Welfare cards used at out-of-state liquor stores, strip clubs

Dec 15, 2010

Some Washington welfare recipients are withdrawing cash at out-of-state liquor stores, smoke shops and even strip clubs. That’s the finding of a public radio investigation into welfare debit card use outside Washington’s borders. The finding comes at a time when the state’s welfare program is $82 million in the red.

The Safari Showclub bills itself as Portland’s finest Rock N Roll strip club. Manager Paul Le says there are plenty of ways to spend your hard earned cash:

“Tip the dancers, get lap dances, gamble, video poker.”

Need some cash? The Safari conveniently has an ATM machine on-site. And that’s where this September a Washington welfare debit card was used to withdraw money. Now there’s no proof that cash was actually spent inside the Safari Club. But manager Paul Le admits it doesn’t look good:

“I’m appalled that somebody would get state dollars to help them out and would spend that kind of money in that way. That money’s supposed to go to help them and their family.”

The Safari isn’t the only Portland strip club that shows up on a database we requested of out-of-state cash withdrawals by Washington welfare recipients. There are transactions at Mystic Gentlemen’s Club. Soobies. Frolics. Docs Club 82. The Cabaret Lounge. And The Silverado, which features male exotic dancers. And it’s not just nude clubs.

In the month of September, we found nearly a hundred questionable cash withdrawals: at liquor stores in California and Hawaii, Idaho smoke shops, Montana casinos, not to mention bars all over the country.

“Speaking for myself as a taxpayer, yes, I think those things are inappropriate use,” says Thomas Shapley.

But Thomas Shapley, with Washington’s Department of Social and Health Services, says there’s no formal prohibition against using welfare cash on booze, cigarettes or even strippers. In fact he tells us state law only says you can’t use the money to gamble.

We then asked Shapley, “Does this agency think maybe there should be, if not additional state laws saying you can’t do this or that, at least guidance to this user that this would be an appropriate use of the cash?”  Shapley responded:

“I think that would be a fine idea. We’ve talked about it here about doing a little better public outreach.”

Shapley says it would be up to the legislature to go beyond the current ban on gambling with welfare dollars to include other no-nos. But Republican State Senator Joe Zarelli doesn’t think investigating these kinds of cases would pay in the end:

“I think the better answer is to severely reduce as much as possible the amount of cash you’re putting in people’s pocket to use on things that we don’t want them to use.”

Zarelli advocates moving to a voucher system for Washington’s nearly $66,000 welfare recipients:

“For the necessities that that family needs, food, shelter, clothing, transportation.”

Robin Zukoski is an attorney who’s represented welfare families for thirty years. She thinks this issue is a distraction:

“It’s tremendously expensive from an administrative point of view to run a voucher program.”

Zukoski says welfare clients in strip clubs are not the reason Washington’s welfare system is $82M in the red. She says that’s because the economy has hammered families and the state budget and the program has experienced a 30 percent growth in demand:

“We’re asking low-income families to survive on a very small amount of money each month. For a family of three, it’s about $542. However they can we work that magic and live within the limited means that they have we should not be questioning or judging or second-guessing where they’re spending the money or where they’re getting the cash benefits.”

Washington’s Department of Social and Health Services does electronically monitor out-of-state welfare card use. But the focus is identifying people who have moved out-of-state but are still collecting Washington welfare benefits. In fact, in September the agency cut fifty-five of them from the program after determining they no longer reside in Washington.