LePage releases EBT data showing transactions at strip clubs, bars, smoke shops

Posted Jan. 07, 2014, at 2:48 p.m.
Last modified Jan. 08, 2014, at 9:04 a.m.
Paul LePage
Kevin Bennett
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AUGUSTA, Maine — Gov. Paul LePage released information on Tuesday that he says demonstrates that welfare benefits in Maine are being abused. But the data LePage cited to make his case for abuse represent a tiny fraction of all transactions involving electronic benefits cards issued to the state’s welfare recipients.

The data were compiled by the Department of Health and Human Services, based on transaction records of electronic benefit transfer, or EBT, card holders. EBT cards are loaded with cash benefits paid out by the Temporary Assistance for Needy Families program.

Recipients can use the EBT card like a debit card at participating shops and retailers, or use the EBT cards to get cash from ATMs. EBT cards are also loaded with benefits from the SNAP program, formerly known as food stamps.

The data released by the governor show more than 3,000 transactions from Jan. 1, 2011, through Nov. 15, 2013, at smoke shops, and more than 650 transactions at bars, sports pubs and strip clubs. Those transactions include purchases at the check-out counter and withdrawals from on-premises ATMs. The state does not track what is purchased in EBT transactions.

“This information is eye-opening and indicates a larger problem than initially thought,” LePage wrote in the release. “These benefits are supposed to help families, children and our most vulnerable Mainers. Instead, we have discovered welfare benefits are paying for alcohol, cigarettes and other things that hardworking taxpayers should not be footing the bill for.”

There are nearly 224,000 active EBT cards in Maine, according to DHHS spokesman John Martins. That figure includes cards issued to people receiving benefits as well as people who are no longer enrolled in TANF or SNAP but still carry a balance on their cards.

According to Martins, there were about 50,000 EBT transactions per month, or nearly 1.8 million in the nearly 36-month surveyed time period. So the 3,701 transactions in question amount to only about two-tenths of 1 percent of total purchases and ATM withdrawals.

LePage’s spokeswoman, Adrienne Bennett, said the problem needs to be addressed, no matter how small.

“Any amount of abuse in the system that takes away from the truly needy needs to be dealt with,” she said. “We’re not uncovering anything new. There are always going to be bad actors out there. We’re simply saying, ‘We’ve got an eye on you.’”

“The governor firmly believes there should be an adequate and quality safety net for our most vulnerable citizens, but the system needs improvements,” she said.

LePage will sponsor a bill to tackle issues with EBT cards — such as the lack of a paper trail about what is bought with the benefits — in this year’s legislative session, according to Bennett.

A law passed by the Legislature in 2012 prevented EBT cards from being used at retail establishments where more than 50 percent of sales came from liquor, gambling facilities and purveyors of adult entertainment. Transactions at smoke shops are not illegal, but LePage and others have argued that taxpayer money should not be used on cigarettes.

House Speaker Mark Eves, D-North Berwick, said that if the data released by the governor are verified, it should be addressed immediately — even if the figures are small.

“No one wants to see funds meant for struggling families abused,” he said Tuesday. “State law already forbids EBT cards from being used at liquor stores. If this list is verified, it’s time to take action. The question for the governor is, will he prosecute or politicize it? Democrats will continue to support good-faith efforts at cracking down on fraud and abuse.”

LePage and Maine House Republicans have made welfare reform a top priority in this year’s legislative session, a prelude to what will surely be a campaign theme this fall.

Last week, LePage announced a bill aimed at beefing up work requirements for TANF recipients. Maine’s requirement is more relaxed than the federal government’s, putting the state out of compliance. The governor is also submitting two welfare reform bills on behalf of House Minority Leader Ken Fredette, R-Newport, that were denied by top legislative Democrats.

In an interview last month, the governor said he would double down on investigations into welfare fraud, including potential abuse of EBT benefits.

Democrats in the State House said they would support measures to ensure EBT cards are not misused, but said they would oppose other welfare reform bills. They have cited a report by University of Maine sociologist Sandra Butler, which showed that thousands of poor Mainers have lost state assistance since LePage instituted a five-year cap on TANF benefits.

Follow Mario Moretto on Twitter at @riocarmine.

CORRECTION:

Based on a release from Gov. Paul LePage’s office, an earlier version of this report said that the EBT transactions at smoke shops, bars and strip clubs occurred between Jan. 1, 2012, and Nov. 15, 2013. A DHHS spokesman confirmed that they took place between Jan. 1, 2011, and Nov. 15, 2013, which alters the calculation of what percentage of all EBT card transactions they represent.

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