State Human Services Fails To Enforce Welfare Law

Head Of Division Makes Contradictory Statements About What She Knew About State Law

For more than a decade, state law prohibited welfare recipients from withdrawing their taxpayer-provided money at ATMs in casinos, liquor stores and bingo parlors, but the state agency charged with enforcing that law either ignored it or did not know about it.

The lack of enforcement came to light in November after a CALL7 Investigation showed welfare recipients withdrew thousands of dollars at casinos, liquor stores and strip bars.

When CALL7 Investigator Tony Kovaleski interviewed the deputy executive director for self sufficiency at the Colorado Department of Human Services, she, at first, repeatedly told Kovaleski there was no prohibition on where the taxpayer money could be withdrawn.

“For the cash assistance benefit they can take that card to any ATM machine in Colorado and use it," Deputy Executive Director Pauline Burton said last year. “Right now the law allows access points at any of those points in Colorado."

"Any ATM?" Kovaleski asked

“Any ATM,” Burton said.

“Any ATM anywhere in Colorado?” Kovaleski asked. “No limitations?"

“That’s correct,” Burton said.

“Should you be preventing this type of access? Kovaleski asked.

"I think it’s important that clients be able to access benefits easily, and they are allowed to do it at those locations," Burton said.

But Burton’s story changed after Kovaleski cited a 1998 state law that expressly prohibits welfare money being withdrawn at ATMs in casinos, liquor stores and bingo parlors.

“How come you didn't know about that law?” Kovaleski asked.

“I never said I didn't know about that law,” Burtons said recently. “The law's been in place. I knew about the law. "

“Time and time again you said it was allowable,” Kovaleski said. “It's unallowable, and you didn't reference the law in any shape or form.”

"You're splitting hairs," Burton said.

Burton conceded that she did nothing to enforce the law, saying the technology did not exist to block ATMs at prohibited locations at the time the law passed. A CALL7 review of two years of welfare ATM withdrawals shows that nearly $86,000 was taken out at the state’s casinos, more than $16,000 at the state’s bingo halls and thousands more at liquor stores.

“Your agency has taken no action,” Kovaleski said.

“We have not taken any action against the client if they have accessed their benefit in that location,” Burton said. “That is true.”

“You've known they've broken the law,” Kovaleski said.

“I think we're splitting hairs about what breaking the law is,” Burton said.

CDHS spokeswoman Liz McDonough did not want to explain Burton’s contradictory statements about the electronic benefits law.

“Do you wish Ms. Burton did not make those statements?” Kovaleski asked.

“I'm not going to respond," McDonough said.

“Was it a mistake?” Kovaleski asked.

“I'm not going to characterize anything someone else has said,” McDonough said. “I am going to address what we're doing moving forward.”

In response to the CALL7 Investigation, the department will now send out letters to welfare recipients telling them they are prohibited from withdrawing money at ATMs in liquor stores, casinos and bingo establishments. The department is now working with prohibited locations to block welfare recipient access at their ATMs. The legislature is considering a law that would add strip clubs to the prohibited list after CALL7 Investigators found nearly $3,000 withdrawn at Colorado strip clubs. It was not banned under the 1998 law. The proposed legislation would also require the vendors to block access at all the locations.

But state officials could not provide a good answer to why the state director responsible for welfare either did not know or did not enforce state law for more than a decade.

“You have proof they're violating the law and have done nothing about it,” Kovaleski said. “Isn't that a problem?”

“Tony, that's all I have to say about the problem,” Burton said.

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