Welfare benefits paid out at strip clubs



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Posted on January 26, 2011 at 11:48 PM

Updated Wednesday, Jan 26 at 11:57 PM

OLYMPIA --State lawmakers are proposing new restrictions on where welfare recipients can spend their taxpayer funded cash. This follows a KING 5 investigation that uncovered millions of tax dollars withdrawn at local casinos. Now, lawmakers are setting their sights on other “adults only” businesses.

A bill sponsored by Senator Mike Carrell, R-Lakewood, would ban the use of cash cards, used to distribute welfare benefits, at strip clubs, tattoo parlors, gun shops and taverns.

“As you know from your investigations last summer, these cards are being misused," said Carrell

Cash welfare benefits, distributed monthly on debit cards known as EBT cards, are supposed to be used only for the care of needy children and the disabled.

The KING 5 Investigators used ATM transaction records to track an estimated $2 million in welfare cash withdrawals at casinos in Washington over the course of one year.

KING 5 quickly found withdrawals at ATMs in other adult businesses, as well.

EBT transaction records show $220 in ATM withdrawals at Fantasy Unlimited, a Seattle sex shop, in July and August of last year. In that same time period, 260 welfare dollars were withdrawn from the Déjà vu strip club in downtown Seattle.

At the Pierce County night club, The Kamel Toe, pole dancers are the featured act. Records show that the ATM in the club cranked out 740 welfare dollars last July and August.

“I'm very disappointed, very disappointed,” said club owner Tracey Conklin. “The ATM is by the front door. We don't police everybody's card. But, because you know you're in an adult establishment, I don't think you should use that money in a bar"

After the casino stories last year, Department of Social and Health Services Secretary Susan Dreyfus called on all casinos and cardrooms to block the use of EBT cards at their ATMs. DSHS says almost all major casinos in the State complied.

Gambling with welfare cash is already illegal. It’s the one and only prohibition under state law.
KING 5’s investigation revealed that even if DSHS was monitoring cash transactions, which it's not, it doesn't have the authority to stop expenditures at adult establishments.

Sen. Carrell’s bill would make it a crime to spend welfare money at adult establishments and force DSHS to cut off EBT card access at ATMs and cash registers in such establishments.

In a statement, Secretary Dreyfus agrees that it’s time to tighten the restrictions on the use of welfare cash and she calls Carrell’s bill “a place to start.” She also says she doesn’t want any new restrictions to make it harder for honest welfare recipients to access their cash.