Feds say LePage administration endangered fairness of unemployment hearings

Feb. 27--Read the U.S. Department of Labor investigation report

AUGUSTA -- A federal investigation has found that Maine's governor and Department of Labor officials intervened in unemployment hearings in a way that could have swayed hearing officers to favor employers over claimants.

An April 11Sun Journal investigative report cited sources who said the governor had summoned DOL employees to a mandatory luncheon at the Blaine House on March 21 and scolded them for finding too many unemployment-benefit appeals cases in favor of workers. They were told they were doing their jobs poorly, sources said. Afterward, they told the Sun Journal they felt abused, harassed and bullied by the governor.

A letter addressed to Maine DOL Commissioner Jeanne Paquette summarizing the U.S. Department of Labor investigation, which was released Thursday, concluded that the administration acted with "what could be perceived as a bias toward employers" and hearing officers could have interpreted expectations that they needed to be more sympathetic toward employers.

The federal investigation also concluded that the practice of excluding hearsay evidence at hearing may be unduly restrictive, and that "failure to consider all available evidence without weighing its probative value may lead to error." Investigators also found some inconsistencies in Maine's appeal process.

The governor's office initially declined to comment on the report and instead referred all questions to the Maine DOL.

Late Thursday morning, Gov. Paul LePage released a statement by email first noting that the USDOL investigation confirmed that there are legitimate concerns about the appeals hearings, and secondly that "It is also no surprise that the Obama Administration'sDepartment of Labor is speculating my administration somehow tried to influence the hearings process."

He went on to say that "the issue has been politically motivated from the start, starting with Democratic activists in Maine and reaching all the way to the White House. The USDOL review found no evidence of wrong-doing, but uses conjecture and supposition to come to a conclusion that has no basis in fact. The focus of my administration is to ensure the appeals process is fair and consistent for both Maine employees and employers."

Paquette also released a statement late Thursday morning. She pointed out that the review noted inconsistencies in the way hearing officers have handled the admission of witnesses in hearings and other issues.

"Last year, both members of the Unemployment Insurance Commission and I raised concerns about the need for improvements and consistency in the way the unemployment system functions, especially the appeals process. Many of these concerns were echoed by complaints received by Governor Paul LePage," she said in the statement.

"The concerns that we discussed with the hearings officers last spring, related to the admission and weighting of hearsay testimony and business records, were not only supported by the findings of the Governor's Blue Ribbon Commission, but also are the same findings of the USDOL's independent review," Paquette said. "My responsibility as commissioner is to ensure that the law is applied fairly and to manage the staff of the department."

The commissioner did not comment specifically on the investigation's finding that the LePage administration -- which includes her -- intervened when it shouldn't have and that such intervention could be perceived as an attempt to influence hearing officers to "view employers more sympathetically."

However, she noted that Maine law gives her and the appointed members of the Unemployment Insurance Commission authority over and responsibility for unemployment administration.

"As commissioner, my job is to ensure not only due process for both employers and employees, but also that the unemployment system is fair, efficient and responsive and follows the law," she said in the statement.

Maine DOL spokeswoman Julie Rabinowitz added Thursday that the commissioner doesn't feel that she or the governor did anything wrong.

"She feels that she's charged with managing the unemployment system and if she sees there's a problem she has a duty to raise it," Rabinowitz said.

The federal investigation was launched in April by the U.S. Department of Labor Office of the Solicitor General after employment lawyer David Webbert called on the federal agency seeking confirmation of claims that LePage had pressured administrative hearing officers at the Maine Department of Labor to be more pro-employer in its findings on appeals of unemployment claims.

Emails released under a Freedom of Access Act request echoed complaints made to the Sun Journal by the hearing officers who attended the meeting.

LePage denied the allegations, characterizing the meeting as "cordial," and said it had been an effort on his part to ensure fair hearings for all appellants.

But investigators concluded that "hearing officers could have interpreted the expectations communicated by the Governor on March 21 as pressure to be more sympathetic to employers."

In May, Leticia Sierra, a lawyer from the U.S. Department of Labor's Office of the Solicitor in Washington, interviewed unemployment appeals hearing officers at the Division of Administrative Hearings in Augusta as well as other state workers who attended the luncheon about allegations made in the Sun Journal'sApril 11 report.

Also visiting the Maine DOL were a workforce security chief from the U.S. Department of Labor and someone from the regional employment and training administration in Boston. They met with Bureau of Unemployment Compensation Director Laura Boyett and reviewed unemployment files at the bureau in response to Webbert's concerns.

Webbert, president of the Maine Employment Lawyers Association, had called on the federal agency to launch an investigation into the allegations, including reports that LePage had berated roughly eight hearing officers at the March 21 lunch at the Blaine House for finding too many cases in favor of jobless workers.

He called the written summary of the federal investigation "damning."

"I think it's written in a very professional manner and it's, I think, trying to be very respectful of the relationship between the United States government and the state of Maine. It's very polite," he said.

"But it's pretty damning criticism that it would be reasonable to perceive the governor's and his political appointees' activities as an attempt to unduly influence the hearing process in favor of employers. That's a pretty major finding," Webbert said.

The hearing officers are the first line of appeals for unemployed Mainers who have filed for unemployment benefits, but were denied. Business owners also can appeal to a hearing officer if they have challenged the state's decision to grant benefits to former workers.

The role of examiners at the Division of Administrative Hearings is mandated by the federal government. Examiners are paid with federal flow-through money and are required to follow federal guidelines during the hearing process. Their hearings are reviewed quarterly by state supervisors and by the U.S. Department of Labor, where they are scored and rated pass or fail for adherence to "due process."

Maine's examiners are rated above the national average, statistics show.

Decisions by hearing officers can be appealed to the Unemployment Compensation Commission, a panel of three political appointees. Appeals of those decisions go to Maine courts.

Members of a group commissioned by LePage that studied problems with the Maine unemployment claims and appeals process reported last month its recommendations aimed at improving the unemployment claims and appeals process, noting the state agency was severely understaffed and was hampered by poor communications.

But the governor's Unemployment Blue Ribbon Commission found "no direct or intentional bias against employees nor employers" after a review of roughly 360 cases filed over a nine-month period.

LePage had appointed the commission in the wake of allegations of pressuring administrative hearing officers lodged in the Sun Journal's investigative report.

The Commission was silent on those allegations, leaving that investigation to the U.S. Department of Labor.

LePage had told hearing officers at the Blaine House luncheon that he had been getting complaints that business owners hadn't received fair hearings, according to Sun Journal sources.

But a later Sun Journal analysis of those complaints found that more former workers than employers had complained to the governor's office about the unemployment claims and appeals process.

In fact, only 30 of the nearly 400 complaints stacked on LePage's desk since he took office in January 2011 came from business owners who took issue with the administrative appeals hearing process, the Sun Journal reported.

Thursday's summary letter makes several recommendations, including that LePage and his political appointees ensure that the unemployment compensation appeals process is "insulated from outside pressures that might compromise even the appearance of fairness and impartiality."

It also said the administration must ensure that hearing officers aren't intimidated and the administration must make clear that no personal action will be taken against hearing officers in this matter.

After the letter was released Thursday, Maine Senate Majority Leader Troy Jackson, D-Allagash, issued a statement that focused on the report's finding of wrongdoing by LePage and his administration.

"For three years we have heard story after story about the Governor's intimidation and bullying tactics. Today, the cat's out of the bag," he said. "Governor LePage and his political appointees will stoop to any level of intimidation to get what they want."

Maine House Minority Leader Ken Fredette, R-Newport, issued a statement that focused on Democrats and the report's findings of issues not associated with administration interference.

"Democrats are quick to politicize a report from the Obama Administration criticizing the governor for his hands-on approach to an unemployment appeals process that many have viewed as being too anti-business," Fredette's statement said. "The substance of this report is more interesting to me, however. It highlights issues that we know have been a problem in Maine's unemployment system for quite some time.

"I look forward to working with the LePage Administration and my Democratic colleagues to improve efficiency and reduce fraud in Maine's unemployment system with a new bill from the governor."

This story will be updated.

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U.S. Department of Labor investigation

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