Census office survey scandal grows as inflation stats faked

New York Post – by John Crudele

The Census Bureau’s Philadelphia office wasn’t just corrupting the nation’s unemployment rate by fabricating data. It was also filing false information about inflation in this country.

Just how large an effect this fraud was having on the Consumer Price Index (CPI) — and consequently the cost of living adjustments for Social Security recipients and others — is not yet known.  

Some background: Along with its monthly unemployment survey, the Census Bureau conducts thousands of interviews to figure out what Americans are buying. Once Census determines purchases, the information is turned over to the Labor Department, which then calculates how much prices have increased.

The whole survey is very long, messy and unpopular, both inside government and outside. And it is likely to be changed drastically in the years ahead.

Despite that, the CPI is still the sole determinant for retiree and military pay increases. And it is used by the Federal Reserve, companies and a lot of other organizations that need to determine how fast costs are rising.

I began writing about what was happening in the Philly Census office back in November, when I learned that a data collector named Julius Buckmon had been caught in 2010 falsifying information that went into Labor’s Current Population Survey, which determines the nation’s unemployment rate.

Buckmon, however, was also working on the Consumer Expenditure survey, which goes into the CPI. And he was doing the same thing there that he was with the unemployment survey: making stuff up. In fact, because these surveys are scientifically weighted, Buckmon’s fabrications in the Labor survey could have given misleading data on around 500,000 families.

More background: The Commerce Department seems to have done a cursory review of Buckmon’s shoddy work after he was bagged in 2010. But it doesn’t appear to have done an official report, and it certainly didn’t make this transgression public.

And the Buckmon case was kept from Congress, even though Census did report to the House Oversight Committee a similar situation in 2010 that occurred in its Brooklyn office.

Why was the Buckmon investigation cut short? It could have been because Buckmon alleged that higher-ups in Philly told him to fabricate data. And it could also have been because others were doing the same thing.

In fact, a source with intimate knowledge of the Philly Census office says that’s exactly what was going on. Data falsification went beyond Buckmon, and this practice continued right up until I broke the story last November, the source says.

As I mentioned recently, the Philadelphia office has been hard pressed to meet its quota of interviews for the jobless survey, because it can’t cheat anymore. And the same thing is occurring with the quota for interviews that go into the inflation’s Consumer Expenditure survey and a diary component of that survey.

Labor requires that each Census region have a 75 percent success rate in the inflation survey. In other words, the regions must get 75 percent of the people contacted to give up info on how they are spending their money.

Since my November column, Philly is getting nowhere near that 75 percent benchmark. For February’s CPI, I’m told, the success rate was around 65 percent. (In comparison, I hear that the New York region is even lower, but Los Angeles and Atlanta both have been coming close to the quota.)

In other words, if Philly can’t cheat, it can’t reach its goal. In fact, I’m hearing that Labor has scolded Philly on its shortfalls, which recently resulted in a change of leadership on the inflation survey.

There’s no way for me to determine how much Philly’s fraud is costing the average retiree, if anything. Since Census’ inflation survey only reports the types of goods being purchased — with Labor attaching prices — it’s impossible for me to determine the magnitude of this part of the fraud.

But it is another thing that investigators need to look into.

Right now, the Buckmon incident and the accusations that others either condoned or ordered the falsifications are being looked into by the Oversight Committee, the Joint Economic Committee of Congress, the Commerce Department’s Office of the Inspector General and, I believe, the US Attorney’s Office in Maryland.

And I’m still looking into it. I have a Freedom of Information Act request into Commerce for any probe of Buckmon that might have taken place in 2010 or 2011, although I don’t think there were any. Commerce is fighting me on that, but The Post is bringing in a law firm to press the issue.

I will also have the e-mails of Buckmon’s supervisors soon, to see what the gang was chatting about around the time of the last presidential election.

On Tuesday, I will go through the ways statistical manipulation and redefinition of the CPI — rather than outright fabrication of the numbers — cheats Americans out of honest Cost-of-Living Adjustments.

http://nypost.com/2014/03/26/census-office-survey-scandal-grows-as-inflation-stats-faked/