The short answer is no.
In January 1979, Senator Alan Cranston (D-California) scheduled a hearing on allegations of welfare fraud by Peoples Temple. Cranston acted on what turned out to be erroneous information.
The problem began when the California Social Services Department Director for Mendocino County claimed that Peoples Temple had cared for 150 foster children at one time or another. Cranston believed this meant that Peoples Temple had 150 foster children in its care on November 18 and, by extension, that most had died in Jonestown. The California Senator asked the General Accounting Office to learn if federal dollars had been spent on those children while they lived in Guyana. That kind of payment was illegal, since the children would have lost eligibility once they left the U.S.
Although preliminary figures came out a few months after Cranston’s hearing, the GAO’s final report didn’t appear until the end of 1980. According to the GAO, of the 294 children under age 18 who died in Guyana, 17 had been in foster care prior to their move to Guyana. However, only one child was in active foster care at the time of emigration, and that child survived the mass deaths. (The text of the two GAO reports appears here.)
While foster children ultimately did not pose financial or moral problems for the government, over twenty children in guardianship care did. The State of California estimated that $20,000 had been overpaid under Aid to Families with Dependent Children. Adults in the Temple who maintained legal guardianships received these payments. Overpayment occurred when checks were issued to guardians who had moved to Guyana. Although some unwarranted payments were made, they generally happened by mistake, and welfare officials quickly caught the problem. An investigation by the California Attorney General’s office also found that children in guardianship custody had permission to move to Guyana from at least one parent or guardian.
Because the Temple had extensive welfare dealings in California, the State Attorney General’s office studied the group’s relationship with local welfare officials. The Investigative Report, prepared by the Deputy Attorney General, concluded that there had been no collusion or unusual involvement. In addition to its own findings, the report noted the Mendocino Grand Jury’s investigation of the Temple after the suicides. “The county welfare fraud investigation was closed,” the report observed, “as no evidence of welfare fraud involving members of Peoples Temple was found. Welfare Director Dennis Denny agreed that no fraud had been found in his search of county social service records…
“All cases of welfare fraud uncovered by the counties were frauds perpetrated by individuals for personal gain and were not part of any conspiracy by Peoples Temple to finance its operations by fraudulently obtaining public monies.”
While there was apparently no evidence of welfare fraud, there are also reports that Peoples Temple took advantage of the system. According to Raven, Denny believed that one reason for the Temple’s relocation to Ukiah was Jones’ recognition – and appreciation – of Mendocino County’s policy on board-and-care homes for mental hospital patients. The Temple abided by county rules – the ten homes set up by the church were clean, and county inspectors found that everyone in the homes to be eligible for aid – but the homes also generated a great deal of revenue for Temple coffers.
Tim Reiterman also reports in Raven that the Temple went around the county to take custody of foster children: “with state aid, the Temple would set up foster homes housing orphans or problem children imported from the San Francisco Bay Area. Soon, as planned, probation offices from all over California were sending children to the Temple, bypassing Denny. The welfare director told the Temple that they had to license their foster homes. After twenty-four months of being stalled, he threatened prosecution. The Temple then circumvented the law by securing ‘guardianships’ for the children, obviating the need for foster home licensing.”
While undoubtedly manipulative, none of these actions rose to the level of fraud.
(The information above was adapted from A Sympathetic History of Jonestown, by Rebecca Moore (Lewiston, NY: The Edwin Mellen Press, 1985), pp. 363-364, 366, and from Raven by Tim Reiterman and John Jacobs (New York: E.P.Dutton, Inc., 1982) p. 155.)