truck full of cash up to the state capital and sent the security home. So a lot of what we're

doing is we're trying to get our policies right. We've filed a rescind those rules and go back to

attendance-based retroactive pay based on verifiable hours of attendance. But there's four years

of Biden activity that made fraud in many instances much more likely that we're having to undo.

Understood on that. Thank you for that explanation because I didn't know perspective versus actual.

I had no idea about actual attendance versus versus enrolled. Those make perfect sense because I

don't think, I mean, I don't even think if you were, there's a lot of talk about redoing the

funding, funding mechanism and education in Idaho. And again, just saying like, well, this is how

many kids may be showing up. Like, nobody would go along with that. That seems, that seems silly.

Well, I'll give a shout out to one of your other former podcast guests, John Vanduata.

Yeah, yeah, yeah. John used to give this speech. He chairs, I know, his health and welfare committee

for the house. And I believe he used to be on JFAC and he gives this whole speech about his left

pocket versus his right pocket. You know, I don't care if the dollar comes out of the state government,

my left pocket or my or the federal government, the right pocket is my taxpayer dollars.

If it comes out left pocket, right pocket is still a taxpayer dollar and we deserve accountability

for those dollars. Too many states see these brinks trucks show up from the federal government

and see it as just walking around cash and that they don't have to take it as seriously.

And I think what our legislature has done a really good job at is micromanaging the use of

federal dollars to the same extent they do dedicated funds and general funds. You have a JFAC

who has put limits on the use of those federal dollars and sometimes will put intent language

around those to ensure that there are appropriate safeguards in place. You also have a governor

in Idaho who was one of the first daring COVID to say, look, Fed stopped sending us money. Stop

like, but right before our governor little said like, we we have records or pluses. We have rainy days

four times like the stop sending us debt finance dollars. So you have a gubernatorial administration

in Idaho that is very in tune with the realities of federal budgeting and has put stringent safeguards

in place to ensure that those dollars are used safely and appropriately as well.

When you talk about Idaho then, and again, I know we want to patch on a couple more things,

but if we could close the loop on this, when the things happen in late December, there was a huge

outrage across the country in Idaho, you know, citizens in Idaho understandably got really worried

and they're like, oh my god, this must be happening here too. And again, I'm like, great, why don't we

find out, but let's not, you know, like, just send people to individual neighborhood houses to

like figure it out as a citizen audit. Like this, even if we make the assumption that a certain portion,

and again, I don't know anything about it, but like, even if I said like, okay, let's say 10% of

childcare places are engaging in fraudulent activity. And again, I pulled that number out of nowhere,

even if we assume that we still have 90% that are engaging in in normal typical business operations,

where there are children, and especially in neighborhood areas, like don't send people to

neighborhoods with like a camera crew for social media content. Like this is where people are dropping

their kids off. So people got really worried about that. And then there was a big question of like,

how do we engage in figuring it out? Like people felt very taken advantage of what you were obviously

in charge of this before coming to Washington. I have to assume you were doing a reasonable job,

or you probably wouldn't be sitting where you're sitting now. What have you seen as far as a result

in Idaho? Yeah, well, a couple of things in Idaho. I mean, we put a number of policies in place

that cross-programs, but my successor, Juliet Sharon, a friend of mine, she is really turbocharged

if you will. She talked relentlessly to her earlier this year about some of the new safeguards

that are putting on place on top of things that I had put in place. And I think they're doing a

phenomenal job of identifying potential fraud and rooting it out. And I think what I would just

say to anyone is, we set up a tip line. I'm sure states have tip lines. If they see something,

say something, but I have complete confidence in how Juliet is handling that department

and overseeing the childcare program. That's wonderful. And again, to be clear, you were worried about

this. I have to assume before you even came here. So, you know, as somebody who's taken care of

at a national level, you were likely paying attention to it on a state level. Yeah, I mean,

I started in Idaho after there had been some adverse audit findings. A lot of my time was spent

cleaning those up. We built a program integrity team, and I'm really proud of what Juliet has done,

turbocharging those efforts and taking them to the next level. Fantastic. Talk to me about other

Idaho-based initiatives that have been spread nationally. Yeah, I'm excited about what we're doing.

I mean, you know, I think Idaho is not one of those fly-over-eye states in this administration.

You have Idaho and is leading across this administration. There's a handful of us here at HHS,

you have folks in Interior, you have folks at USDA. Idaho is punching above its weight in many ways

in this administration. I'm proud to be part of that. Where I focused a lot of my time is on child

welfare specifically improving the foster care and adoption systems. There's several things we

did in Idaho that are now spreading in a good way. One is in Idaho, we ended the orphan tax,

and what I mean by that, this is more cynical than a Charles Dickens plot. Basically,

a child's parents die. That child is now an orphan. That child's parents worked because they worked.

They were entitled to a social security benefit that they had accumulated. They didn't live long

enough to obtain that social security benefit, but a portion of it passes on to their orphan child

in the form of a survivor's benefit. If that child then enters foster care, the state is now the

parent for that child. We have 36 states that are now saying we'll take that, and they're literally

stealing the benefits from that orphan to offset the cost of foster care, costs that they pay for

for every non-orphin in their system. When I first heard about that in Idaho, we pulled in

the team and we ended it with in a matter of days, but there are still other states that are doing

that. We've used our platform here to talk about that, talk about why that is morally wrong,

and why orphans should not be taxed in a way that non-orphans are not, and why it would set them

up for bigger success in life by allowing them to keep those benefits, allowing them to accumulate

interest, allowing them to use it once they age out of foster care for rent, tuition, or other

things that will put them on a set path, self-sustainability. Since we've been here, we put all states on

notice New Jersey quickly changed their policy. Went out to Nebraska, Governor Pillen changed the

policy and ended it in Nebraska a week or two ago. We were in Louisiana with Governor Landry. He

ended it, and we've got a couple more states on their highs, and governors are stepping up and

taking quick executive action, but we also have state legislatures that are considering this.

Mississippi has a bill that's going through the process. Utah has a bill that's going through the

process. Kentucky has a bill, and I'm sure there's others that I'm forgetting, but you know,

something that we led on in Idaho, use the platform and the voice to elevate, and now we're seeing

it spread for positive reasons. Yeah, I ask you like, okay, how are these programs in existence now?

Right? Like, I'm sure somebody came up with this idea of essentially, I guess, like cost-sharing

from a kid that theoretically had resources because of deceased parents, but like, okay, so somebody

had to think that was a good idea at some point. Fine. Like, I have no idea and I'm not asking,

but what I don't understand is when you bring these up to people, like, you go to New Jersey,

like, hey guys, you do this, and they're like, oh, oh, that's bad. Like, we shouldn't Brian,

Brian's like, yeah, we should keep them. Like, okay, great. Like, everybody's, so you guys

killed the program, right? Or if New Jersey kills the program, are people, do they not know about

these programs initially? Or is it like, how is it that they continue to exist? Is it that there

are so many programs they don't know? Or do they know? And they're like, well, no, they're signing

and they think about it. So if we're not getting called out, Brian doesn't want us to kill any program.

MPR is kind of published in anthology of how we got to where we got.

And, you know, as far as I can remember from the anthology, there was a brief recession around

91. Some states hired consultants for how do we cut state costs and offload more onto other

sources of dedicated funding. And some pencil net consultants says, hey, let's pillage the orphans.

Yeah, a lot of states just inculcated that into their budget practices. They used a recession

as an excuse. And then they just turned the wheel and crank. The most, because it's been happening

for 30 years now, there are a lot of states where the governor has no idea it's happening,

or frankly, the state HHS director has no idea it was happening. I was there for a number of months

and I was HHS agency before anyone brought this to my attention. And I remember, there's no

fucking way that happens. That doesn't happen. It doesn't seem, it doesn't seem possible.

Correct. It was happening. I met with the team. I had a full-time personnel who sold job

was to steal from orphans. And I remember having a conversation with those folks and it was

kind of like the end of Jurassic Park where you were so preoccupied with whether or not you could.

You never stopped a thing whether or not you should. It's one of those things that just shocks

the conscious. Everyone we talked to and they hear about the orphan tax. They think it's too

cynical to be happening in their state. Now, I will say kudos to some governors who have heard

about it and have taken quick action. I mentioned some of the states we've worked with. There's

others that are about to take action that will be announcing in the near horizon as well.

But I'll give you an example. I mentioned a governor Landry in Louisiana. I think we talked to his

team on a Tuesday of one week. Within one week we were in Baton Rouge with him signing the

executive order to ban it. He didn't need to study this. He didn't need consultants. He didn't

need to do a Gantt chart. He didn't need to put five years of budget projections together.

He knew it was morally wrong. He knew it was contrary to the values for which he ran for office

and he ended it quickly and immediately. We'll let the rest of the chips fall where they may.

I appreciate the moral clarity we saw there. I wish we had moral clarity in states like Minnesota.

Tim Walls while allowing billions and billions of dollars to go in child care fraud and Medicaid

fraud and hospice fraud and all these things. He's still stealing from his orphans. It shocks the

conscious. So Minnesota knows this and they're like, no man, we're going to keep taking that.

We got to keep the pipeline to fraudulent daycares going somehow. But you know that's one

idea from Idaho that has percolated and gone out. I've done multiple podcasts with you where we

talking about the success of recruitment in Idaho. When I started in Idaho in 74 homes, foster homes

for every 100 kids coming in with a left with 104 homes for every 100 kids coming in. In between,

we got every kid at a Airbnb, short-term rental hotel. We cut congregate care use 30%. We write

in our budget. We get more stable, loving, nurturing family homes. We're bringing that thinking to

DC. So we launched a campaign called at home for every child. Hopefully when you walked in, you saw

our beautiful banners and the side of the building that proclaiming our goal. And we now have states

signing on to that where they're committing to increasing their ratio of foster homes relative

to the number of kids. Nationwide, we have 57 homes for every 100 kids. We're starting off nationally

further behind than where we did in Idaho, which means we still have other states where kids are

sleeping in hotels, Airbnb's, etc. So we launched a campaign home for every child. We're asking

states to sign on and we're aligning our financing and our policies to increase that ratio of

homes to kids. As we talked about in Idaho, you can get more homes through kinship licensure,

kinship licensure, cutting red tape. Right, if somebody comes from another state and they were

registered foster parents. Exactly. California, Idaho, yeah. Right, right. You know, faith-based

recruitment. Most importantly, you can shrink the number of kids coming into foster care through

effective sports, mental health supports, substance use disorder supports, all of those things.

So we're structuring our policies, our financing, and our red tape accordingly.

We announced that in December and we already have states that have joined us.

Louisiana joined us. Missouri joined us. Oklahoma's governor didn't event with us where they

signed on. Tennessee, the governor didn't event with us where they signed on. We're going to

Mississippi. By the time this podcast is out, we'll have been in Mississippi where the Mississippi

governor has signed on. We're going to have more than 10 states by the end of March,

join us and make a formal declaration that they're committed to increasing the ratio of foster

homes to kids. And in return, they're going to provide us monthly data. They're going to give us

monthly data on what the ratio of homes to kids is. We're going to put it up on a leader board

in every month. You'll see what those states ratio of homes to children is. And it will fuel

competition. It will fuel rapid cycle innovation. In exchange, we're getting them out of all this

tiki tacky stuff. We used to have all this red tape where states would have to report to us on

dozens of measures, 100 page reports. It was a lot of box checking and lilippution road dancing.

It meant nothing to me as a state director other than just hassle headaches. And it took my best

people away from case carrying loads working with actual kids. So we're getting out of the way.

We're entrusting the states to pick a mix of things that will improve their ratio

with the catch that they're providing us data more frequently. Get out of the process,

focus on the outcome. They're going to provide us monthly data.

There's a there was a bill that I don't I don't believe passed last year in the Idaho legislature

regarding child care right across the state because what essentially people were saying is like,

hey, look, we don't have enough child care. And there was an articulation that part of the

reason we don't have enough child care. And some people's opinion is that the local municipalities

brought in too many, uh, layered on too many restrictions to child care. So like Polka Tello is like,

hey, man, we have these state requirements, but like we kind of want these requirements layered on

top. And there was a bill. And again, I don't remember what happened with it that went through

that today. Whatever the state requirements are, you can't add anything to that. And there was

a lot of concern from the state from some people in the state saying, look, we have these requirements

because like we think this helps improve the safety of of kids and, you know, the whole bit.

Is there was there any noticeable or verifiable downside to the to the slashing of stuff you did

in Idaho, right? Or was it essentially like, no, no, no, like if you were registering

in California and we allowed you to fast track registration in Idaho, we didn't see a downside

there or like things of that nature. Yeah. I mean, I think what we did in Idaho was kind of a

model exemplar. A lot of people look at how Idaho regulates as the example because we had

noticing comment and we had multiple public hearings. Idaho, every regulation agency does also

has to go in front of the legislature. So there's kind of a court of appeals. If somebody doesn't

like a regulatory decision that an agency makes in Idaho, the legislature provides a court of appeals

in a sense to folks. So I think a lot of people look at the procedural safeguards there as a model.

What gives me comfort about what we're doing here on child welfare and focusing more on the outcome

as opposed to the process is right before we made some of those decisions, we published a report

about 25 years of history and 25 years of our current oversight and 25 years of our current

performance improvement plans showed zero impact. Not only did it not work, not one state passed it

in 25 years. All 50 states failed round one. All 50 states failed round two. All 50 states failed

round three. Not all 50 states have taken round four yet but all who have taken it today have failed

which probably does not bode well for the states that have not yet gone through that process.

It was objectively not working. So what we're doing is we're giving states two options. They can

go through the status quo route that have led to 25 years of pain, misery and nothingness or they

can opt in to this new route focus on getting the ratio of homes to kids up making difference in

the lives of the children in their state. With the catch with the catch being less reports less

narrative in exchange for more frequent data. A lot of the states we've mentioned that we've

been to our SEC states. Very competitive SEC states. What's a SEC college football? Oh,

gotcha. I didn't know. I was like we're talking about adoption and foster care. All right, keep

going. We exposed the non-college football team. I'm sorry. Yeah, we're traveling in SEC country

and you know very competitive juices. We were with the governor of Oklahoma one day the governor

of Missouri the next when he found out Oklahoma had signed on first he declared. Yeah, they're okay

but we are the show me state. We're going to show you a higher ratio of of homes to kids

and I think having states as laboratories of democracy as laboratories of innovation.

I think we're going to see that ratio go up and when one state is doing slightly better than

another I think you're going to see the competitive juices go and they're going to commit

policies or other things that will improve and even more. I know your time is limited today.

I really appreciate you meeting with me one one last thing if I may there are some people in

the state that are very leery about taking any funding or engaging in any program with the federal

government and I totally understand it's like I don't have commentary on that. You are now you went

from obviously the state to the federal government. You are engaging in programs to help you know

youth throughout American youth like these are American citizens that are vulnerable. They are

put in horrible positions no fault of their own. You're engaging and trying to help them

you know find a path forward in the most secure way for for the people that are worried about

taking federal dollars be any federal program is there is there something you would you know advocate

or remind them in regard to these programs. Well you know prior to Idaho HHS I was a budget

director and I shared that leery desk frankly about. Okay so you're the problem. There we go.

Well you know I shared that leery desk about federal funds. I gave an example of Governor Little

during COVID saying we're good. We've built our reserves for time like these. We don't need

another huge cart launch. Chuck now Congress didn't heed that advice and set us another 1.25

billion or whatever it was. You should see the new soccer field. That's awesome.

But you know I would say the general structure is federal money comes down to states.

What states do with them it is a matter of their state legislature. Federal funds don't just

flow in agencies use it willy nilly. Idaho is a state that requires the legislature to appropriate

those dollars and with that appropriation comes oversight in occasionally intent language and

occasionally policy direction. What we had set up when I was working with the governor of Idaho

was every state agency that got federal funds had to pre-clear that through the governor's office

to ensure policy alignment that we weren't signing up for something that was in a front to Idaho values.

The other thing it did is we required every state agency to have an exit strategy. We didn't want

that baby elephant scam to happen at Idaho where you give them a cute little baby elephant

then failed to project the out-year food cost of what you need for that baby elephant.

So what we did is we required every agency to have an exit strategy. If these federal funds

shrivel how are you going to get out of this because the answer can't be we're going to do this

for five years and then shift this on the backs of Idaho taxpayer dollars. So I think the exit

strategy is the pre-clearance to ensure conformity and then legislative appropriation and occasional

policy direction with those has put Idaho on a footing that can give more confidence of the use of

these federal dollars. I think all states need to be vigilant. I think all states need to have

policies in place that ensure accountability for these dollars because when you separate the

financing and the accountability you get a lot of this. Got it. Thank you for taking the

time today. Is there anything you want to say here at the end? No, I appreciate what you do to

continue to raise awareness for important Idaho issues and I'm proud to bring some of those

important Idaho issues to DC and it's fun to see the momentum spread across other states.

Got it. Great. Thank you for taking the time. We'll do it again.