Proposed law aims to reduce EBT abuse

Posted at: 02/04/2013 6:51 PM
Updated at: 02/05/2013 11:46 AM
By: Jessica Layton

For Sarah Fish, the Hungry Fish isn't just an ordinary cafe. For this 33-year-old Troy woman it's a dream come true -- a dream this business owner and chef didn't even know she had.

"I don't think I ever really had much of a picture for my future," Fish said.

Her restaurant kitchen is freedom from the life she was living a few years ago -- struggling from government check to government check. She says food stamps in some ways saved her life.

But when it comes to the cash benefits she received?

"I did spend a lot of money on drugs and alcohol," she admitted.

It's an honest answer. Not one she's proud of. Fish says it wasn't until after she graduated from HVCC that she learned to demand something better from herself and worked her way off the state help, eventually opening a business.

But she admits it isn't hard to scam the state system.

"If people were actually held accountable for how they spent the money, had limits for where it could be spent and what it could be spent on, it would limit the abuse," Fish said. 

NewsChannel 13 investigated the issue in November 2011 and discovered tens of thousands of state benefit dollars were withdrawn from ATMs in bars, at the OTB and in liquor stores by people using their electronic benefit transfer cards. The cards are issued by the state Office of Temporary Disability Assistance, but the agency was doing nothing to oversee or restrict where the cash is taken out or spent.

We recently went back and obtained more EBT cash withdrawal records from June 2011 to August 2012. More than $6,000 was withdrawn at Troy Discount Beverage. Nearly $700 was accessed at Iffy's Place, a bar in Albany. Enough for a lap-dance or two taken out from an ATM at DiCarlo's in Albany courtesy of the taxpayer.

"That to me is just a slap in the face to the taxpayer that's footing the bill," said Republican Assemblyman Steve McLaughlin of Melrose.

That's why McLaughlin is co-sponsoring the Public Assistance Integrity Act. The law would make it impossible for folks to use their EBT cards at ATMs inside liquor stores, casinos and adult entertainment spots. The justification for the new legislation cites our story as a reason New York needs the new law.

"Am I naïve enough to believe they're not just going to go to the Bank of America on the corner to get the money and then go to a strip club? I know that's what they're going to do. But let's not make it so easy," McLaughlin added.

But there still wouldn't be anyone tracking how the cash is spent.

So then why not make those who get cash benefits show exactly what they're buying with it, by turning in receipts? Or why not get rid of cash assistance altogether?

McLaughlin says he's not sure New York State has the manpower or the political will to do it. He just hopes this bill will be a hurdle standing in the way of those who so blatantly take advantage of the system. He also hopes it satisfies a mandate from the federal government that says states need to develop policies to prohibit EBT transactions at liquor stores, casinos and for adult-oriented entertainment.

"Or else we're going to lose $120 million in federal funding if we don't fix this problem," McLaughlin said.

That's money that's supposed to go to the people who use the assistance for the right reasons.

"It's there to get them over a rough spot," McLaughlin said.

Fish says once she got her act together, that's exactly what it did for her.  

"If you're not doing something to get out of that situation, why would it ever change?" Fish said.

New York has a year to implement a policy to try to cut down on the waste before reporting its new policy to the federal government. McLaughlin expects the bill to reach the floor of the state legislature by the spring.