The Gongwer Blog

On Unemployment Fraud Debacle, Snyder Has Said Little

By Zachary Gorchow
Executive Editor and Publisher
Posted: August 14, 2017 3:23 PM

The state government that Governor Rick Snyder leads wrongly determined about 37,000 Michigan residents committed fraud to obtain unemployment benefits and seized almost $21 million from them in principal, penalties and interest that is now says it is repaying.

It is a disaster whose consequences have yet to be fully quantified.

In the more than two years since the scandal surfaced publicly through lawsuits filed by those wrongly found by the Unemployment Insurance Agency to have committed fraud and then forced to pay in many cases tens of thousands to the state through wage garnishments and seized income tax refunds, Mr. Snyder has said little.

For more than a year and a half, the administration fought the allegations aggressively in court and before the Legislature.

Last July, 15 months into the public phase of the crisis, Mr. Snyder began to take action. He installed Wanda Stokes as the new director of the Talent Investment Agency and while a Snyder spokesperson said at the time the problems at the UIA had nothing to do with the change, that spokesperson also said Ms. Stokes was in charge of improving the agency to prevent the issues from recurring.

This year, the state settled the federal lawsuit involving the UIA with a series of detailed steps the state had to take. However, it has continued to fight, so far successfully, other cases seeking damages for plaintiffs wrongly accused. The UIA continues to fight in court a finding that it wrongly claimed a woman owes the state the relative pittance of $158 in unemployment benefits it says she should not have received (the Court of Appeals says she had the right to that $158).

On the Flint water crisis, Mr. Snyder, several months into it, offered an emotional apology for the state’s role and lamented he had not responded the concerns about water quality as they arose.

But on the unemployment fraud scandal, Mr. Snyder has largely avoided the topic in his public remarks. He did not address it in his State of the State speech this year. He has left the public pronouncements on actions the state is undertaking to Ms. Stokes.

When Mr. Snyder signed into law last year policies initiated by the Legislature in response to the scandal, Mr. Snyder’s office, in the prepared statement it released on his signing of 32 bills, led with his signing of a bill allowing advanced practice registered nurses to provide expanded medical services and provided a statement from the governor on that legislation. The statement dismissively said the unemployment legislation, PA 522 of 2016, “codifies reforms the UIA has already put in place.”

When the Detroit Free Press’ Paul Egan asked Mr. Snyder whether he thought those wrongly accused deserved compensation from the state at a press briefing with reporters after his budget presentation in February, the governor, sounding agitated, retorted that Mr. Egan had asked him a question involving pending litigation and he would not discuss pending litigation.

Late last year, in the only other public comments I could find from Mr. Snyder on the unemployment fraud story, Mr. Snyder told the Free Press the problems were “not a good thing.”

“The system didn’t work well. We’ve worked hard to go back and review those cases and hopefully correct them,” and “I think we’ve made a lot of progress in addressing those issues,” he told the Free Press.

Much like the Flint water crisis, the still unfolding unemployment benefits scandal has become a constant story with a drip-drip-drip quality that is drowning out other initiatives the governor wants to emphasize.

Unlike the Flint water crisis, Mr. Snyder has yet to publicly get involved.

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