RESEARCH

UPDATE: In a follow-up investigation into EBT transactions in Chattanooga and Knoxville, Tennessee Watchdog uncovered more welfare abuse, including transactions at a Knoxville strip club and a Chattanooga bar. As a result of this series of reports, Gov. Bill Haslam and House Democratic Leader Craig Fitzhugh have both remarked that reform is need to prevent this abuse. Read more about this bipartisan call for reform at TNReport.com.   July 31, 2012 NASHVILLE – The Beacon Center of Tennessee today called on state lawmakers to reform the state’s welfare system to prevent abuse of taxpayer money. In a recent investigation, the Center’s Director of Government Accountability Christopher Butler uncovered numerous examples of abuse by Memphis welfare recipients, including transactions for hundreds of dollars at liquor stores, malls, nightclubs, and even a charge for a tour of Graceland. The report, published on the Center’s investigative journalism website, TennesseeWatchdog.org, and broadcast by Action News 5 in Memphis, detailed transactions using welfare recipients’ Electronic Benefit Transfer (EBT) cards between October and December 2011. Some of the most alarming purchases included:

• Graceland’s ticket office — $80 (two transactions)
• Wolfchase Mall — Almost $500 (four transactions)
• Airport Inn Hotel — $100
• United States Postal Service (USPS): $360 (two transactions)
• Senses Nightclub — $60
• Waffle House — $120
• AutoZone — $600 (five transactions)
• Southland Mall — $200
• Orpheum Theater — $120
• Best Buy — $60
• United Parcel Service (UPS) — $80

In addition, thousands of dollars was withdrawn or spent using EBT cards at numerous liquor stores throughout Memphis, with one transaction totaling $790. “It is clear that no one is protecting taxpayers when it comes to Tennessee’s welfare program,” said Beacon Center CEO Justin Owen. “Even worse, this money is designed to provide necessities for the children of welfare recipients, yet our investigation shows that it often goes to fund alcohol, concert tickets, and other frivolities.” The investigative report comes on the heels of an executive order issued by President Obama, which allows states to waive the work requirements under the welfare program. The Center is calling on state lawmakers to ban the use of EBT cards to purchase nonessentials, limiting the purchases to food, clothing, shelter, and other necessary items. There should be meaningful consequences for recipients who abuse the program or businesses that accept prohibited transactions. Further, legislators should rebuff the president’s efforts to weaken the law’s work requirements. These reforms will ensure that struggling families can care for themselves and their children, incentivize self-sufficiency, and protect taxpayer money in the process. The original Tennessee Watchdog report can be found at: http://tennessee.watchdog.org/2012/07/30/taxpayers-fund-special-unusual-perks-for-memphis-welfare-recipients/ Action News 5’s story on the report can be viewed at: http://www.wmctv.com/story/19151942/the-investigators-how-welfare-dollars-are-being-abused The Beacon Center of Tennessee is the state’s free market think tank. The Center’s mission is to change lives through public policy by advancing the principles of free markets, individual liberty, and limited government.

###