Politics

January 8

LePage: Transaction records show welfare cards abused

Purchases made at businesses that sell alcohol and tobacco were improper, he says. But many of those places offer other items and have ATMs, so the extent of misuse is unclear.

By Steve Mistler smistler@pressherald.com
Staff Writer

The LePage administration released data Tuesday that it says shows Mainers on welfare used Electronic Benefit Transfer cards to make thousands of purchases at bars, smoke shops and liquor stores.

click image to enlarge

At top, a Portland man uses a food stamp card to buy groceries in 2008. Above, Scott Parker, owner of the Griffin Club in South Portland, pours a beer Tuesday. His club was one of many establishments where misuse of EBT cards may have occurred, according to transaction data released by the LePage administration. Parker said his business accepts cash only, but has an ATM inside where an EBT card can be used. He said people shouldn’t buy alcohol and cigarettes with their welfare cards, but there’s no way for him to track when it’s happening at his club.

Top: 2008 Press Herald photo; above, Shawn Patrick Ouellette/Staff Photographer

click image to enlarge

Additional Photos Below

But it’s unclear whether any of the transactions were illegal, because the state said it doesn’t know what was purchased and because many of the businesses have ATMs that card holders can use to make cash withdrawals.

Gov. Paul LePage’s focus on the issue reflects a national controversy over the use of EBT cards, which has led to crackdowns in some states.

LePage, who has targeted welfare fraud and made it an issue in his re-election campaign, said the purchases were a misuse of the EBT cards issued through the Temporary Assistance for Needy Families program.

The data shows that from Jan. 1, 2011, to Nov. 15, 2013, more than 3,000 transactions were made at more than 20 smoke shops, which primarily sell tobacco products. Another 650 transactions occurred at bars, pubs or strip clubs, the data shows.

The administration said the benefit cards were used in all 50 states, including at a liquor store in New Hampshire that had transactions totaling close to $8,000.

Although the data suggests fraud or inappropriate use of benefits, a spokesman for the Department of Health and Human Services, which administers the program, said the state doesn’t know what was purchased with the EBT cards.

Many of the businesses described as smoke shops also function as convenience stores, selling food and other products. Also, many of the businesses have ATMs, so an EBT transaction recorded at a smoke shop or bar may actually be a cash withdrawal from an EBT account.

The DHHS says about 50,000 EBT transactions are made each month. At that rate, there were about 1.725 million transactions made from January 2011 to Nov. 15, 2013, the period when the administration found 3,701 transactions that it says were inappropriate. That means the inappropriate transactions accounted for about two-tenths of 1 percent of all EBT use during that period. There are about 224,000 active EBT cards in Maine, the DHHS says.

LePage’s media release did not include the dollar value of the transactions in question, so it’s not clear how much of the budget for the Temporary Assistance for Needy Families program they represent. The DHHS allocated $192.5 million to the program and its associated work program, ASPIRE, in 2012.

The governor said in a written statement that the data is “eye-opening” and shows that misuse of EBT cards is a larger problem than initially thought.

“These benefits are supposed to help families, children and our most vulnerable Mainers,” LePage said. “Instead, we have discovered welfare benefits are paying for alcohol, cigarettes and other things hardworking taxpayers should not be footing the bill for.”

SPOTTY CONTROL OF BENEFIT USE

In 2012, the governor signed a law that prohibited the use of EBT cards at gambling facilities, strip clubs, and retail establishments where 50 percent or more of the revenue is derived from liquor sales.

The data released by the administration Tuesday suggests that enforcement of that law is not proceeding as intended. It also raises questions about how the state can effectively control the way benefits are spent if the aid program allows recipients to use EBT cards to get cash.

The administration said it is continuing to coordinate efforts by the DHHS, the Bureau of Alcoholic Beverage and Lottery Operations and the Department of Public Safety to identify stores and establishments where EBT transactions are prohibited under the 2012 law.

LePage announced recently that he plans to submit a bill to further restrict where EBT cards can be used. Democratic leaders in the Legislature have expressed a willingness to support the measure.

(Continued on page 2)

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Additional Photos

click image to enlarge

An ATM, left, is available for customer use Tuesday at the Griffin Club in South Portland. The EBT data released by the state Tuesday did not specify whether transactions were purchases or ATM withdrawals.

Shawn Patrick Ouellette/Staff Photographer

  


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