stepsons mother allows him to drink beer, what can we do?

My 14 year old stepson recently came home from a weekend visit with his mother. He shared with his father and I that his grandma let him have a beer after mowing the lawn. We do not approve of such behavior, even though the biological mother feels it is a normal behavior based on her german heritage.
My other three stepchildren still live with the biological mother, even though she gave us custody of the oldest child. He was "too much for her to handle" and was getting in lots of trouble, failing school, getting kicked out of schools ect. Since he has been with us he has become an honor roll student, in involved in good activities(school foortball) and is becoming very well adjusted. The younger kids(10,8,6) have missed multiple days of school(50+tardies, and tons of absences) and are doing very poorly. The 10 year old had 3 D’s at the last grade check. She keeps their house very messy, and the apartment itself is in very poor condition(roof leaks in several places, sinks in bathroom only works intermittantly, old furniture fixtures rotting on the porch of building with garbage in them). Often she calls becasue her electric or water or other utility is turned off becasue she forget to pay the bill and doesn’t have the money to pay to get it turned back on, sometimes leaving that utility off for several days or more.We pay the ordered child support, so please don’t say that its our fault. We pay almost 1200.00 per month And she is still receiveing suppport for their oldest child that lives with us..She also allows the kids to go to school for days on end wearing the same clothes and not bathing or brushing their teeth fors several days up to a week at a time. She lives in a very "ghetto" area of town with high crime and very bad schools. The school the kids go to is rated a 2 on a scale of 10 based on national educational standards(it is declared as a failing district). The kids always seem hungry and are dirty when they come to our house. We know she doesn’t feed them well when she has them, it is often take out or canned food, not healthy food for growing children. She has been reported to the police and childrens services(14 times) in her town, but the just sweep it under the rug. The mother refuses to move out of the area becasue it is where she grew up.
I have a few questions:
1) What legal trouble can custodial parents get into for our oldest drinking beer with noncustodial parent?
2) What can we do to prevent our oldest from going with his mother to visit the family that condones the drinking?
3) what can we do to help the other three children? We want cusotdy, but the law in our state favors the mother unless she is deemed unfit(on drugs, physically abusing the children, homelss).
We want the kids with us becasue we can provide them a more stable household. Amazing schools, and nice home in a low crime area, clean clothes everyday, give them baths and brush their teeth everyday, feed them good food, engage them in activities, help them with school work. We live in Kentucky, but she lives in Ohio.
I think some people might have the wrong idea about the drinking thing. IN our household, we do not condone underage drinking. It is not an ethical issue as much as a legal issue. It is illegal for him to drink at 14. We do not want him to think that it is ok.

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