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WICHITA, Kansas — Thousands of tax dollars are set aside for needy families are likely being wasted on alcohol, cigarettes, gambling, and even strip clubs, according to an investigative report by KansasWatchdog.org.
The internet site combed through tens of thousands of welfare transactions from August to October of 2012. They found ATM withdrawals of welfare benefits at automated teller machines inside several liquor stores and smoke shops. There were even withdrawals at Coors Field in Denver, a Junction City strip club, and the Vegas Video adult bookstore on Kellogg in Wichita.
“It’s hard to not raise an eyebrow when you see them,” said Travis Perry with Kansas Watchdog.
The money comes from TANF, an acronym for temporary assistance for needy families. It’s a federal program that provides cash to struggling homes. A family of four can qualify for as much as $497 a month in payments.
Families that qualify for TANF funds get the money directly deposited onto their Vision cards in Kansas and can withdraw the cash at any ATM.
While it’s nearly impossible to tell for certain that money withdrawn at ATM at questionable locations, it’s likely.
“These aren’t places people go to make responsible transactions,” said Perry.
Ken Thompson, the director of fraud investigations for the Kansas Department for Children and Families, doesn’t dispute money withdrawn at an ATM at a smoke shop or casino is likely being misspent.
“That would be the logical inference, and I’m not going to sit here and say otherwise,” said Thompson.
The Department for Children and Families oversees the disbursement of TANF funds in Kansas and are charged with making sure it’s spent legally.
“It’s distressing. It truly is,” said Thompson about the questionable withdrawals. As much as $43,000 in welfare benefits was withdrawn at questionable ATMs over the three month period.
The problem for state officials is there is no easy solution to the problem.
“There is no easy way to solve it,” said Thompson. “There really isn’t.”
“This is spending that is against the law, it’s against state policy but the state is powerless to do anything about it right now,” added Perry.
Two years ago, Congress left it up to the states to prevent welfare fraud with TANF funds but have given the states no way to control the cash.
The only way to keep Vision cards from being used at questionable locations is to work with the banks to come up with technology that would allow welfare payments to be withdrawn only at an ATM in an approved locale.
But states have little power and little leverage to force the banks into costly and time-consuming regulation.
“You can attempt to regulate interstate commerce but it’s an uphill fight,” said Thompson.
The good news is the number of cases where money is withdrawn at questionable locations is low. Only around 3 percent of the transactions reviewed by Kansas Watchdog were considered inappropriate.
The state also makes it clear to welfare recipients that spending welfare money on alcohol, drugs, or tobacco is illegal.
But right now, state officials are nearly powerless to stop cash withdrawals from beings spent on partying instead of on feeding hungry families.