Wal-Mart Stores and Xerox Corp points fingers at each other on food stamp glitch

October 14
9:40 PM 2013

Wal-Mart Stores Inc and Xerox Corp placed the blame on one another after Louisiana food stamp beneficiaries decimated the grocery section of some Walmart stores in Louisiana. The recipients were able to use their Electronic Benefit System (EBT) debit cards that did not have limits.

Wal-Mart's Bentonville, Arkansas Headquarters Spokeswoman Kayla Whiting said Xerox was the source of the problem. Xerox is the contractor for the EBT system. In a written statement, however, Xerox Corporate Spokesman Bill McKee said they had a documented process that retailers must follow in case of EBT outages.

The EBT system for the food stamp program is big business for contractors. According to an article by Peter Schweizer that appeared in The Daily Beast last year, the bulk of administering the EBT card programs for 49 states were awarded to three companies. These are JP Morgan subsidiary JP Morgan Electronic Financial Services Inc, Xerox through its subsidiary Affiliated Computer Services and Fidelity National Information Services subsidiary eFunds Corporation.

Although national data on EBT contracts are not reported, Schweizer was able to find financial data on how much JP Morgan earns from the contracts. Of the 24 states that JP Morgan handles, 18 have been contracted to pay the lender USD 560,492,596.02 since 2004. Starting 2007, Florida paid the bank USD 90,351,202.22. Meanwhile, Pennsylvania's seven-year contract reached USD 112,541,823.27 while New York's reached USD 126,394,917.00.

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