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By Alan Gathright October 13, 2016

NRCC: Morgan Carroll voted to let welfare recipients use benefit cards at strip club, pot shop ATMs

A Republican group has launched a racy ad saying Colorado state Sen. Morgan Carroll, a Democratic congressional candidate, voted to allow welfare recipients to use public benefit cards at ATMs in strip clubs and marijuana dispensaries.

The National Republican Congressional Committee’s ad shows how down and dirty the race between Carroll and Republican incumbent Rep. Mike Coffman is getting in the final sprint to Election Day. They’re fighting over suburban Denver’s 6th Congressional District, one of the nation’s most competitive swing districts.

"Career politicians waste lots of money. Morgan Carroll is one of the worst," the narrator says at the beginning of the ad, titled "Clubs."

"Carroll voted to allow welfare recipients to use your tax dollars at ATMs at strip clubs and pot dispensaries," the narrator continues as the video shifts from Carroll addressing the Legislature to her standing at a podium in front of a red neon silhouette of a nude female figure and the words "STRIPPERS" and "MORGAN CARROLL" on a brick wall. There's a row of marijuana-filled jars beside the senator.

"It's enough to make you ask, 'What's Morgan Carroll thinking?' Welfare for lap dances? Morgan Carroll is careless with our money," the ad concludes.

We examined the claim that "Carroll voted to allow welfare recipients to use your tax dollars at ATMs at strip clubs and pot dispensaries."

The facts are fairly straightforward.

Carroll was among a dozen Democratic senators who voted against final passage of a 2015 bill to prohibit welfare recipients from using state-issued electronic benefit transfer (or EBT) cards to obtain cash from ATMs at pot shops and strip clubs. Low-income families use these debit cards to buy "essential goods" such as food and clothing and to help pay for utilities and rent.

Senate Bill 65, which became law, expanded on existing state law prohibiting people from using the cards to withdraw ATM cash at liquor stores, casinos and gun shops. Federal law already required states to prevent people receiving public benefits from using EBT cards at liquor stores, gambling and adult entertainment venues. Colorado also has had trouble preventing people from withdrawing ATM cash totalling hundreds of thousands of dollars at casinos and liquor stores, according to Watchdog.org.

State officials and lawmakers warned that Colorado would face financial sanctions for failing to comply with federal prohibitions against EBT card use at strip clubs. There were also concerns about a federal crackdown after several reports of people using the benefit cards at shops selling medical or recreational marijuana -- a drug that’s legal under state law but illegal under federal law.

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"We stand to lose a lot if we don't show we are trying" to prevent the use of tax money for marijuana, Republican Sen. Vicki Marble, a primary sponsor of the bill, told the Associated Press last year. "The growers here put in a lot of time and effort. A raid would be absolutely devastating to our state."

Why did Carroll -- along with many other Democratic senators -- vote against the bill?

"The reason she voted against it was because of 'banking deserts,' where many poor people don't have" bank ATMs in their neighborhoods, said Carroll campaign spokesman Drew Godinich. Removing their ability to get cash from ATMs at the many marijuana dispensaries that dot Colorado cities and towns hampers low-income families’ ability to access money to purchase legitimate products elsewhere, he added.  

According to the Atlantic magazine, a March study by the Federal Reserve Bank of New York on the increase of "banking deserts" found that "lower-income communities and communities of color have historically and disproportionately limited access to mainstream banking services." This makes it harder for people in these communities to manage their finances and build wealth, the study said.

Democratic lawmakers had repeatedly defeated similar legislation, arguing that improper ATM withdrawals at strip clubs, liquor stores, casinos represent a tiny fraction of the total use of cash-assistance cards, the Denver Post reported. Critics also note that the 2015 law doesn't prevent someone on welfare from using their EBT card to make a withdrawal at a supermarket ATM and then go spend the cash at a pot shop or a strip club.

Our ruling

NRCC says, "Carroll voted to allow welfare recipients to use your tax dollars at ATMs at strip clubs and pot dispensaries."

There's slightly more to this than the NRCC lets on: Carroll voted, unsuccessfully, to allow welfare recipients to continue withdrawing money from ATMs at strip clubs and pot dispensaries. 

Carroll’s spokesman said the senator voted against the bill that prohibited people from using public benefit cards for cash withdrawals at strip clubs and marijuana dispensaries because she was concerned about the impact on residents of poor neighborhoods where there are few -- if any -- banking services.

State officials and lawmakers warned that Colorado could face financial sanctions for failing to comply with federal prohibitions against the use of benefit cards at adult entertainment venues.

With that additional information in mind, we rate the claim Mostly True.

https://www.sharethefacts.co/share/db00eb39-eb87-464b-92df-ce08bfbe0d45

Our Sources

Associated Press, "Colorado considers ban on welfare cards at pot shops," January 30, 2015

Watchdog.org, "Despite law, Colorado doesn’t block welfare withdrawals at liquor stores, casinos," October 2, 2014

Associated Press, "Hickenlooper signs law banning use of EBT cards at pot shops and strip clubs in Colorado," May 1, 2015

The Atlantic, "Life in a Banking Desert," March 13, 2016

Federal Research Bank of New York, "Banking Deserts, Branch Closings, and Soft Information," March 7, 2016

Denver Post, "Colorado Senate’s budget debate includes circumcisions, ATMs at strip clubs," April 18, 2012

Senate Committee testimony summary on HB15-065

Colorado Senate Bill 65, 2015

Colorado Senate Journal, Page 622, Vote on Re-Passage of SB15-065, March 31, 2015

Interview with Carroll campaign spokesman, Drew Godinich, on October 12, 2016

Interview via email with NRCC spokesman, Zach Hunter, on October 11, 2016

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NRCC: Morgan Carroll voted to let welfare recipients use benefit cards at strip club, pot shop ATMs

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