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Minnesota Public Radio attacks KSTP’s ‘Welfare Waste’ series — who’s right?

MPR reporters don’t usually play media critic, but Madeleine Baran’s Tuesday story was particularly pointed. Her “Misuse of welfare money is minimal” was a direct rebuke of KSTP-TV’s “Welfare Waste” investigative series.

In November, reporter Mark Albert revealed welfare benefits being used for tattoos, at liquor stores (101 times in a single month) and in places as far away as Hawaii and the U.S. Virgin Islands. In February, he chronicled cash withdrawals at casinos, bingo parlors and tobacco shops — places supposedly blocked from welfare’s ATM-like network.

Baran examined the same data and pronounced it a trifle.

The flier that kicked off KSTP's investigation
The flier that kicked off KSTP’s investigation

A half-million state welfare recipients carry “EBT” cards loaded with a federally regulated food benefit; 176,000 have a state cash allowance. Those 101 liquor-store transactions? Albert’s stories “did not explain that in most of the transactions, the recipient was using the card to buy food,” Baran stated.

Using transaction codes that distinguish between food and cash, MPR said the food totaled a mere $225.90.

ATM withdrawals? About $30,000 total in stores with “liquor,” wine” or “tobacco” in their name — less than one tenth of 1 percent of $17.8 million in September 2010 transactions.

Out-of-state spending? Nearly half of the $320,000 occurred in border states, especially border cities such as Superior, Wisconsin. As both Baran and Albert noted, federal law allows food-benefit purchases anywhere in the U.S.

Republicans seized on Albert’s report as part of a longstanding push to rein in Minnesota’s cash benefit. Following Baran’s story, House DFL Minority Leader Paul Thissen tweeted, “Ms. Baran does a fine job separating fact from fiction on the welfare card issue.”

Republicans have since proposed banning ATM use, spending on liquor, tobacco and lottery tickets and anything bought out of state, specifically crediting KSTP. Echoing Baran’s numbers, DFLers contend ATM cash is used far more often for legitimate purchases such as rent. However, DFL Gov. Mark Dayton told KSTP he would “consider supporting” the Republican bill.

After Albert’s initial reports, the state Department of Human Services revised its processes Jan. 4 to pointedly remind recipients that benefits are “to be used for basic needs not non-essential items.”

Fraud, but of a different sort 
Albert says his report cited liquor stores because the state told him ATM use was banned there. The state turned out to be wrong. Albert also said his stories repeatedly distinguished between food benefits (which the state can’t regulate) and cash — and they did.

However, a look at the graphic whizzing by during the November “liquor store” reference shows almost all of the transactions labeled FSP – food support purchase. As it turns out, some liquor stores sell food, including a California liquor store mentioned in the report. KSTP viewers were never told this.

Likewise, KSTP’s report began with this intro: “Cigarettes, alcohol and tattoos – bought with your money.” The report kicked off with a tattoo artist’s flier stating “We accept EBT.”

Even though viewers saw undercover video of the unlicensed artist talking EBT, he’s not shown accepting it. That’s because he didn’t have a machine, Albert explains: “The way he does it, he will barter. He would charge $150 for a tattoo, and you would buy him $150 worth of food.”

That’s fraud, but it involves the federal food benefit, not Minnesota’s cash allowance — the report’s focus at that particular moment. (As the flier noted, “No cash, no problem – we accept EBT.”)

Albert’s larger point is correct: Minnesota welfare recipients can use the cash portion on whatever they want, even tattoos. But that wasn’t the scam here.

Similarly, a subsequent report about EBT used at casino ATMs relied on a welfare recipient KSTP sent to gamble away a few hundred dollars — not an unembedded welfare recipient doing it.

Again: it is possible to use the cash benefit for gambling — assuming welfare recipients have the free cash. Even MPR’s report included an interview with a woman who spent $6-$14 a month of her cash benefit playing bingo.

But how much do gambling-site ATM withdrawals add up to? Albert’s report said 330 transactions and $25,800 over two years — enough to pay for 152 welfare families for a month, he noted.

However, that total also averages 14 monthly transactions among the state’s 176,000 cash beneficiaries — and $1,075 a month compared to the $14.8 million withdrawn in September.

To repeat: it is very difficult to say what welfare recipients spend their cash on — which cuts both ways depending on which side of the welfare debate you’re on.

It’s possible some of that $25,800 withdrawn as casinos went to the equivalent of convenience-store food at a liquor store, or other societally acceptable purchases (given that casinos are major centers in some Minnesota towns). Likewise, EBT cash withdrawn elsewhere could be gambled away at the nearest gaming hall.

Albert is right that the system allows such spending, and sometimes enables it. But Baran’s tacit conclusion — that the amount is too small to merit sweeping reforms — also looks strong.

State shortcomings
Albert notes that a major facet of his report is unchallenged. The state Department of Human Services told him they blocked EBT access at “casinos, tobacco shops, cruise ships and liquor stores,” but his data dive proved that untrue.

DHS embraces the goal of discouraging spending at gambling joints and liquor stores, but third-party contractors make a ban less than airtight. The state’s Indian gaming association said it was “unaware of this issue” until the KSTP report and pledged to work with its ATM vendors on a solution.

In January, the department estimated banning EBT cash withdrawals at retailers’ registers (not ATMs) would cost $358,000 to implement, plus $114,000 annually to manage. Banning ATM use for all welfare recipients would be simpler, but risks throwing the baby out with the booze bottle, given the low percentages the MPR report revealed.

“Our ultimate goal is to hold government accountable,” Albert says. “I welcome colleagues to the story, and more attention to the issue is a good thing. We need to be just as accountable.”

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Comments (20)

  1. Submitted by Scott Stansbarger on 03/17/2011 - 11:48 am.

    KSTP reporting a story where the facts are thin and biased? Shocking, I tell you!

  2. Anonymous Submitted by Anonymous on 03/17/2011 - 12:11 pm.

    This just affirms the notion that KSTP is a Republican propaganda outfit, just like FOX.

  3. Submitted by Greg Kapphahn on 03/17/2011 - 01:07 pm.

    KSTP’s story is just par for the course in current TV “news.” All the mainstream media sources allow the weasel to call the tune, and thereafter, are only to happy to join the dance.

    Accuracy and integrity have long since gone out the same window which, once opened, allowed the raven of “higher profits” to enter and perch atop the sculpted busts of their founders, from thence to repeat the mantra,

    “higher profits,”

    “higher profits,”

    “higher profits,”

    (or you’re out the door).

    Given the current funding environment, it’s more surprising (and greatly appreciated) that MPR actually challenged KSTP’s false and misleading conclusions which were, of course, reached for the purposes of producing “rile up the public to keep them watching us” TV, but were not actually supported by the data.

    Every day, I miss Walter Cronkite, Chet Huntley and David Brinkley.

  4. Submitted by Don Frey on 03/17/2011 - 02:29 pm.

    Unfortunately, we seem to now live in a world where everything is governed by how it will look in a sound byte. This certainly pervades our politics these days, where civility and respect for opposing viewpoints have all but disappeared. The same,unfortunately, can be said for our airwaves, where credibility is way down the list. Instead, ratings, and therefore profits, are what motivate these days. Journalistic integrity doesn’t even seem to matter, and has been made almost an oxymoron by the talking heads of today.

  5. Submitted by Karen Sandness on 03/17/2011 - 05:02 pm.

    This is part of a trend I’ve noticed in right-wing propaganda over the years: telling the middle class that the poor have it easy.

    “Our poor people have DVD players!” goes the line, which must have been written by someone who bought his DVD player when they still cost hundreds of dollars and hasn’t noticed that they’re now about $30 at Target. “They’d be rich if they lived in Haiti!” Well, yes, they’d be rich if they could pay Haitian prices.

    And a lot of low-information middle class people eat it up, this insidious propaganda that says that the poor are poor because they’re lazy and that they’d stop being poor if the state stopped “coddling” them.

    However, if you sort out all the right-wing propaganda about the poor, it doesn’t add up. According to this propaganda, people are poor because they’re lazy. They should work. But the minimum wage is too high, which is why all the jobs went overseas. If they work full-time and are still poor, they should get better jobs. If they aren’t qualified for better jobs, they should go to college or vocational school, but they shouldn’t get any grants for it. They shouldn’t have children, but they shouldn’t have birth control or abortions, either. Their children should stay in school, but they shouldn’t have small classes or well-equipped schools or well-paid teachers. Their children should get vouchers to go to private schools, but private schools shouldn’t be required to accept them, especially if they have dark skin or don’t speak English well. They don’t pay taxes (sales tax anyone?). They shouldn’t have DVD players or cell phones, even though you can get a cell phone for less than a a landline these days.

    The perverse result of this propaganda is that middle-class people are urged to envy and resent the poor, instead of being thankful that they don’t have to struggle to make it to the end of each month.

    I just have to shake my head at people’s susceptibility to propaganda.

  6. Submitted by John Olson on 03/17/2011 - 05:36 pm.

    Three words:

    “Smiley Face Killer”

  7. Submitted by Peter Swanson on 03/17/2011 - 09:21 pm.

    1. Can one purchase “convenience-store food,” other than chips and candy, at a liquor store?

    2. In this battle between MPR and KSTP, which one is supported by your tax dollars?

  8. Submitted by James Lockwood on 03/18/2011 - 12:36 pm.

    One of the things that much of the analyses miss is the fact that in poorer areas, there is a lack of viable services that would serve these recipients’ needs. Take East Side Saint Paul, for example. From I-35 to White Bear Avenue, and 7th Street up to Larpenteur, there is one US Bank branch, one Wells Fargo branch, and no TCF branch. Until recently, there was one major grocery chain (now there is a total of two). All for a population of nearly 65,000.

    We have lots of liquor stores with ATMs, though.

    And, we have fast food chains where a dollar can buy you more hamburgers than it can apples at the grocery store.

    Suburban, middle class attitudes about access to cash, banking and groceries cloud judgements about how people helped with state support live. These people are still human, but unfortunately corporations that supposedly can serve the needs of every taxpayer do not see the poor as a segment to serve.

  9. Submitted by John Clawson on 03/18/2011 - 01:43 pm.

    And Mr. Swanson, #7, continues the right-wing divide and conquer startegy, attack by snide innuendo, when he asks about the possibility of federal dollars underwriting the MPR rebuttal to the original KSTP story. There WERE no federal funds used; this kind of story is not what MPR’s small amount of federal funding is used for, and a good-faith critic would know that. This story WAS underwritten, however, by the supporting member contributions of the people on my block and next one over. And what OF it if federal funds HAD been used? Which story, MPR’s or KSTP’s, was based on fact and acted to educate/enrich/build up the community about a real issue instead of dividing us into warring camps of suspicion and envy based on error, misrepresentation and least-charitable interpretations? Leave the poor alone; they’ve enough problems without the KSTP/Swanson evil eye of resentment, enmity and (dare I say it?) class warfare.

  10. Submitted by Paul Udstrand on 03/18/2011 - 02:10 pm.

    Has anyone asked how much the banks administering the ATM system are making?

  11. Submitted by Bernice Vetsch on 03/19/2011 - 07:37 pm.

    The two basic views of human nature are illustrated right here: Are people basically good and will grow to reach their full potential if given opportunity, freedom and assistance, or are they born basically bad and in need of strict control from above lest they not grow up to be morally correct and judgmental like their parents?

    What seems like a better way to help the poor would be to adopt a negative income tax, as proposed by Richard Nixon some years ago.

    When the IRS received a return that showed an income below the poverty line (or the designated percentage above the line), it would issue a check to that person/family each month for the next year. It would no longer be the privilege of the judgmental to know and complain about the occasional purchase of something they disapprove of.

    The poor would no longer have to suffer humiliation or degradation because of their economic status. Social workers could return to being social workers instead of spending endless hours obtaining financial data from their clients.

  12. Submitted by Steve Rose on 03/23/2011 - 09:54 pm.

    “It’s possible some of that $25,800 withdrawn as casinos went to the equivalent of convenience-store food at a liquor store, or other societally acceptable purchases”

    Quite the opposite is possibly true too; the money could be spent on illicit drugs. We wouldn’t know because we don’t test welfare recipients for illegal drug use. Try getting a job at Home Depot, and you will be taking a drug test.

    Is buying food at a convenience store or liquor store really societally acceptable? Do you do it? I don’t; I need to get better value for the money I earn. I shop at a store that doubles manufacturer’s coupons on Wednesdays.

  13. Submitted by RB Holbrook on 03/24/2011 - 05:15 pm.

    “I need to get better value for the money I earn. I shop at a store that doubles manufacturer’s coupons on Wednesdays.”

    That’s great, Steve. I’ll bet you own a car that you can use to drive to one of those stores. Have you ever tried to do your shopping for the week with public transportation? Try lugging four or five sacks of reasonably-priced food onto your typical Metro Transit bus. Better still, try walking them home. For a lot of people, a convenience store or liquor store could be the only place they have to buy groceries.

  14. Submitted by Steve Rose on 03/25/2011 - 12:03 pm.


    Yes I do own a car, and yes I have done my shopping for the week on public transportation, on your typical Metro Transit bus. Walking my groceries home; done that too. I’ve done that in Minneapolis, Detroit, Dallas, and this week in Chicago.

    I am pleased that you think it is great.

  15. Submitted by Peter Swanson on 03/25/2011 - 01:58 pm.

    John Clawson (#9),

    1. I didn’t say “federal” tax dollars, I just said tax dollars.

    2. Some people like the KSTP report, others like the MPR report. Each one has a perspective. In one case, however, your tax dollars directly or indirectly support the reporting.

    3. “KSTP/Swanson evil eye of resentment” – Always list Swanson’s name first, even for evil things!

  16. Submitted by Joe Forkeybolo on 03/31/2011 - 11:16 am.

    Mark Albert has never been known for letting facts get in the way of a good story.

  17. Submitted by Brandon Link on 06/15/2012 - 02:03 am.

    fraud is real people

    I work at a grocery retailer and I promise you that fraud in the EBT system is very real, in many ways the KSTP report didn’t go far enough. People will use their Minnesota EBT card, followed by their Illinois card, then their Wisconsin card, or pull out two or more MN EBT cards and use them up. There are countless instances where a customer will use their food stamps then pull out thousands of dollars in cash, drive away in their $50,000 Mercedes or be adorned in gold jewelry and outrageously expensive nail jobs, things you wouldn’t expect from someone living in poverty and barely scraping by! The program is designed to help low income persons afford healthy foods but a large amount of the food purchased is junk food and soda. As for EBT Cash that’s even worse, yes people buy tobacco with it, yes they buy alcohol with it, yes people buy VISA gift cards with it or just withdraw it all for cash at an ATM.

    Now I have friends and family members who rely on and use this system responsibly, this system is necessary in our society, but THERE IS WASTE and anyone who defrauds this system needs to be held accountable.

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