Libous: Millions in taxpayer assistance wasted on beer, casinos, and strip clubs

By Matt Porter

June 21, 2013 Updated Jun 21, 2013 at 6:01 PM EST

Binghamton, NY (WBNG Binghamton) Millions of dollars in New York's public assistance programs are squandered every month at liquor stores, casinos and strip clubs, according Sen.Thomas Libous.

And there's little oversight to stop it.

The Senate voted and passed a bill championed by Libous (R-52nd) to make spending cash assistance on alcohol, gambling or strip clubs illegal.

Libous said New York is an unregulated market when it comes to how cash is divided out to welfare recipients.

"During the hours of midnight and 6 a.m.," Libous said, "Some $4 million comes out of ATM machines a month with this (EBT) card."

Libous said that money is more likely to go to illegal activities than basic necessities.

An investigative report from CBS 6 in Albany showed withdrawals were made from ATMs in liquor stores, casinos and strip clubs.

Libous said those facts show New York isn't doing enough to prevent welfare abuse.

"What we want to do is go after people who defraud the system, the people who are taking money away from those good people who need the system to help them," he said.

Along with creating penalties for the recipients who misuse their cash assistance, the bill proposes to block EBT cards from being used at ATMs in liquor stores, casinos and strip clubs.

"Millions of taxpayer dollars are being wasted," Libous said, "People are defrauding the system, that's what my legislation does is it takes the first major steps in stopping that."

Some in Binghamton who have received public assistance said they wouldn't be opposed to tighter restrictions.

"Ever since the system came out, I think the system's good," said Ronald Gabriel, of Binghamton. "But if it's being abused I think they need to look into that."

Others agree.

"It's common sense to know that if you're going to give these people cash, not to use it for tobacco or alcohol," said Travis Heppard, of Binghamton, "Items that the government shouldn't be paying for."

Sandra Sanzo, the Broome County Department of Social Services deputy director for assistance programs said people receiving cash assistance have most of it go directly to their rent or utilities.

"They're very limited in cash and they have to make good choices to use that for their personal care items," Sanzo said

Actual cash that can be withdrawn via EBT cards is generally between $25 to $200 per month, depending on family size.

The money is meant to be used for items like paper towels, toothpaste, or soap, items not eligible under more tightly regulated food stamps or SNAP, which stands for Supplemental Nutrition Assistance Program.

Sanzo did admit nothing restricts cash withdrawals.

"It's their personal choice," she said.

If Libous' bill becomes law, there would be less of a choice.

The bill still needs to pass the Assembly, which will not happen this session.

The federal government under the Middle Class Tax Relief and Job Creation Act requires states to take some action against EBT fraud,including securing it against purchases for alcohol, gambling and strip clubs.

If New York does not pass a bill doing so by Feb. 22, 2014, the state could lose $120 million, or 5 percent, of its annual public assistance grant.