The walls at Safety Net of Oregon, a nonprofit that once helped disabled people manage their federal benefits, are usually covered with collages and fake flowers. But now the plaster walls are bare except for a sign stating that there will be no tolerance for weapons, drugs, alcohol and threatening behavior to staff. There’s also a sign stating that Safety Net will be shutting down April 1. “P.S. This is not an April fool’s joke,” the sign concludes.
A client walks into Safety Net’s office on April 1. He’s wearing a weathered red ski jacket and tattered ski pants. He recently got out of jail and has been sleeping on the streets. He speaks in rambling sentences to the staff about how his mother will start managing his benefits. The staff urge him to get on a shuttle outside that’s taking people to the Social Security office downtown so he can get signed up with someone new to manage his money. If he doesn’t do this, they explain, he won’t have access to his money.
“I can’t today,” he tells them.
“Honey,” a staff member replies in a voice that is both urgent and gentle. “You need to go to the Social Security office.”
The man rambles about how he can’t do it today, and he leaves Safety Net. It’s unclear when, if ever, he’ll make it to the Social Security office.
With more than a thousand clients, Safety Net of Oregon was the state’s largest payee representative. Payees are individuals or organizations assigned by the Social Security Administration to manage the disability benefits for individuals who are unable to handle their money as a result of a physical or mental impairment. Payees write rent and utility checks for their clients. Payees make sure there is money set aside for their client’s medication or bus pass. In essence, they are the gatekeepers that stand between disability recipients and financial catastrophe. And some disability recipients could be facing catastrophe as a result of the situation with Safety Net.
On March 6, as first reported by Street Roots, Safety Net was served with a federal search warrant based on allegations that it had mismanaged client funds. As a result of the investigation, Safety Net was directed to cease operations by the Social Security Administration. Safety Net served some of Portland’s most vulnerable people, and its closure threw some into an uncertain situation.
The federal action taken against Safety Net is rare and has little precedent. The wind down of the troubled nonprofit organization has not been smooth. With Safety Net’s closing, some of these individuals faced, and still face, the very real threat of being unable to access their benefit money to pay for rent, medications or other necessities. Throughout the process, the Social Security Administration has been guided by its own internal dynamic that was not always in alignment with some of the most challenged people it serves.
“I’m not aware of another case where a large number of clients lost their organizational payee as the way it’s happened with Safety Net,” says Anna Rich, litigation director at the Oakland, California-based National Senior Citizens Law Center.
Trouble began a year ago when a routine review of Safety Net by the Social Security Administration found that the nonprofit was not properly monitoring clients’ money. According to the affidavit in support of the search warrant, obtained by Street Roots, Safety Net wasn’t performing bank account reconciliations, checking fund balances prior to issuing checks, nor was it properly maintaining receipts and other documents. At the time, Safety Net, which has been approved to operate since 1998, was receiving more than $700,000 per month in Social Security benefits, $300,000 in veterans’ benefits and about $30,000 a month in compensation.
As the review of Safety Net continued, investigators found $600,000 unaccounted for, according to the affidavit. Linda Stelling, Safety Net’s CEO, told investigators that the missing money was due to a software problem. Stelling, who is described as appearing “overwhelmed” in the affidavit, told investigators that she was going to undergo a serious medical procedure. According to the affidavit, on Feb. 21, Stelling was sent a notice that she was no longer approved to be a payee effective April 1.
On March 6, federal agents wearing black jackets with the search warrant in hand descended upon Safety Net’s office on Southeast Morrison Street. They took computers and files to find signs of malfeasance. Left on Safety Net’s window was a sign notifying clients that it was shutting down by the end of the month. Clients were told they would need to find a new payee by March 21.
No one at Safety Net has been charged with a crime at this time. No one at Safety Net would comment for this article.
In early March, the Social Security Administration sent out a salvo of letters written in bureaucratic language to the most recent addresses on file for all of Safety Net’s clients. The letter, which was sometimes accompanied with a phone call, explained that Social Security Administration was delaying the client’s benefits and that they needed a new payee.
The Social Security Administration’s approach of sending out a form letter and making a phone call to Safety Net clients was bound to fail, according to homeless advocates and disability lawyers who’ve been monitoring the situation. They point out that many disability recipients are homeless or are marginally housed in a cheap hotel or other transitory living situation. As a consequence, many of these letters and phone calls were destined for outdated addresses or numbers. Many disability recipients suffer from severe mental illnesses, and there is concern that they will have a difficult time with the Social Security Administration bureaucracy. There is also concern that the first notification some former Safety Net clients will receive of the situation is an eviction notice.
“People are not really understanding what’s happening and why, and what it’s going to mean to transfer their payee representative and what happens if they can’t,” Marc Jolin, the executive director of the homeless outreach agency JOIN, told Street Roots. “We’ve got people coming into JOIN asking those questions pretty regularly, not really understanding what’s happening and looking for help trying to navigate the situation.”
Some former Safety Net clients suffer from severe paranoia or other ailments and are resistant to entering a Social Security office where they have to go through a security checkpoint, not unlike those at courthouses – a place many associate with going to jail.
The worry is palpable in Eric Cothrell’s voice when reached by phone. Cothrell, a 50-year-old former client of Safety Net, saw the sign at the nonprofit’s office telling him he needed to go to the Social Security office to find a new payee. He says he heard something about an “appeal” regarding the situation and seems confused and distraught. He says he has had a death in the family recently and he’s been doing “really shitty.” He says he hasn’t gone into the Social Security office to get assigned a new payee, and it’s unclear if he understands that he needs to or is going to. He is worried about getting his rent paid.
Street Roots vendor John Munro, 57, says he entrusted his inheritance to Safety Net, which has served as his payee for the past 10 years. Munro, who has a handle bar mustache and punctuates his ragged voice with a boisterous laugh, isn’t quite sure what’s going on with his money at Safety Net.
“I just hope I wasn’t ripped off,” he says. Munro was assigned another payee based in McMinnville, which he says he’s fine with as long as his bills are paid.
On March 14, Multnomah County Chair Marissa Madrigal sent a letter to Portland’s congressional delegation criticizing the Social Security Administration for not being proactive in ensuring that Safety Net’s clients would be smoothly passed off to new payees. The letter stated that the Social Security Administration did not do enough to contact former Safety Net clients and that it did not alert the county or other social service providers that it planned to take action against the nonprofit.
“The way that [the Social Security Administration] has gone about it has been totally unacceptable and disconnected from the reality of these peoples’ lives,” Madrigal told Street Roots. “I’m sure that they have good reasons for closing [Safety Net] down, but to send letters to people, many of whom are homeless and don’t have addresses, and call it a day, that’s totally unacceptable. It would be difficult for anyone who’s facing a disruption like this to their income to fix it in three weeks.”
Kathy Wilde, legal director for Disability Rights Oregon, says that it’s unreasonable for the Social Security Administration to put such a burden on such a vulnerable population. She also says it’s illegal.
On March 24, just days before Safety Net’s closure date of April 1, Disability Rights Oregon, the Oregon Law Center and the National Senior Citizens Law Center filed a complaint in federal court against the Social Security Administration. The complaint alleged that the administration violated the law by not assigning a new payee to every former Safety Net client, ensuring that their benefits wouldn’t be interrupted.
The complaint was filed on behalf of six of Safety Net’s clients, which are described as homeless or near homeless, as well as homeless outreach organization JOIN. The complaint states that these individuals either didn’t get notice from Social Security that they would need to find a new payee or have been unable to find one. With their benefits about to be suspended, some of these individuals faced the imminent possibility that they would be unable to pay rent and would be evicted, according to the complaint. One of them would be unable to make payments he owes as part of his probation and may go back to jail.
JOIN would have had its finances and resources strained as it devotes more aid to former Safety Net clients, according to the complaint. JOIN’s contractual obligation with the City of Portland to move a certain number of homeless individuals off the street could be harmed by Safety Net’s closure, the complaint states.
When the Social Security Administration’s regional manager, Cory Burgess, was informed that some Safety Net clients suffer from paranoia and are reluctant to step foot in a government office he is quoted in the complaint as replying, “Well, they’ll be in next month when they don’t get their money.”
But that could be too late. Without those checks, bills and rent go unpaid.
During the March 26 court hearing regarding the lawsuit, Janice Hebert, assistant U.S. attorney, told U.S. District Judge Marco Hernández that the Social Security Administration had been proactive in attempting to find new payees for Safety Net clients. She said that Share & Care House, a Washington-based nonprofit, has been actively working to enroll Safety Net clients in its payee service.
“It’s simply not good enough to transfer over to another organization,” she said, noting that Safety Net’s records are a mess. “That’s the problem.”
She also said that she expected there to be a wave of people at the Social Security Administration offices after the first of April when they realized there was a problem. At this point, she said clients would be issued an emergency check and signed up with a new payee.
Hernández disagreed with this approach and ruled that the Social Security Administration would be required to assign a new payee to each Safety Net client that hadn’t found one. Since the court ruling, it’s been crunch time to find new payees for Safety Net’s clients.
“The Social Security Administration is working around the clock and through the weekend to ensure that beneficiaries receive their April payments in full and on time,” said Stanley Friendship, Social Security regional commissioner, in a prepared statement issued March 28.
Kathleen Roy, director of mental health services at Central City Concern, a large social service agency with its own payee program, said that she had received no outreach or coordination from the Social Security Administration.
Central City Concern picked up 17 new clients for its payee program, which has capacity for between 110 and 120 clients, at a very rapid rate, which has been stressful for staff, she said.
“Thirty days is not enough time to transition people and there has not been any flexibility around the rules in terms of how people get set up and established,” she said.
Additionally, Roy said that some Safety Net clients were released from the requirement that they have a payee and were granted control of their own money by the Social Security Administration, which might be fine in some cases. However, “since the process to establish a payee in terms of a medical/clinical opinion has not been used to determine if folks are ready based on skill development to assume the responsibility of managing money, it seems contradictory to have evaluation to determine the need and then a crisis with an agency to be the basis for removing that requirement,” she said.
There are about a dozen payee services in the Portland area that have a wide range in capacity. Since Safety Net’s closure, some have been open to taking new clients. But many of Safety Net’s clients appear to be going to out-of-town operations.
Share & Care House, a large social services agency based in Pierce County, Washington, has had a presence in Portland’s Social Security office since early March to sign up Safety Net clients for its payee service. Currently, Share & Care House has 1,800 payee clients in Oregon and Washington, says Charlene Hamblen, the nonprofit’s executive director. Hamblen anticipates that Share & Care House will take about 700 of Safety Net’s clients. She also said Share & Care House is looking into setting up a more permanent presence in Portland so clients won’t have to make the trek to its office in Tigard to pick up checks.
“The one thing I’ve noticed being down here is that despite it being a difficult situation, everyone has been so cooperative,” says Ann Mohageri, regional communications director for the Social Security Administration, speaking to Street Roots on a shuttle bus that’s been arranged to transport Safety Net’s clients from the nonprofit’s soon-to-be-shuttered office to the Social Security office downtown. “Everyone just wants to help.”
It’s the morning of April 1, and the bus, says Mohageri, will be running all week so that Safety Net clients who show up expecting a check as usual can get a new payee quickly. Mohageri says the Social Security Administration has been aggressively getting the word out about the situation, working with local social service agencies and handing out fliers at places where Safety Net clients might be.
During the morning, two people took the bus. Both of them say they heard about the situation word-of-mouth.
At the Social Security office, Wilde, of Disability Rights Oregon, is there making phone calls and monitoring the situation. She says that she’s still having trouble with the Social Security Administration.
The Social Security Administration told her that the clients still need to come into the office to seal the deal, which she says defeats the whole point of the court order. Recent estimates suggest that more than 100 former clients are still without a payee, a situation that concerns Wilde.
“That’s going to be a lot of rent not paid,” she says.
Monica Goracke, managing attorney for the Oregon Law Center’s Portland office, says that after the judge’s ruling, the Social Security Administration went to great efforts and went outside of its normal procedures to prevent Safety Net clients from having their benefits disrupted. This point was made by Hernández, says Groacke, during an April 8 follow-up hearing on the court order.
However, Goracke says that there are still 130 former Safety Net clients who’ve been assigned to Share & Care House but still have not made it to the offices of the nonprofit nor the Social Security Administration to finalize the arrangement. Goracke says that some of these individuals could be in the hospital or even deceased. She says some may have left town and some might still get an eviction notice.
“Once people come to Safety Net or Social Security there are good procedures to get them their money,” says Goracke. “It’s just a matter of where they could be.”
