Budget hits against LIRC going forward

UPDATE (14 July 2015): The final bill, 2015 Wis Act 55, has been published, and the JFC changes to LIRC’s budget are back in: see § 146m for the provision transferring the Commission from DWD to DOA and the governor appointing the Commission’s general counsel and p.133 of the PDF of the budget act for the budgetary changes.

UPDATE (12 July 2015): The enrolled bill removed the three changes made by the JFC described below.  While I had searched through all the amendments passed on the final days of the budget debate, I apparently missed the amendment that rolled back the JFC changes. So, the Commission’s original budget remains unchanged from what was originally proposed.

As reported earlier, the Joint Finance Committee made three surprising changes to the Labor and Industry Review Commission: (1) transferring the administrative location of the Commission from the Department of Workforce Development to the Department of Administration, (2) transferring $434,900 from the Commission to DWD for program integrity (i.e., claimant auditing), and (3) making the Commission’s general counsel a political appointee of the governor.

The amended budget passed by the Senate yesterday includes all of these changes. In particular, Section 146m of Senate Substitute Amendment 1 (see p.28) has this new language:

The governor shall appoint an individual to serve at the pleasure of the governor as general counsel for the commission.

And, the unemployment funds provided the Commission are now $1,953,300, see pp.187-8, down from $2,388,200 contained in the original version of the budget bill (see p.332).

The general counsel switch raises some ethical considerations that could be problematic. The Commission members, after all, are independent and appointed for set terms by the governor. This new language makes the general counsel someone who reports directly to the governor and NOT the Commissioners, however. So, for the Commissioners to retain their independence, they probably cannot turn to their general counsel who now reports to someone outside the Commission for advice. That is, whoever the new general counsel will be, that person will have nothing to do since that attorney cannot provide legal advice to Commission members when working on behalf of and reporting to someone outside the agency. And, the Commissioners cannot disclose their confidential consideration of decisions to someone who works on behalf of another.

The Commission staff attorneys losing their jobs is a more straight forward problem. Perhaps they can find positions in vacant attorney jobs elsewhere available in the state. If they do not, I doubt they will file for unemployment given recent changes being developed for the definition of concealment. At least, good luck to them on their new endeavors.

Concealment in Michigan

A heartrending story about how concealment has gone off the rails and ensnared countless innocent claimants is recently posted in the Detroit MetroTimes.

The story describes how computerized claims handling is automatically finding claimant fraud based on protocols that do not reflect actual real-world events and how web-based communications (in place of regular mail) to notify claimants of the fraud accusations have made fighting these false accusations ever more difficult. Because the claimants are NOT checking their web portals when no longer filing for unemployment benefits and the fraud accusations arrive months or even a year after the alleged fraud took place, claimants are missing the fraud notice and so miss the deadlines for challenging the accusations. The result: folks are having their lives upended, are filing for bankruptcy, and tragically committing suicide.

A federal civil rights complaint over these practices was filed in April of this year. For too many, however, the damage has been done.

Rick McHugh, staff attorney with NELP, had the following to say about this issue:

Over recent years, NELP has pointed out that state agency barriers related to technology now serve as barriers to UI benefit access; perhaps exceeding the impact of legislation and legal measures in some cases. In the fall of 2013, Michigan implemented a new software package for UI benefits that included fraud detection software. This has resulted in many problems in the administration of UI benefits, including an explosion in accusations of fraud. These determinations are made solely by computer and are widely known in Michigan as robo-fraud.

Metro Times, a Detroit-based publication roughly equivalent to the Chicago Reader or Bay Guardian, has just published an expose that covers many aspects of Michigan robo-fraud. Literally tens of thousands of individuals have been accused of fraud without any evidence of intentional misrepresentation. While these are frequently reversed, many folks fail to appeal and many resolve never to file for UI again. For this reason, Metro Times refers in its title to the criminalization of UI, and I fear that is not an exaggeration.

A host of advocates including Michigan UI Project, Sugar Law Center, the UAW and a private attorney have joined together in a federal lawsuit and media is finally focusing sympathetic attention on the problem. NELP has asked the U.S. Department of Labor to intervene. Local advocates are approaching members of Congress.

The morals of this story are 1) technology can be a tool for customer convenience, but also a barrier to just administration of UI programs, 2) simply monitoring formal rulemaking and legislative forums for UI developments can result in private decision making within agencies that have wide, negative impacts, and 3) claims of fraud and improper payments have been turned into weapons against UI and we must develop a better narrative to contend with these attacks.