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Thousands in welfare cash tapped at California strip clubs

California welfare recipients have been able to get taxpayer cash -- meant to feed and clothe needy families -- from ATM machines at strip clubs across the state, including some well-known gentlemen’s cabarets in Los Angeles.

More than $12,000 from the Temporary Assistance for Needy Families program was dispensed from the start of 2007 to the end of 2009 at clubs including Sam’s Hofbrau, Seventh Veil and Star Strip, according to officials at the Department of Social Services.

Gov. Arnold Schwarzenegger has ordered the department to remove the clubs from the official list of businesses where welfare recipients can withdraw benefits using state-issued ATM cards.

The move came a day after The Times asked the administration how much welfare cash had been withdrawn at 17 adult clubs in recent years and less than a week after The Times reported that more than half the casinos and state-licensed poker rooms in California appeared on an official website showing welfare recipients where they can access cash benefits.

Following that report, Schwarzenegger ordered the casinos struck from the state’s ATM network and directed the Department of Social Services to produce a plan to reduce “waste, fraud and abuse” in the welfare program.

“We'll take a wide-ranging look and apply some common sense to the list of outlets where cash assistance should not be withdrawn,” Department of Social Services spokeswoman Lizelda Lopez wrote in an e-mail to The Times on Tuesday evening, announcing that her department had “taken steps to deactivate ATMs in adult entertainment clubs.”

Strip-club managers seemed shocked that welfare benefits were accessible through their ATMs.  In most cases, the machines were provided by a third party, the managers said, and they had no way of knowing their ATMs are part of the state system.

The state contracts with the Quest ATM network.

“If there’s a way that the ATM can reject their card if they’re on welfare, I’m really and truly all for that,” said Merle Matias, manager at Sam’s Hofbrau in downtown Los Angeles, where $2,159 had been withdrawn, according to Department of Social Services officials.  “I don’t think it will affect us at all.”

Star Strip manager Joey Mancini said state officials must be wrong about the $1,265 they said had been withdrawn from his club’s ATM.  The Quest symbol isn’t on the machine, he said, adding that he thought any system that allowed access to welfare benefits at a strip club should be reformed: “This is not what that money is for.”

A manager at Seventh Veil declined to comment.

-- Jack Dolan in Sacramento

Comments () | Archives (168)

Welfare should be incontrovertible vouchers for everything. Anyone misusing a voucher is banned from the system for life. Anyone illegally accepting the voucher goes to jail.

12K from 2007 to 2009. Clearly this is not a good thing, but I'm not sure it's worthy of headlines, nor calls to abolish all welfare programs. By the way, so many of the contributors here seem to be certain these people are illegal. And you know that how?

Mike Burke,

Use your head. If you WORK at a strip club, you're not needing immediate access to cash. Certainly not at the high transaction fee I'm sure a strip club ATM charges.

CA Budget & Finance committee: Here's where you can trim the budget!

These debit cards should only be valid at chosen sites/stores. There has to be a way to "deny" payment when these are used at unauthorized areas/stores.

There has to be an overhaul of the welfare system.
- caps on how much a family gets, regardless of how many children
- citizens only
- welfare/work programs....recipients must do some kind of work to offset their payments. A "community service" type program.
- cap on how many years one can receive welfare benefits...stop the "career" recipients.

It's a shame that these abuses are allowed to continue as there are many who receive these benefits who desperately need this assistance, not abusing the payment and are not life long recipients, but yet they are painted with the same brush.

@chuck b. please stop blaming illegal immigrants dude, we are all part of the middle class, unfornately the powers that be want the middle class to take care of the poor and also have the highest tax rate. remember its a two party dictatorship.

There is nothing wrong with some welfare recipient having a little fun with ladies, using your tax dollars for some lap dancing.

@panchang810 | June 30, 2010 at 03:40 PM

You should really research things yourself before you call people ignorant about welfare. The STATE of California ABSOLUTELY does issue funds to illegals.

I'm not saying (nor did I read anyone suggest that EVERY program was available to them) however, they can get on Medicaid if they are pregnant. They have a program for illegals who are disabled. A cursory search of the CA gov website would have shown you all this info.
So yes, illegals do get access to some funds and even 1 dime is too much. Sorry.

Oh and the greatest decade in American history in terms of growth and prosperity was the 1920's and tax rates were virtually non-existent. Furthermore, unemployment and poverty were also virtually non-existent, so again...you should do a little reading yourself.

Chuck B , all I got to say to you is thank GOD you still have a job. Quit sniveling about the hours and hours that you work and about seeing your kid for one hour. You dolt get a day job then you can be at home in the evenings. If that is not possible keep being the big man by blaming somebody else for your predicament.

@Freud | June 30, 2010 at 04:04 PM

I think you are missing his point. If someone is using 'emergency' cash to go to the nudie bar or lay some bets down on the ponies I would contend and I'm sure Mr. Clark would as well, that they didn't need the money THAT badly.

I have been in some DIRE financial straits in my life and I never once thought 'hmmm...clothing and food or go see some jugs at the Body Shop...hmmmm' Never. I cut my personal expenses to the bare minimum and pulled myself out.

To quote a great man (who also happened to be one of the most charitable to the poor): You do no man a favor by making him comfortable in his poverty -Ben Franklin

What I want to know is why do welfare recipients even get access to cash? That is a huge recipe for waste and fraud. They should get vouchers that are only good for basic living necessities such as food, rent and utilities such as gas water and electric. Giving people who don't work, free cash, is simply stupid.

ALL of California's Democratic and Republican PRIVILEGED ELITE in Sacramento, and the District of Corruption, are so corrupt and incompetent, one would believe they could NEVER get RE-elected....but you idiot voters, just love to send them back, to steal even more. You are getting ALL that you so richly deserve!!!!

Dana Panzer if you have not fed your kid for four days you deserve to be thrown in the clink. You are a terrible parent.How dare you starve your kid, social services will be notified and your IP address will be traced,I guarantee you that much.

Great tax dollars going to feed their gambling and sexual habits. And you wonder why people are sick of this government.

There should be no cash payments. If these people need food, clothes, or shelter, the items should be provided, not money. Rather than obsessing over a few million spent at casinos or strip clubs, wonder what percentage of these cash payments are used to buy drugs, alcohol, or cigarettes?

There really shouldn't be any question about how little of the welfare money is getting to the kids when the LA Times keeps running these stories about school kids starving if LAUSD doesn't feed them. Obviously, welfare / food stamp money is not being used appropriately if you have kids who aren't fed outside of school. Maybe social workers should be in the schools checking up on these kids who's families are getting assistance. If they're not being fed, not being well taken care of with this welfare money, the family should get audited and the government should find out where the money is going.

Why is this even remotely surprising? Anyone who has stood behind countless folks trying to buy beer and cigs with govt. money should realize the farce that welfare has become in this nation.

I get that this appears pretty bad. In fact, it probably is. Do men get welfare checks? But the reality is that the only number that appears in the article is $12,000 in two years - or $6,000 a year. The state pays private consultants that much in one day to hear about the possible possibilities of maybe putting in a late 20th century high speed rail system - or where to put stop lights - or what new gazillion dollar computer program the state needs - or etc., etc. - You get the picture.

It seems like the solution is to go the route of not having any state issue welfare be convertible in any way for cash. It should be a special kind of coupon/currency note that is (mandatorily) accepted everywhere, but is only redeemable for certain kinds of purchases, namely food and clothing. Maybe it could be set up so that it could also be redeemed for things like paying utilities or public transit too. But there should be no way that government hand outs could in any roundabout way, to be used to buy anything else.

I'm a liberal, I believe in a robust social safety net. Freeriders will always be an issue in any assistance program, and its better to pay for a few freeriders than have those in serious need get left out in the cold, but it seems like there are simple ways to cut the freeriding down to a manageable level. If you go into the ghetto and hand out cash, most of that money will end up being spent in ways that keep the poor poor. If the welfare came in the form of notes that could only be spent on survival essentials, problem solved. (this specific problem anyway)

I do have to agree with Patriot, 12k over 3 years is NOTHING. There was a story earlier this week about how they could be used at casino's and over a million had been spent that way in 1 year (if I recall.)

This is much ado about nothing. The trillions wasted on an illegal and amoral war and the trillions given to wall street for defrauding the public is a much larger outrage if you ask me. What about the billions that are being wasted on the farce, I mean war on drugs? I guess it's easier to just blame the poor for our nation's ills.

Look, I don't want to pay for these deadbeats any more than the rest of you. But some of you have a staggeringly simplistic view of reality here. The different economic sectors are not floating around in their own vaccuums. Everything is interrelated. Economic isolationism is does not a developed civil society make. If you are rich its not enough to say, I've got mine, screw them, I'm going off to live in my gated community. You won't stay rich in the long run. Your own economic well being is indirectly tied to the ghetto. How far up you can climb is dependent on where the line is drawn marking the bottom. Economics is a big complex symbiotic relationship. I can't go into an economic diatribe here but I'll summarize with a gross simplification: The poor sector needs the wealth sector for jobs, innovation, and general economic growth. The wealth need the poor to staff the jobs and buy the products; (and to not get so fed up they resort to crime or have a revolution)

If you don't keep the poor participating in the economy at some minimal level, nobody can stay rich. If the poor in America lived like the average Somali, literally, the bottom would fall out of our economy and everyone loses. If the parasite kills its host, both die. I've failed to mention the middle class buffer, but with the trends of the last 30 years the middle class have only a slight edge over the poor, whereas the rich have lapped the middle class a few times.

Schwarzenegger's "solution" is useless. Removing strip-club and casino ATMs from the approved list does nothing to prevent someone from withdrawing cash elsewhere and then bring it to a strip club or casino. It makes more sense to pay welfare recipients with vouchers that can only be used for groceries, clothing, rent and gasoline.

Great moment to direct hate against the poor by reviving the 'welfare queens' and freeloaders myth. Certainly we should be more concerned about desperate poor people gambling away their few dollars, not escalating wars and and super-banks making off with hundreds of billions.

It seems to me that the easiest way to fix this is to make the system CREDIT CARD ONLY. Give the card the mastercard logo and don't give it a PIN. No more cash - problem solved. The transaction costs will certaintly be less than the fraud that appears to have happened. When you give people access to straight cash abuse will occur and oversight goes to zero. Why in goodness sake can they get cash anyways? Every transaction needs to be monitored and tracked which certainly can take place. My credit card breaks down my transaction quarterly why can't they do this for this program?

I doubt it very much that these people will be stripped from the welfare system. You are talking about California here. They can be very forgiving.

To Panchang810 - Illegal immigrants are welfare recipients thanks to the "many" kids they have born in the USA. Why do you think they have so many? Because they love kids so much? Don't think so. In this economy now, you cannot have so many kids even with both parents working, so how is it that a single mother can have so many kids? Obviously someone is making them but she is not "married" but a "single" mother getting welfare.......Do not fool yourself.....

Take their damn benefits away with no way of getting it back period. This includes all those clowns that withdraw from casinos also. The governor thinks that by not allowing them to withdrawl at certain places it's going to stop it, it's not. This boils my blood and I don't feel any pity for people that use FREE money for stupid things like that. Let them starve it wouldn't bother me.

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