Most KY state workers who gamed the system to collect jobless benefits were not fired [Lexington Herald-Leader]

Oct. 6—Of at least 19 Kentucky state workers who participated in a scheme to improperly collect state and federal unemployment benefits during the spring of 2020, none were prosecuted while one was fired and eight were briefly suspended and then returned to their jobs, according to a review of public records.

Last April, Gov. Andy Beshear said the workers would be punished for their roles in a scheme to claim $54,232 in jobless benefits while still holding full-time state jobs. Some lied about lost part-time jobs in order to seem eligible; some used their official access to the state jobless benefits system to facilitate claims for themselves, colleagues and friends.

The majority worked at the Office of Unemployment Insurance or the Unemployment Insurance Commission, where they were assigned to help process Kentuckians' crush of pandemic-related jobless claims.

After the Herald-Leader reported on the scheme, disclosing a state inspector general's report that was sent to Beshear in February, the governor said the unnamed group of state workers could face penalties up to firing and prosecution.

"Significant action has been taken, including termination of some of those individuals depending on the culpability of them and the level of their actions," Beshear told reporters at an April 15 news conference. "It was people taking advantage of their positions, and it's not OK."

Six months later, state personnel records identify eight employees who were suspended in February and March as a result of the inspector general's investigation. They are Sherry L. Smither and Regina G. Woolbright, suspended one day; Jamie Keith, Ashley B. McGregor and Anthony "Tony" L. Page, suspended three days; and Jana Glover, LaQuita McGill, and Renea A. Houston, suspended five days.

The state later fired Page, on June 2, for issues unrelated to the investigation, including improper use of his state vehicle, speeding up to 91 mph in his state vehicle, filing false time sheets and having inappropriate materials on his state computer, according to his personnel file. Page worked in the Unemployment Insurance Integrity Branch.

Two employees were terminated from the Office of Unemployment Insurance in February, around the time of the investigation, but state personnel records don't give a reason. On Wednesday, Labor Cabinet spokeswoman Holly Neal confirmed that one employee was terminated as a result of the investigation.

Adam Swiggett, a workforce development ops administrator who departed the Office of Unemployment Insurance in July for reasons unrelated to the investigation, said he and his colleagues were puzzled why roughly half of those who got caught did not appear to be punished.

"Not everybody who was a part of that was sanctioned, and in fact, some of the people who did get sanctioned have been thinking of filing a grievance because of that," Swiggett said this week. "They sort of picked and chose who they were going to suspend or terminate. I believe it was politics and favoritism."

Neal said appropriate penalties were levied once state officials could determine who did what. Anybody who improperly collected jobless benefits was required to repay them, Neal said.

"Disciplinary action was taken in accordance with state personnel laws, including termination, multi-day suspensions and reprimands. The administration also referred the matter to the Executive Branch Ethics Commission and all appropriate agencies for further review," Neal said in a prepared statement.

"The level of action was subject to the limitations of state law passed by the General Assembly," Neal added.

As of this week, the ethics commission had taken no public action against any of the employees.

Franklin Commonwealth's Attorney Larry Cleveland said he reviewed the inspector general's report for possible prosecution of the state workers on theft or false claims charges.

Ultimately, Cleveland said, he decided not to pursue it. The sums involved were relatively small — sometimes less than $1,000 — and after the state started to rush out jobless benefits in the pandemic's early days, Beshear made it clear that his administration would not try to collect over-payments that were mistakenly issued, he said.

"It was just one big screw-up," Cleveland said.

"And then the governor came in and said 'You're not going to have to pay the money back,'" Cleveland said. "So then I'm thinking, 'Well, so what am I doing here? Is this really worth my time when I've got murder and robbery cases?'"

"There were a few of them where clearly the people knew what they were doing. It was clearly fraud," Cleveland said. "But given the sums in question and the fact that the governor wasn't pursuing it, I just couldn't consider it the best use of my time to prosecute them."

In April and May of 2020, state workers who had not lost their full-time government jobs filed for jobless benefits based on the alleged loss of part-time jobs that sometimes did not exist and other times did exist but were never lost, Inspector General Maryellen Mynear wrote in her Feb. 19 report for the governor's office.

For example, a female state employee claimed she lost her part-time job as a choir assistant at her church. But the church, in fact, received a federal Paycheck Protection Program loan and kept everyone on its payroll. And a male state employee claimed he lost his part-time gig as a basketball coach. But in truth, his league's basketball season ended before the pandemic struck, and he already had received his stipend for the year.

Also, the state workers typically collected unemployment benefits based on their full-time government salaries, which they still were being paid, and not on the smaller part-time wages they claimed to have lost, Mynear wrote.

They were assisted by the Beshear Administration's decision to adopt the "auto-pay" model, so that benefits were automatically paid for the first two weeks without the usual effort being made to determine eligibility, she wrote.

"Individual and seemingly small decisions made in early March 2020, in a well-intentioned attempt to expedite benefits for Kentuckians, combined to weaken checks and balances intended to ensure claimant eligibility and benefit accuracy," Mynear wrote.

"Certain experienced OUI employees appear to have exploited known or perceived loopholes within the pandemic unemployment claims process to obtain monetary benefits for part-time jobs, while still fully employed in and compensated for their state jobs," she wrote.

In an April 17, 2020, online chat inside the Integrity Branch of the Office of Unemployment Insurance, two state employees complained about their comparatively low state wages and observed how even Kentuckians who lost a part-time job could file for unemployment benefits during the pandemic.

"WTF ... F THIS JOB," one wrote.

"Exactly," a co-worker responded. "Filing now ... lmao."

"(expletive) WHY NOT FILE," the first wrote back. Both of them then filed for benefits using false information about part-time jobs, according to the report.

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