State welfare money being squandered?

INDIANAPOLIS (WISH) - Every year, Indiana taxpayers help foot the bill for more than $61 million in welfare benefits, aimed at helping struggling Hoosier families get back on their feet. But a four-month I-Team 8 investigation uncovered thousands of cases where that money was withdrawn from some very questionable places.

The money comes from a federally funded welfare program called Temporary Assistance for Needy Families, or TANF. The program - federally funded, but administered by the states - is intended to help low income families get back on their feet. In Indiana, approximately 12,000 families are enrolled. Applicants to the program must have dependent children, and total family income cannot exceed the federal poverty line.

Each month, the cash is loaded onto electronic benefit transfer (EBT) cards - also known in Indiana as Hoosier Works cards. Families who qualify under the program can then use the cards either as debit cards at a point of sale or as direct withdrawal cards at any ATM.

As a condition of eligibility for TANF cash assistance, most adults must complete what the state calls “IMPACT” job training - an employment program that requires them to complete 20 days of job search activities.

“It's about supporting individuals to be able to obtain jobs, maintain jobs as well as support their families,” said Adrienne Shields, deputy director for Indiana’s Family and Social Services Division of Family Resources.

For many families, the program can be life-changing.

POSITIVE CHANGE

“It’s been a true blessing,” Kayla Kidd-Alexander told I-Team 8’s Troy Kehoe. “It meant a lot [to be enrolled in TANF], because I can take care of my son and live on my own at the same time.”

Kidd-Alexander, 20, gave birth to her first child, Kaiden, in January.

“I had him a day before my birthday,” she said, a wide smile on her face. “He’s teething now. But he’s a happy baby. He only cries when he’s hungry.”

Then, asked how she got money for his food, the smile quickly faded.

“Well, I lost my job right before he was born,” she said. “It wasn’t a good situation while I was pregnant.”

Bills suddenly began to pile up, and Kidd-Alexander was quickly overwhelmed.

So, she signed up for Indiana TANF benefits.

“I get $229 a month,” she said. “It helps me pay my rent and my light bill, and get stuff for the house and buy stuff for him. There’s nothing left [of the monthly benefit] by the time I buy him what he needs.”

That’s precisely what the program is intended to do. Most recipients use the TANF benefits to purchase basic family needs like food, shelter, utilities, clothing and diapers. Cash can also be used for things like household supplies, public transportation and hygienic care - items that are not covered under the EBT program, sometimes referred to as food stamps.

There are no requirements on what the money must be spent on, but Indiana law makes it illegal to withdraw TANF money at bars, clubs, liquor stores, casinos, horse racing tracks and gun shops. Strip clubs will soon be added to that list.

But I-Team 8 found the state has no way to find out exactly how TANF funding is spent.

TRACKING TANF

“In Indiana we do have the ability to track where a withdrawal actually takes place,” Shields said. “But Indiana does not monitor where cash is actually used.”

Asked if that meant cash could be withdrawn from any ATM and then spent anywhere, Shields nodded.

“That is correct,” she said.

To find out more about where the money was withdrawn, I-Team 8 requested records of all TANF transactions from 2011 from FSSA. More than two months later, we received the records of nearly 400,000 TANF transactions, completed both at point of sale locations and at ATMs. Each transaction includes the name of the merchant or bank and the address where the transaction took place.

• ONLINE EXTRA | Click here for a searchable online database of the TANF transactions provided to I-Team 8

It is a massive amount of data, but it turns out it’s not a complete picture of TANF spending in 2011. As of the airing of this report, the state has only supplied I-Team 8 with “rounded figure” transactions - either transactions that took place at an ATM or transactions at a point of sale that included cash back, thus making the total debit a round amount. That data reflects approximately one-third of the 1.2 million TANF transactions that took place last year.

I-Team 8 has submitted a supplemental public records request for the remaining data on TANF transactions from 2011. So far, the state has not set a timeline for fulfilling that request.

Still, even without full data, troubling transactions surfaced quickly.

LIQUOR STORES

Several Indianapolis chain liquor stores appeared on the list numerous times, including a Liquor Cabinet store on North Post Road that logged at least 101 separate transactions, dispensing more than $8,000 in TANF cash. A-1 Liquor, Doc’s Liquor and Victory Liquor locations also appeared on the

TANF withdrawal list at least 50 times each.

In all, I-Team 8 found at least $61,169 in TANF funding had been withdrawn at liquor stores during at least 728 separate transactions in 2011.

I-Team 8 went to several of the Indianapolis liquor stores on the list and found many had other withdrawal options nearby. At a Liquorland store on Indianapolis’ west side that appeared on the list at least four times, a full-service bank sat less than one block away.

“You know they didn't just cash the money there and run across the street to buy bread,” said state Sen. Patricia Miller (R), who sponsored Senate Enrolled Act 13 during the last session, which will add strip clubs to the list of banned TANF withdrawal locations this summer.

For those who do follow the law, the liquor store withdrawals alone were enough to spark outrage.

“That's not right. That's not fair,” said Cassandra Carter, who uses EBT funding to help feed her two sons, ages 2 and 3.

"It's terrible because my kids really need it,” Carter continued. “There's a lot of kids out there who really need it, and they're not getting it. To [abuse it], that’s a slap in the face. And, yes, that does make me angry.”

What I-Team 8 uncovered next only made that anger grow.

OTHER BANNED WITHDRAWALS

I-Team 8 compared withdrawals on the list FSSA provided against those banned under state law.

Our data showed withdrawals from the direct addresses of at least three Indiana casinos: Hollywood Casino in Lawrenceburg, Casino Aztar in Evansville and Indiana Live Casino (now Indiana Grand Casino) in Shelbyville. Those withdrawals totaled $361. I-Team 8 also found withdrawals from within one mile of casinos in Rising Sun and French Lick, though none appear to have been made from ATMs on casino property. Combined with withdrawals from locations near the casinos in Lawrenceburg and Evansville, they totaled more than $27,000.

However, since Indiana does not track what the cash is used for, there is no way to tell where that money was spent or what it was spent on.

I-Team 8 also found withdrawals from at least 16 different bars and clubs, including two withdrawals totaling $60 from Dave and Buster's in Castleton and a $40 withdrawal from Chicago's House of Blues.

But it may be the withdrawals we found that weren't illegal that are the most eye opening.

LEGAL, BUT QUESTIONABLE

I-Team 8’s research uncovered at least $42,476 in withdrawals from at least 10 chain locations whose addresses are listed as tobacco stores or smoke shops. That data does not include gas stations or convenience stores that often sell the same products.

According to the data provided by FSSA, at least $2,100 in TANF funding was also withdrawn from ATMs inside at least 14 different Indiana strip clubs. Filly’s Gentlemen’s Club in Lafayette appears on the list five separate times, accounting for total withdrawals of $860. Transactions were also made in at least four Indianapolis strip clubs. Managers at the clubs wouldn’t speak with I-Team 8 on camera, but two told us that getting welfare cash from ATMs in their establishments "doesn't seem right."

Soon, withdrawing TANF cash in a strip club will also be illegal, as SEA 13 takes effect on July 1.

“That's crazy,” Kidd-Alexander said, when shown the list of withdrawals. “Spending your money on lap dances and beer and stuff like that when you can't take care of your kids?”

THE STATE’S REACTION

Asked if she was surprised by I-Team 8’s findings, Shields said no.

“What you found, as far as a surprise, I would say that Indiana is pleased that less than 1 percent of our transactions are taking place in inappropriate locations. And all of the cases we've identified are being referred for further review and investigation. Looking at this holistically, Indiana is doing well compared to other states,” she said.

One percent of 1.2 million transactions is equivalent to 12,000 separate questionable withdrawals. If 1 percent of the total $61 million distributed through TANF last year took place in what Shields referred to as “inappropriate locations,” the total would be around $610,000.

I-Team 8’s research uncovered at least $120,324 in questionable withdrawals, based on the approximately 400,000 transactions provided by FSSA. At least $68,185 of those withdrawals was listed in FSSA’s database as being made in locations that were illegal under Indiana law at the time.

Pressed on the amounts, Shields nodded.

“Yes, and that is something we will be looking at,” she said. “Here in Indiana, we do monitor transactions that take place inappropriately, and we refer those on. If we find a client has withdrawn cash from one of the prohibited locations, we will send that information to our Bureau of Investigative team.”

Asked why questionable transactions aren’t being stopped if the state is monitoring them, Shields replied: “Indiana DFR/FSSA has no control over those actual ATM machines.”

I-Team 8 also found the numbers only tell part of the

story.

WITHDRAWALS ACROSS THE COUNTRY

I-Team 8’s research uncovered that Hoosier Works cards were used in at least 39 different states in 2011. Because state and federal law does not restrict where TANF benefits can be spent, the withdrawals are not illegal. In many cases, they were made at grocery, convenience or clothing stores. But I-Team 8 found also dozens that weren’t.

The addresses included on the list provided by FSSA include:

• An incense and potpourri shop in Los Angeles ($200)
• A beauty supply shop in Stone Mountain, Ga. ($140)
• Royal Beauty Salon in Benton Harbor, Mich. ($53)
• Beauty One Salon in Chicago ($100 total)
• An address one block from the Walt Disney Resort on Hilton Head Island, S.C. ($100)
• An address inside Epcot Center at Walt Disney World in Orlando ($400)
• 11 additional withdrawals made in Orlando from within 10 miles of Disney World ($1,940 total)
• 7 withdrawals within four miles of Walt Disney Land in Anaheim, Calif. ($660 total)
• Cedar Point Amusement Park in Sandusky, Ohio ($20)
• Swinging Bridge RV Park in Byrum, Miss. ($120)
• AMF Bowling Lanes #601 in Milwaukee, Wis. ($20)
• A Crowne Plaza Hotel in Bloomington, Minn. ($100)
• 2 withdrawals from Poor Jack’s Amusements and Carnival in Cambridge City, Ind. ($60 total)
• 3 withdrawals from Ripley’s Believe It Or Not Museum in Gatlinburg, Tenn. ($180 total)
• Hollywood Fun Park and Carnival in Crestwood, Ill. ($40)
• 2 withdrawals from a Best Buy electronics store in Merrillville, Ind. ($60 total)
• The Gary, Ind., Steelheads Minor League Baseball Park ($120)
• The Gary, Ind., Railheads Ballpark ($20)
• 5 withdrawals from DeltaSonic car washes in the south Chicago suburbs ($400 total)
• Anna Maria Island Beach in Holmes Beach, Fla. ($200)

Money was even withdrawn from Hoosier Works cards under the neon lights in Las Vegas. I-Team 8 found one withdrawal on famed Freemont Street for $200. Another on Flamingo Drive right outside the Venetian Hotel and Casino went for $280. In total, I-Team 8 found 11 withdrawals for a total of $911 from within nine miles of the Las Vegas strip, though many were much closer, including a $120 withdrawal from an address that returns to the Las Vegas Premium Outlets.

An additional casino withdrawal is listed at Newcastle Casino, Blackjack and Bingo in Newcastle, Okla. ($40). A withdrawal from a gas station across the street from the entrance to Four Winds Hotel and Casino in New Buffalo, Mich., is also listed ($80).

I-Team 8 even found two withdrawals for a total of $342 from a grocery store and Kmart store in Puerto Rico and a $300 withdrawal from a shopping center in Kaneohe, Hawaii - more than 5,000 miles away from Indiana.

QUESTIONS OVER DISTANCE

I-Team 8 asked FSSA why such withdrawals of Hoosier TANF funds were allowed so far away from Indiana.

“That’s assuming that they’re visiting those locations,” FSSA Communications Director Neal Moore said. “They may very well live there.”

Still, Shields said the Hoosier Works cards are meant for Hoosiers.

“You have to be a resident of the state of Indiana to receive TANF benefits,” she said.

Asked by I-Team 8 why Indiana welfare funding would be needed in another state, Shields said the money may be linked to something else.

“Many TANF recipients are caring for their grandchildren,” she said. “So they may be receiving TANF dollars because they're caring for a relative. Over 97 percent of transactions actually took place in Indiana, and another 2 percent took place in bordering states. So, that's less than 1 percent took place in a non-bordering state of Indiana.”

Still, 3 percent reflects approximately 36,000 TANF withdrawals made outside of Indiana’s borders. Pressed on the transactions I-Team 8 found, Shields said FSSA is aware they occurred.

“Yes, [we are],” she said. “And, all of them have been investigated and are in the process of being investigated and referred over.”

Shields said she also believes out of state transactions may also actually save Hoosier taxpayers money in the long run.

"You have a relative caregiver providing care for a child that would otherwise be in foster care. And so, the goal with TANF dollars supporting that family member is to keep the family united, instead of putting them in foster care. It would cost taxpayers even more to have that child in foster care than living with a relative care-giver," she said.

"We have no responsibility for how people spend that money, [as long as it’s withdrawn legally],” Moore added. “That is not part of our charge."

A CALL FOR ACTION

I-Team 8’s findings have already sparked new calls for action at the Statehouse, including a letter written to leaders in both the House and Senate requesting additional analysis of the data we uncovered, along with additional research on options for blocking TANF transactions in locations prohibited by state law.

Some question why blocking programs implemented in other states have not been put in place in Indiana.

I-Team