PHOENIX - A four-month ABC15 investigation has uncovered a connection between your tax dollars and tattoo parlors, liquor stores, strip clubs – even casinos.
Now, state regulators are making changes as a result of the investigatioh.
At the center of our story are people like Dalia and her three children who just moved from Tucson to Phoenix.
Dalia told us she’s starting dental assistant school soon. In the meantime, she’s volunteering, and to get by each month, she relies on a federal cash assistance program to meet her family’s basic needs.
“Without it, I would struggle a lot,” Dalia said.
Dalia and her three children are just one of 19,000 families in Arizona that rely on a federal government program called Temporary Assistance for Needy Families – or TANF.
She gets the money from an Electronic Benefit Transfer card – or EBT. It works like a debit card at ATMs.
According to state regulations, money from the TANF program is supposed to be spent on basic living expenses like: food, shelter, utilities, household supplies, public transportation, basic clothing, diapers, and personal care and hygiene items.
“We are very clear at the time of eligibility what the intended purposes of these dollars are,” said Clarence Carter, the new director of the Arizona Department of Economic Security – or DES. Carter’s department administers the TANF program for Arizona.
TRANSACTIONS AT BARS, LIQUOR STORES, LAS VEGAS AND HAWAII
The ABC15 Investigators examined thousands of ATM transactions from October, November and December of 2010, and we found TANF money taken out at a number of questionable locations.
We found welfare cash taken out at liquor stores at least 100 times during those three months.
According to the public records provided to the ABC15 Investigators from DES, more than $1,200 was taken out in November at the Quality Liquor Drive-In in Yuma.
In December of 2010, the ATMs inside Margarita Rocks, The Tavern and Hooters on Mill Avenue in Tempe were used to take out welfare money.
DES Director Clarence Carter told us TANF money can also be withdrawn at out-of-state ATMs, and we found money withdrawn in Las Vegas at the Grand Canal Shoppes at the Venetian, and even as far away as an ATM in paradise – on the shore of Maui.
“Would you have questions about money being spent in Maui that was tax payer money?” we asked Carter.
“I would say that the issue of basic sustenance doesn't end at the borders of the state,” Carter said.
ADULT ENTERTAINMENT STORES AND STRIP CLUBS
According to DES records, $310 in TANF funds were taken out from an ATM inside the Castle Megastore on 26th Avenue and Deer Valley Road in Phoenix.
There is nothing wrong with businesses allowing TANF money to be withdrawn – even in a sex shop.
We also found TANF money withdrawn at strip clubs, like Eve’s Tease in Phoenix and The Candy Store in Tucson.
DES told us there are very few rules dictating where TANF recipients are allowed to withdraw cash, and there is no way to track where that money is actually spent.
“Once a dollar is in hand, there is no system to track the dollar,” Carter said.
DES claimed only 1 percent of the money from the TANF programs was withdrawn from questionable ATMs during October, November and December of 2010.
“The vast majority of these dollars are used for their intended purpose,” said Carter.
But even Carter agrees, there is no way to really know.
SOME OF THE LOCATIONS WHERE TANF FUNDS HAVE BEEN WITHDRAWN IN ARIZONA
View TANF ATM MAP in a full screen map
CRACKDOWN ON CASH FROM CASINOS
DES has one system in place prohibiting withdrawals from casino ATMs.
“There's a regulation that a public assistance electronic benefit transfer card cannot be transacted at a casino or a gaming hall,” Carter said.
But that’s not what the ABC15 Investigators found.
In October, November and December of 2010, more than $5,700 was withdrawn from ATMs at casinos, like the Lone Butte Casino and Wild Horse Pass Casino in Chandler.
“The ATMs had not been programmed appropriately to block that transaction,” Carter said.
It's something the department says has changed as a result of what we uncovered in our investigation.
“Was your attention drawn to it after we asked for these documents,” we asked Carter.
“Yes, as part of the research that you asked of us, we understood this and acted on as soon as we understood,” he said.
“I think that in this day and age it certainly makes sense to restrict using those TANF cards in strip clubs or places like that,” said Senator Rick Murphy (R-Glendale).
As a result of our investigation, Senator Murphy said he wants to look at the data – and the possibility of stronger restrictions.
“The idea is that TANF is for the poorest of the poor, for people who need help the most,” Murphy said.