Nearly 200k in food stamp dollars withdrawn at Nebraska liquor, tobacco stores


By Deena Winter | Nebraska Watchdog

LINCOLN, Neb. — Last year, Omahans spent $189,225 in food stamp dollars at liquor stores and tobacco shops, a Nebraska Watchdog investigation has found.

HELPING OR HURTING? A Nebraska Watchdog investigation found nearly $200,000 in food stamp benefits were doled out at Nebraska liquor stores and tobacco shops last year.

The money was withdrawn at the two liquor/grocery stores and 14 tobacco shops in Omaha, according to information obtained from the U.S. Department of Agriculture’s Food & Nutrition Service by Nebraska Watchdog through an open records request.

The USDA hasn’t answered a nearly one-month-old request for clarification on how much money was spent at each store, but the data indicate more than 3,000 withdrawals were made at places such as 20th Street Liquor & Grocery, All Nations Grocery, Liquor & Tobacco and a dozen Tobacco and Phones for Less locations in Omaha.

No such withdrawals were made at similar stores in Lincoln.

The USDA doesn’t release specifics about what was bought in those stores, claiming that information falls under an exemption in law, so it’s not clear whether the public benefits were used to buy food, tobacco or liquor.

Americans spent $76 billion on food stamp programs last year, with about one in seven people on the program, which is officially called the Supplemental Nutrition Assistance Program. In Nebraska, about one in 10 people are on the program.

While that $189,225 represents a fraction of all food stamp spending in Nebraska last year, it raises the question of whether the money is actually being spent on food. The USDA, which administers the SNAP program, said the vast majority, about 80 percent, of SNAP benefits are redeemed at grocery stores, supermarkets and farmers’ markets.

Nebraska Watchdog made a records request with the state earlier this year for all transactions made in Omaha and Lincoln with SNAP or Temporary Assistance for Needy Families dollars at liquor stores, tobacco stores, casinos or strip joints.

Three days later, the state Department of Health and Human Services put out a press release saying a 2012 federal law bans people on TANF from using their benefits cards for purchases at liquor stores, casinos and strip joints.

Kathie Osterman, spokeswoman for the state Department of Health and Human Services, said the USDA authorizes stores to be SNAP participants, and the stores must sell a certain amount of food to qualify. The USDA is responsible for monitoring any problems, she said.

Nebraskans on welfare don’t use EBT cards. Instead, they use U.S. Bank’s ReliaCard, a debit card. DHHS began transferring TANF benefits through ReliaCard in July 2012. The cards are also used for child support payments, unemployment compensation and provider payments (such as child care).

Osterman said U.S. Bank can block people from using the debit cards at certain types of merchants, but can’t block the purchase of certain items. In other words, U.S. Bank can block people from using the card at a liquor store, but not from buying liquor at a Hy-Vee.

In February, a federal law went into effect that banned the TANF benefit cards from being used at businesses such as liquor stores, casinos or strip clubs. DHHS also chose to apply the restriction to an energy assistance program that utilizes ReliaCard.

EBT APPROVED: A Valentine convenience store worker recently complained to Nebraska Gov. Dave Heineman that food stamp recipients mostly buy junk food with their EBT cards. This sign indicates energy drink companies are onto that.

When asked for last year’s TANF transactions at liquor stores, casinos, strip clubs and tobacco shops, DHHS said it didn’t have such information. Osterman said that’s because “we don’t hold that information.” U.S. Bank does.

So there’s no way of knowing if the public dollars are being spent for their intended purpose: to help needy families get back on their feet. Reviews of welfare transactions in Maine and Tennessee, which use state EBT cards rather than debit cards, have unearthed transactions at strip clubs and Disney World.

A convenience store worker raised concerns about how SNAP dollars are being spent during the governor’s monthly statewide radio call-in show in May.

“That program is doing nothing but funding Red Bull and Monster energy drinks,” a man named Bob from Valentine told Gov. Dave Heineman on the show. “There’s nothing a convenience store has, in my mind, that qualifies for food stamps, other than a loaf of bread and a gallon of milk and I’ve failed to in a year (sell) one on an EBT card. As soon as they buy all their junk food, they’ll pull out a wad of cash and buy Nebraska Lottery tickets.”

North Dakota Watchdog recently reported that some energy drink companies are promoting the fact their products are “EBT approved.”

The governor said SNAP recipients can do whatever they want with their own cash — “it’s a free country,” he said — but federal guidelines dictate what they can buy with their EBT cards. He noted that food stamp beneficiaries used to get a monthly check, which they could use to buy “anything they wanted.”

“At least to some extent it forces them to buy food,” Heineman said of the EBT cards.

Contact Deena Winter at Follow Deena on Twitter at @DeenaNEWatchdog

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