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Company Sells What People Can Get For Free

March 7, 1990

WASHINGTON (AP) _ It cost the government $185,000 to tell people they bought Social Security information they could’ve gotten for free and didn’t get the right material at that.

The General Accounting Office on Wednesday issued a report on the Social Security Protection Bureau, a private company that has come under criticism for offering benefits considered by many to be of dubious value.

The $7 fee for membership in the bureau brings help in getting earnings information from the government’s Social Security Administration, information that is available for free directly from SSA, the GAO said.

The report said the bureau appears to operate ″without violating federal legal requirements″ - but not without cost to the government.

The Social Security Administration has processed more than 350,000 requests for earnings and benefit information generated by the private company, the GAO said.

It cost the government $900,000 to process those requests, including $185,000 in ″extraordinary expenses″ because the company had given people outdated government forms for requesting the earnings information.

The $185,000 was spent to send people letters ″explaining that they had spent $7 for what they could have received free and asking them to submit the new revised request form,″ the GAO said.

″At the same time, the Social Security Protection Bureau could have received $2 million in membership fees from those 350,000 new members.″

The Social Security Protection Bureau is the trade name for Foxhall Corp., which is controlled by Watson & Hughey Co., a partnership that has grown into a multimillion-dollar business promoting non-profit groups.

Watson & Hughey has been criticized because the partnership - not the charitable organizations - gets most of the money obtained from the public, the GAO said. Thirteen states have taken action against Watson & Hughey because of possible violations related to non-profit organizations and consumer protection.

Attorney Michael Kushnick, who represents Watson & Hughey, said he had not seen the GAO report but stressed the bureau’s operations ″did not violate the law.

Kushnick said if the information requests cost the government money, ″I think the benefits to the consumer in getting this information probably outweighed those costs.″

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