But Tony says it is the store, not himself, that is the real beneficiary. In fact, he is convinced that he is "triple-charged" for the most basic necessities. "I'm given food but no money," he says. "The food is charged against my check, and by the middle of the month I'm always short and have to run a credit. You tell me how it costs so much."
Adi Clark, a case manager with Conard House, a nonprofit housing organization with a four-month waiting list for its payee program, says Tony's story is the rule. "People have been getting ripped off for years," she says from her Tenderloin office. "I have a client now in the process of changing over from a store to us. It's still going on."
One hub of this dubious exchange market lies between Market and Howard streets on Sixth, where convenience stores, bars, pawnshops, liquor stores, residential hotels, and laundries are engaged in a lively, non-taxable business of cashing disability checks.
"If you was to get on SSI," exclaims one elderly man leaning against the Alder, a Sixth Street hotel, "any one of these places will handle your money -- and clean your clock."
Thriving off elderly, sick, addicted, or mentally ill people, these merchants take a cut here, a cut there, racking up monthly debits in a black market that ensnares the city's most vulnerable citizens in store-by-store corruption. "This is how it works," explains a Sixth Street store clerk who, like other merchants interviewed, requested anonymity. "Social Security makes the check out to me and I cash it. If I'm a good payee, I pay his rent and dole out an agreed-upon allowance with what's left for the rest of the month. If I'm a bad payee, I don't pay the rent and give him all of his check taking some off the top. He'll be back in a week needing credit and I pad the credit. If he buys $15 worth of stuff, I'll write down $25."
As a result, he says, a never-ending cycle of dependency develops. Each month, the SSI recipient receives his check and pays off his credit as well as a cashing fee that in some stores can be as high as $100. What little remains of his check is quickly spent, with additional credit resulting.
"It's a desperate situation," says Richard Hernandez, director of Public Guardian, a nonprofit payee program for 1,200 mental health clients. "Often people overspend -- and owe $200 to $300 at the beginning of the month -- and don't have enough to pay rent."
Guaranteeing that the scam runs smoothly is none other than the local Social Security office -- which blithely denies the very existence of the graft booming beneath its windows.
"We check out our payees very carefully," insists Jack Louie, assistant district manager for the Social Security office at U.N. Plaza. "We make sure they are aboveboard."
Under federal law, SSI applicants are evaluated by physicians who determine the extent of their disability and whether or not they are mentally competent to handle their money. If they are deemed incompetent, regulations allow payees approved by Social Security to charge service fees of $25 to $50 depending on the disability. The Social Security office provides a list of nonprofit agencies offering payee services, but everyone has a waiting list of at least a few months with some putting recipients in holding patterns as long as two years. Statistics from the California Department of Social Services show that 1,018,687 people receive SSI in California, 268,021 of whom are required to have payees.
Louie says Social Security's "Guide for Representative Payees," a pamphlet distributed to all payees, delineates a payee's responsibilities "very clearly" to prevent malfeasance. Payees are required to use the funds properly, and, according to the "Guide," a payee is expected to see that the day-to-day needs of the beneficiary are met, including food, rent, clothing, and recreation. Preferred payees are family members or nonprofit agencies, but a lack of relatives and the inaccessibility of nonprofit payees combine to place many recipients at the mercy of liquor stores and corner markets.
The Social Security office, however, is oblivious. "Misuse of the payee system has not been a problem in our service area," Louie says.
As far as Sixth Street merchants are concerned, his ignorance is their bliss. "If that's what he wants to believe ...," one store owner says rolling his eyes as his voice trails off with a shrug. "Social Security asks you three stupid questions. You go in with your guy and they ask how long have you known them. I always say over a year. How often do you see them? I always say once a week. They don't ask what your income is, or are you stable, or how long have you lived in the city. I've gone in there and not even known the person's name until I'm sitting there."
Even nonprofit programs contracting to provide payee services and which are accustomed to the intense scrutiny of county and state auditors say they are virtually ignored by Social Security. "I'm confident of our work, but no one has come to check," says Carrie Abbott, director of the Tenderloin Housing Clinic's Homeless Program, which operates a money-management program. "They just ask what the money was spent for. We're audited by the city, but Social Security has never asked for a copy of the audit statement."
So lax is evaluation that welfare recipients are approved to manage Social Security recipients' money nearly double their own $340 monthly General Assistance checks. "I was asked was I working and what my address was, that was it," says Michael, a GA recipient who says he is responsible for two SSI recipients. "It was a 15-minute interview at the most."
Service providers say abuses are inevitable because of the lack of programs for disabled recipients, who are required to have payees. As a result, they say, many individuals approved for SSI can receive their sole source of income only by seeking dubious alternatives.
"It's the proverbial Catch-22," explains the Tenderloin Housing Clinic's Abbott. "People on SSI find waiting lists from three months to a year. So they go to stores. Stores seem aboveboard, part of the establishment. The problem is the actual recipient's name is not required on the check, only the payee's. That leaves the payee with a tremendous potential for abuse."
Although the "Guide" states that a payee "convicted of misuse may be fined and/or imprisoned," nonprofit administrators say the threat is a paper tiger. "We've seen payees accept checks and leave town," says Charlene Tschirhart, director of the St. Anthony Foundation's Justice and Education Program. "We file police reports, but we've never seen a perpetrator tracked down."
With the passage of the Social Security Independence & Program Improvement Act in early 1995, more nonprofits did develop payee programs. The act allows agencies to charge SSI recipients for the money-management services, creating what critics charge is a cottage industry of programs feeding off the people they are intended to serve.
"The need is out there, but there are no funds for more agencies, so the result is programs are charging people to act as their payees," says Kevin Fauteux, program manager of Lutheran Social Services, an agency that provides a payee program for people with AIDS. "There are ethical problems with this, charging people to cash a check when they don't get much to begin with."
But Loretta Gibeau, who administers a charge-for-service payee program at Walden House, a drug rehabilitation agency, says the fees are necessary if organizations without city contracts for payee programs are to provide for SSI recipients. Gibeau says Walden House has just purchased a $50,000 computer as part of a plan to expand its payee program from 300 to 2,000.
"We cover rent, food, and PG&E," says Gibeau. "We have agencies who don't charge that refer people to us off of their waiting lists. I don't feel exactly right about it. It's hard enough for clients as it is without making them pay, but if they didn't have this service they wouldn't have food or rent."
And no new money looms on the horizon to alleviate the situation anytime soon, experts say. "There are not a lot of dollars to contract out," explains Jane Fishburg, director of homeless programs for the Department of Human Services. "We haven't had a huge capacity to expand."
All of which leaves SSI recipients with options less than desirable: waiting lists or stores, fee-for-service programs or the streets. This for $625 a month.
"Programs are full, and hundreds of people are ripped off," says Hernandez. "Their lives are left to businesses and thieves.