200 ATMs at casinos, strip clubs cut from welfare network

Nearly 200 ATMs in casinos and strip clubs have been removed from the network that allows access to California welfare benefits, and the ban may be extended to bingo halls, racetracks, gun stores and massage parlors, state officials said Friday.

FOR THE RECORD:
An earlier version of this article incorrectly said ATMS had been removed from 200 casinos and strip clubs.

The announcement follows Times reports that millions of dollars have been withdrawn from welfare accounts at gambling establishments and adult clubs with debit cards issued to people on state aid.

The cash, meant to help the needy feed and clothe their families, was dispensed at casinos and poker rooms at a rate of more than $227,000 per month between October and May, state officials have acknowledged.

In his introduction to an 18-page reform plan released Friday, California Department of Social Services Director John A. Wagner said it is his responsibility to “ensure that benefits are used for the purposes for which they are intended.”

The plan, which Gov. Arnold Schwarzenegger last week ordered Wagner to produce, includes beefing up the department’s computer systems to detect waste and fraud and updating the document that welfare recipients sign before they get benefits.

“The form currently does not provide guidance regarding the use of the cash aid,” Wagner wrote.

Schwarzenegger will review the department’s suggestions for other businesses to remove from the list. “We’re going through the suggestions to see which ones make sense,” spokesman Aaron McLear said Friday.

Since 2007, nearly $4.8 million has been withdrawn from welfare accounts at gambling establishments, state officials said last week. The amount is small compared with the billions California spends on welfare each year, but it has taken on symbolic significance as state leaders struggle to close a $19.1-billion budget deficit.

Schwarzenegger proposed eliminating CalWorks, which includes the cash portion of welfare benefits, in May.

The addresses of casinos, strip clubs and many other businesses that Wagner acknowledged are inconsistent with the goals of the welfare program appear on the state website showing beneficiaries where they can withdraw cash. Bars and bail bond businesses will also fall under the state’s review, Wagner said.

Medical marijuana dispensaries also appear on the website but were not mentioned in the reform plan.

It is not clear how much was withdrawn at most of the establishments because the Schwarzenegger administration denied a January request from The Times for a copy of the state data file showing withdrawals from all ATMs in the network. Officials said federal law prohibited them from releasing sales data for “food retailers.”

jack.dolan@latimes.com