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Welfare card can be swiped for booze, slots

By Hillary Chabot / Herald Exclusive
Friday, October 8, 2010

Bay State welfare recipients can play the slots, pick up a six-pack of beer or nab a flat-screen plasma TV under loosey-goosey Bay State restrictions that allow those on the dole to treat taxpayers’ wallets as their own personal ATM.

Recipients of the Department of Transitional Assistance programs get Electronic Benefits Transfer cards that work like regular debit cards, allowing them to withdraw cash from ATMs and use it for whatever they want – all with scant oversight by the state.

State officials were unable to say how many liquor stores and bars accept the EBT cards. Nor could they say for certain that welfare cash isn’t being used on Lottery tickets or even casinos.

The Herald review comes on the heels of a jaw-dropping expose by the Los Angeles Times that found California welfare recipients spent $1.8 million in taxpayer cash on casinos. Michigan legislators are also mulling a crackdown on welfare debit card use in casinos.

One Boston area bar owner told the Herald he was contacted this week by a company saying he could boost business by accepting EBT cards.

“I’m offended. The idea is welfare benefits are supposed to go to people who can’t work and are just barely getting by,” said the bar owner, who requested anonymity. “As a taxpayer I’m surprised the state wants to make it this easy to allow welfare recipients to misuse our money like this.”

State officials admitted there’s little oversight of the $392 million in cash assistance welfare benefits granted to 70,000 Bay State households – even though Gov. Deval Patrick created a task force to crack down on welfare fraud in 2008.

“This administration supports changing the rules to prohibit individuals and vendors from knowingly accepting EBT cash benefits for the purchase of alcohol or tobacco,” said Jennifer Kritz, a spokeswoman for the state welfare department.

Kritz admitted that because welfare recipients can simply withdraw cash, there’s nothing to prevent them from buying booze, butts or scratch tickets – or playing the slots at casinos.

“We encourage them to make healthy choices,” said Kritz, adding that families on transitional assistance need the flexibility of cash to purchase necessary nonfood items such as diapers, cookware and school supplies.

Businesses also can get in on the act. Owners can call their credit card processing company and ask to accept the EBT cards, Kritz said.

Affiliated Computer Services Inc. – a Texas-based company the state hired to manage the EBT card program in 2005 – keeps track of the transactions and vendors authorized to accept the cards, but Kritz couldn’t say whether the firm keeps an eye out for abuse.

Pete Sepp, spokesman for the National Taxpayers Union, said the lax oversight breeds public mistrust.

“These are tax dollars being gifted essentially to beneficiaries, and people need to be sure that they are spent properly,” Sepp said. “Some of these expenditures might not be just inadvisable – they might be downright fraudulent.”

State officials have handed out the EBT cards since 1997 and currently award them for three programs – Transitional Aid to Families with Dependent Children; Emergency Aid to the Elderly, Disabled and Children; and an electronic version of food stamps. The food stamps program limits users’ purchases, but the other two provide cash.

Patrick’s fraud task force monitors irregular spending and takes public tips on welfare abuse, Kritz said. Any welfare recipient caught abusing the system can be cut off and can be forced to even pay back the state.

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