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Tennessee Watchdog investigation prompts welfare reform bill

By   /   March 1, 2013  /   News  /   1 Comment

Part 1 of 15 in the series Welfare Abuse
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A memorial to Elvis Presley is displayed outside Graceland, Presley’s Memphis, Tenn., home, on Wednesday, in 2012, to commemorate the 35th anniversary of Presley’s death. Lawmakers are proposing changes to state law following a Tennessee Watchdog investigation that revealed welfare, or EBT, cards had been used at Graceland. (AP Photo/Mark Humphrey)

By Chris Butler | Tennessee Watchdog

NASHVILLE — If anybody on welfare wants to continue using taxpayer-subsidized, cash benefits on lap dances or liquor store runs, then now is the time to call your Tennessee state legislator and fight for your rights.

Otherwise, those benefits may run out very soon.

State legislators are considering a bill that would prohibit the use of the EBT cards that dispense welfare benefits, including ATM cash withdrawals, at certain adult-oriented establishments, including casinos.

Tennessee Watchdog’s investigation last year into how EBT cash benefits are abused throughout the state prompted the legislation.

Jim Tracy

Tenn. state Rep. Jim Tracy, R-Shelbyville

As authored by State Sen. Jim Tracy, R-Shelbyville, stiff fines would follow for any business found in violation of the proposed law. Those fines would range from $1,000 for the first offense all the way up to $5,000 following for repeat offenders.

The legislation now goes to the state House of Representatives for its approval.

Last summer, Tennessee Watchdog reviewed purchases and ATM transactions involving EBT cards in Knoxville and Chattanooga. The investigation revealed cardholders had spent taxpayer dollars at strip clubs, tobacco shops, restaurants, hotels, and high-end clothing stores, as well as bars and beauty shops.

Another Watchdog investigation, focused on Memphis, revealed the use of EBT cards at Broadway shows, premier dance clubs, even Graceland.

Most telling, however, was the discovery that many EBT cardholders used their cards inside liquor stores, with some transactions as high as $790.

At the time, liquor storeowners, including Harry Cardosi, told Tennessee Watchdog that cardholders generally use their stores as a place to withdraw cash benefits from ATMs. Most cardholders never purchased alcohol, although there were notable exceptions.

Cardosi said this week that he considers Tracy’s bill pointless.

“If cardholders go to a grocery store or a service station and get their money and decide they want to get liquor elsewhere, then they’re going to do it,” Cardosi said. “How can you tell them where they have to spend their money? Once they get their money they could just as soon take it down to Mississippi and go gambling.”

Tennessee Department of Health and Human Services (DHS) officials who administer the program cannot trace what recipients do with that ATM cash. Until now, recipients have been free to use the money however they please, unencumbered by any government-mandated conditions or restraints.

EBT Card

EBT Card

An EBT card can offer two types of benefits.

Under the Supplemental Nutrition Assistance Program, cardholders may purchase food products. Certain EBT cardholders who participate in the federal Temporary Assistance for Needy Families program (TANF) may withdraw cash benefits from ATMs and use that money as they see fit.

Tennessee spends $127 million annually on TANF. About 16 percent comes from state tax dollars, with federal taxpayers covering the remainder.

Contact Christopher Butler at [email protected].

Part of 15 in the series Welfare Abuse


Chris formerly served as staff reporter for Watchdog.org.

  • heidihoneighbor

    The gov entitled and the elite are the only ones that can afford entertainment. The rest of us are being squeezed to death by fed and state.

    These feel good laws arent good enough.

    Nobody needs a taxpayer funded credit card. If you have to pay an electric bill, sign up through the electric company.

    Need gas, sign up through your gas company.

    Taxpayers are not your sugar daddy.