by Health Impact News/ Staff

The Business Empire of “Child Protection”

Child Protective Service is big business – to the tune of billions of dollars.

Many allege that federal funding is the root of the problem with CPS, and that the real incentive is perpetuating a lucrative business employing tens of thousands of people, and not protecting children. Whenever there is evil or corruption, often all one has to do is “follow the money.” The Bible says it best: For the love of money is the root of all evil.

So, how did we get here?

The 1974 Child Abuse Prevention and Treatment Act (CAPTA), or the “Mondale Act,” is the federal law that birthed Child Protective Services (CPS) as we know it today. This law created a new lucrative revenue for the states via federal funds to remove children from their homes based on “child abuse,” and place them in foster care. CAPTA mandated abuse reporting by certain professions and at the same time gave them complete immunity from criminal prosecution or civil liability, even if their allegations were completely erroneous. Since “child abuse” was not even defined in CAPTA, any number of things could be construed as “abuse.”

According to Nev Moore, an advocate and writer for child services reform:

The money goes to tens of thousands of a) state employees, b) collateral professionals, such as lawyers, court personnel, court investigators, evaluators and guardians, judges, and c) DSS contracted vendors such as counselors, therapists, more “evaluators,” junk psychologists, residential facilities, foster parents, adoptive parents, MSPCC, Big Brothers/Big Sisters, YMCA, etc. This newspaper is not big enough to list all of the people in this state who have a job, draw a paycheck, or make their profits off the kids in DSS custody.

In 1974 Walter Mondale promoted the Child Abuse and Prevention Act which began feeding massive amounts of federal funding to states to set up programs to combat child abuse and neglect. From that came Child “Protective” Services, as we know it today. After the bill passed, Mondale himself expressed concerns that it could be misused. He worried that it could lead states to create a “business” in dealing with children.

Then in 1997 President Clinton passed the “Adoption and Safe Families Act.” The public relations campaign promoted it as a way to help abused and neglected children who languished in foster care for years, often being shuffled among dozens of foster homes, never having a real home and family. In a press release from the U.S. Department of Health & Human Services dated November 24, 1999, it refers to “President Clinton’s initiative to double by 2002 the number of children in foster care who are adopted or otherwise permanently placed.”

In the “technical assistance” section of the bill it states that, “the Secretary [of HHS] may, directly or through grants or contracts, provide technical assistance to assist states and local communities to reach their targets for increased numbers of adoptions for children in foster care.” The technical assistance is to support ‘the goal of encouraging more adoptions out of the foster care system; the development of best practice guidelines for expediting the termination of parental rights; the development of special units and expertise in moving children toward adoption as a permanent goal; models to encourage the fast tracking of children who have not attained 1 year of age into pre-adoptive placements; and the development of programs that place children into pre-adoptive placements without waiting for termination of parental rights. (Source: Adoption Bonuses: The Money Behind the Madness )

Initially funds came from uncapped Title IV-D funds that made foster care extremely profitable, and the official belief was that abused children were better off in foster care, and for as long as possible. One of the problems with these funds is that they were highly controlled by the federal government on how the states could spend the monies.

John Van Doorn ran for San Diego Supervisor in 2010. Wanting to reform Child Protective Services, he said:

The single greatest threat to the people of San Diego County is our county’s (as well as the state’s) abuse of Title IV-D programs (Child Protective Services, Child Support Services, foster care and adoptions, VAWA, etc.).

Mandated by federal government, these programs are intended to provide a social safety net for our children and the elderly and a deterrent to domestic violence but instead, they have become a means by which our local governments extract great profits. In exchange for providing these services, the federal government reimburses local governments for the cost of providing these services—at times, greatly in excess of the cost of that service. As such, our local governments find themselves sorely tempted to provide a service where one is not necessarily warranted (since reimbursements grow as the amount of services rendered grows), and unfortunately all too often where the provision of unneeded services ends up being destructive in the lives of those “served.”

For instance, in the case of foster care, the present reimbursement to state and local government for each child taken into foster care is approximately $6000/month. Yet the foster care provider (the foster parent) receives only somewhere around $600/month. Allowing about the same for administrative costs, each child in foster care is worth about $5000/month; that’s pure profit on the bottom line! (Source: On Child Protective Services, Part 4: Follow the Money)

Picking Your Child: The Child Trafficking Business


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With the passing of the Adoption and Safe Families Act in 1997 (ASFA), came the Title IV-E funds, which now limited the amount of money available for each child in foster care, and instead encouraged incentives for adoptions, creating a cash stream that was loosely regulated and could be easily siphoned into the state’s general budget. Critics of ASFA claim that abused children are often returned home after their foster care funds are maxed when they become a liability to the state’s coffers (since abused children are not considered adoptable), and that more children who aren’t in imminent danger of abuse are being placed into foster care since they are more attractive adoption commodities.

According to Nev Moore:

Very few children who are being used to supply the adoption market are hollow-eyed tykes from Appalachia. Very few are crack babies from the projects. [Oh… you thought those were the children they were saving? Think again.] When you are marketing a product you have to provide a desirable product that sells. In the adoption business that would be nice kids with reasonably good genetics who clean up good.

Clinton directed HHS to develop an Internet site to “link children in foster care with adoptive families.” So we will be able to window shop for children on a government web site. If you don’t find anything you like there, you can surf on over to the ‘Adopt Shoppe.’ (Source. Adoption Bonuses: The Money Behind the Madness)

There is no shortage of children entering foster care and subsequently being adopted out, as one can see from the Adoption and Foster Care Analysis and Reporting System (AFACRS) below:

From Foster Care to Adoption, Lots of Money to be Made

In the article Where the Money Comes From: Paying for Child Welfare Services, Tim Ross declares:

The United States spent almost $26 billion on child welfare services in federal fiscal year 2006, the last year for which detailed information is available.  The federal government provided over $12 billion, state governments almost $11 billion, and local governments almost $3 billion. This money comes from numerous programs: at least 43 separate federal funding streams can be used to pay for child welfare services.

Most federal funding, however, comes from five sources: Titles IV-B and IV-E of the Social Security Act, the Social Services Block Grant, and Temporary Aid to Needy Families, and Medicaid. Because federal regulations require that states provide matching funds to claim reimbursement for most of these programs, federal funding plays a large role in how states and localities spend their own child welfare dollars.

Title IV-E is the largest source of federal funds, accounting for $6 billion of spending.  Title IV-E is an entitlement program that provides states with funding for foster care, adoption assistance, youth transitioning out of foster care to adulthood (funded through the Chafee Act) and administration. Generally, IV-E funding is based on the number of children receiving assistance and for children in foster care, the number of days in care. Only children from families that meet the eligibility criteria for the Aid to Families with Dependent Children program, which ended in 1996, are eligible for Title IV-E.

Title IV-B provides about a tenth of the annual funding of IV-E ($637 million) and can be used for services to prevent child maltreatment, to help reunify families, and to maintain a qualified workforce, among other uses. Unlike Title IV-E, Title IV-B funding is capped—a fixed amount is allocated to each state each year.

Both the Temporary Assistance to Needy Families (TANF) and Social Security Block Grant (SSBG) programs can be used by states for many social services, of which child welfare is only one.  The amounts allocated by states to child welfare from TANF and SSBG vary from year to year. Arkansas, for example, more than doubled its TANF spending on child welfare services between FY2004 and FY2006, while New Mexico eliminated TANF funds for child welfare during the same period. In 2006, states spent $2.3 billion from TANF and $1.6 billion from SSBG on child welfare.

Medicaid also covers some child welfare services, above and beyond standard health care expenditures for regular checkups, dental work, and the like.  These services include targeted case management or rehabilitative services, such as behavioral health and some residential care services.  Medicaid spending on child welfare services came to almost $1.4 billion, though some states were not able to break out this spending from other Medicaid expenditures.

The structure of federal financing provides strong support to some types of child welfare services and comparatively little to others.  Federal funding, for example, may provide up to 83 percent of the cost of foster care in some states, as well as significant subsidies to families who adopt children from foster care. Funding for services to prevent placement in foster care and to help children already in foster care reunify with their families is much less.

To see how your state spends these funds, click the link on the map below:

Financial Incentives for States to Adopt Out More Children

There are 4 main streams of funding a state can receive from adoption incentives, according to the Adoption Incentives Awards by Category for Earning Years 2008–2012 (Updated September 2013):

The Fostering Connections to Success and Increasing Adoptions Act of 2008 (Public Law [P.L.] 110-351) reauthorized the Adoption Incentives payment program under part E of the Social Security Act. Under this reauthorization, states can earn incentive funds for increasing the number of children adopted in certain circumstances. There are four categories under which states can earn Adoption Incentive awards:

Exceeding a baseline number of foster child adoptions: States must exceed their 2007 baseline number of foster child adoptions to be eligible for incentive awards in this category. States earn $4,000 for each foster child adopted that is above the baseline number.

Exceeding a baseline number of older child (age 9 or older) adoptions: States must exceed their 2007 baseline number of older child (age 9 or above) adoptions to be eligible for incentive awards in this category. States earn $8,000 for each older child adopted that is above the baseline number.

Exceeding a baseline number of special needs child (under age 9) adoptions: As provided in the law, states that exceed their special needs adoption baseline do not earn an incentive for this increase unless, in that same fiscal year, they separately earned an incentive for increases in foster care or older child adoptions, or they exceeded their highest ever adoption rate. States earn $4,000 for each special needs child adopted that meet this criterion.

Exceeding the state’s highest ever adoption rate: A state is eligible for an adoption rate incentive award if they achieve their highest ever foster child adoption rate between FY2002 and the most recent FY. If the current earning year’s adoption rate is the highest, that rate is multiplied by the number of children in foster care on the last day of the preceding fiscal year. That result is then subtracted from the number of foster child adoptions in the state in the current earning year. The difference is then rounded to the nearest whole number and multiplied by $1,000. However, Adoption Rate incentive awards may only be paid if there are sufficient funds remaining after the awards are made for increased numbers of adoptions in the other three award categories (Foster Child Adoptions, Older Youth Adoptions, and Special Needs Adoptions).

The following chart shows the Adoption Incentive Awards History by State from 1998-2014.

“Abused” Children or Just Poor? Are We Punishing Poverty? 

Many of the children entering foster care (and subsequently being adopted) are not children in imminent danger of being victimized by sexual or physical abuse, but are children branded as “neglected” or deprived  of “necessities” due to poverty.

According to the Child Welfare Information Gateway:

Neglect is frequently defined as the failure of a parent or other person with responsibility for the child to provide needed food, clothing, shelter, medical care, or supervision to the degree that the child’s health, safety, and well-being are threatened with harm. Approximately 25 States, the District of Columbia, American Samoa, Puerto Rico, and the Virgin Islands include failure to educate the child as required by law in their definition of neglect. The States that define “failure to educate” as neglect include Arkansas, Colorado, Connecticut, Delaware, Idaho, Indiana, Kentucky, Maine, Minnesota, Mississippi, Missouri, Montana, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Dakota, Ohio, Pennsylvania, South Carolina, South Dakota, Utah, West Virginia, and Wyoming. Nine States and American Samoa specifically define medical neglect as failing to provide any special medical treatment or mental health care needed by the child. Arkansas, Mississippi, Iowa, North Dakota, Ohio, Oklahoma, Tennessee, Texas, and West Virginia. In addition, four States define medical neglect as the withholding of medical treatment or nutrition from disabled infants with life-threatening conditions.

According to one frequently cited federal study, children in families earning below $15,000 a year are 22 times more likely to be considered maltreated as kids in families with incomes above $30,000. It is also well known that these parents cannot afford private attorneys to represent them and fight to get their children back. They must rely on court-appointed attorneys who are generally quick to encourage them to settle with the State, and lose all custody of their children.

Nancy Schaefer, who died advocating for families’ rights against a corrupt CPS system, agreed saying:

Poor parents very often are targeted to lose their children because they do not have the where-with-all to hire lawyers and fight the system. Being poor does not mean you are not a good parent or that you do not love your child, or that your child should be removed and placed with strangers. (Source: The Corrupt Business of Child Protective Services)

The Destruction of the American Family: Federal Funds Available for Foster and Adoptive Parents, but NOT Birth Parents

Nev Moore explains how federal money is available to help foster and adoptive parents, but not the birth parents:

After the adoption is finalized, the State and federal subsidies continue. The adoptive parents may collect cash subsidies until the child is 18. If the child stays in school, subsidies continue to the age of 22. There are State funded subsidies as well as federal funds through the Title IV-E section of the Social Security Act. The daily rate for State funds is the same as the foster care payments, which range from $410-$486 per month per child. Unless the child can be designated “special needs,” which of course, they all can.

The adoptive parents also receive Medicaid for the child, a clothing allowance and reimbursement for adoption costs such as adoption fees, court and attorney fees, cost of adoption home study, and “reasonable costs of food and lodging for the child and adoptive parents when necessary to complete the adoption process.” Under Title XX of the Social Security Act adoptive parents are also entitled to post adoption services “that may be helpful in keeping the family intact,” including “daycare, specialized daycare, respite care, in-house support services such as housekeeping, and personal care, counseling, and other child welfare services.

According to Cornell University, about 68% of all child protective cases “do not involve child maltreatment.” The largest percentage of CPS/DSS cases are for “deprivation of necessities” due to poverty. So, if the natural parents were given the incredible incentives and services listed above that are provided to the adoptive parents, wouldn’t it stand to reason that the causes for removing children in the first place would be eliminated? How many less children would enter foster care in the first place? The child protective budget would be reduced from $12 billion to around $4 billion. Granted, tens of thousands of social workers, administrators, lawyers, juvenile court personnel, therapists, and foster parents would be out of business, but we would have safe, healthy, intact families, which are the foundation of any society. (Source. Adoption Bonuses: The Money Behind the Madness)

As shown in the chart from page 57 of the U.S. Department of Health & Human Services’ Child Maltreatment 2014 Manual, three-quarters (75.0%) of victims were neglected, 17.0 percent were physically abused, and 8.3 percent were sexually abused.

The System is Beyond Repair – Federal Funding Must Stop

I have witnessed such injustice and harm brought to these families that I am not sure if I even believe reform of the system is possible! The system cannot be trusted. It does not serve the people. It obliterates families and children simply because it has the power to do so. Children deserve better. Families deserve better. It’s time to pull back the curtain and set our children and families free. – The Late Congresswoman Nancy Schaefer of Georigia

Many assert that CPS has become a business based on moving children from one home (the birth home) and into another (state custody foster care, group home, or adoptive home) in order to turn on the tap to get the federal funds flowing, and is not a system concerned with protecting children from abuse. Brian Shilhavy, editor of Health Impact News, refers to this as state-sponsored “child trafficking.”

Nancy Schaefer summarizes:

I am convinced there is no responsibility and no accountability in Child Protective Services system. I have come to the conclusion:

  • that parenting classes, anger management classes, counseling referrals, therapy classes and on and on are demanded of parents with no compassion by the system even while the parents are at work and while their children are separated from them. (sometimes parents are required to pay for the programs) This can take months or even years and it emotionally devastates both children and parents. Parents are victimized by “the system” that makes a profit for holding children longer and “bonuses” for not returning children to their parents;
  • that caseworkers and social workers are very often guilty of fraud. They withhold and destroy evidence. They fabricate evidence and they seek to terminate parental rights unnecessarily. However, when charges are made against Child Protective Services, the charges are ignored;
  • that Child Protective Services and Juvenile Court can always hide behind a confidentiality clause in order to protect their decisions and keep the funds flowing. There should be open records and “court watches”! Look who is being paid! There are state employees, lawyers, court investigators, guardian ad litems, court personnel, and judges. There are psychologists, and psychiatrists, counselors, caseworkers, therapists, foster parents, adoptive parents, and on and on. All are looking to the children in state custody to provide job security. Parents do not realize that the social workers are the glue that hold “the system” together that funds the court, funds the court appointed attorneys, and the multiple other jobs including the “system’s” psychiatrists, therapists, their own attorneys and others.
  • that if the lives of children were improved by removing them from their homes, there might be a greater need for protective services, but today children are not safer. Children, of whom I am aware, have been raped and impregnated in foster care;
  • it is a known fact that children are in much more danger in foster care than they are in their own home even though home may not be perfect; (Source: The Corrupt Business of Child Protective Services)


Senator Nancy Schaefer: Did her Fight Against CPS Child Kidnapping Cause her Murder?

Nev Moore argues:

Although CPS has always tried to buffalo the media and the public that they are involved with families due to some sort of horrific child abuse or neglect, there has never been any debate among national policy makers, researchers, and federal agencies that the vast majority of CPS cases are due to poverty or frivolous/social reasons and do not contain elements of real child abuse. If the cases did actually involve acts of abuse they would be criminal, identified and investigated by law enforcement, rather than social workers, and would be prosecuted as such. P.L. 96-272 came into effect partly because Congress determined that a large number of children were being unnecessarily removed from their homes, and, once removed, they were lost in the limbo of foster care for years, many until they just grew too old, when they were then put on the streets at the age of 18.

By seizing children illegally in violation of the Title IV-E requirements, then filing false documents in secrecy through the courts to obtain federal funding, CPS is defrauding the federal government with intent. CPS should be subject to investigation and prosecution by the U.S. Attorneys Office. They should be held liable for the restitution of all illegally obtained funds, and prosecuted for perjury, obstruction of justice, and the fraudulent collection of federal funds under the False Statements and Accountability Act of 1996, P.L. 104-292 110 stat 3459, 42 U.S.C.S. 670-679a; P.L. 96-272; C.F.R. part 1356; and Title IV-E. I have discussed this issue with the Inspector Generals Office and they felt it could possible be prosecuted under RICO, yet they have also failed to act, possibly because it isn’t just CPS/DSS who is committing federal fraud, but also the judges who are signing the documents.

In 1988 George Miller, the original architect of P.L. 96-272, and Chairman of the congressionally appointed Select Committee on Children, Youth, and Families, recognized the fraud being committed in the name of child “protection,” and stated:

“What has been demonstrated here is that you have a system that is simply in contempt. This system has been sued and sued and orders have been issued and they just continue on their merry way. And HHS just continues to look the other way. You have a system that is not only out of control, it’s illegal at this point. What you are really engaged in is state sponsored child abuse.” (Source. State’s Child Protection Agencies Collude with Judges to Defraud Federal Government)

According to Jim Barrus of Constitutional Concepts Foundation:


Eventually the people will reach the point our Founders Fathers described and demand redress for the unconstitutional actions that have been perpetrated against them by the government.

There isn’t enough money in the world to pay for the pain and suffering. And, it’s not just the parents and the kids who have suffered, it’s the grandparents, the aunts, the uncles, and the cousins. (Source: Kidnapping for Profit by Child Protective Services)