Michigan GOP leader pushes for task force on unemployment problems

Beth LeBlanc
The Detroit News

A Republican House lawmaker wants to launch a task force to address problems at the state's Unemployment Insurance Agency, which has been overwhelmed by an unprecedented number of legitimate and fraudulent unemployment claims. 

Rep. Steve Johnson, R-Wayland, said he is pushing for a task force to work out the issues at the agency at the end of more than an hour of testimony from Unemployment Insurance Agency Director Liza Estlund Olson, who replaced former Director Steve Gray when he resigned in November. 

Signage on the door of the closed Unemployment Insurance Agency Detroit Problem Resolution office in the Cadillac Place building in Detroit on Feb. 11, 2021.

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The agency has processed more than 4.6 million claims since the beginning of the pandemic — nearly 22 times the group's average annual workload — and doled out more than $30 billion in jobless aid to more than 2.3 million claimants, Estlund Olson told lawmakers. 

The agency's biggest work load currently involves identity verifications and a "queue of complex claims under managerial review," she said.

Thousands of Michigan unemployment claims were subject to weeks- and months-long delays as the agency struggled to manage the huge workload while dealing with an onslaught of fraudulent claims. Early in the pandemic, the agency loosened security protocols to process claims more quickly, exacerbating fraud issues. 

Lawmakers grilled Estlund Olson about continued delays with unemployment claim processing, fraud and overpayment notices, tallies of fraudulent claims and the need for the continued closure of in-person offices. 

Lawmakers criticized the director for what they saw as a lack of communication with Gov. Gretchen Whitmer after Estlund Olson said she hadn't talked to the governor in a month. On Tuesday, Whitmer vetoed $150 million that would go into the unemployment compensation fund, apparently, without consulting with the director of the unemployment agency, Johnson said. 

"This is the most problematic issue we've seen, and the top executive isn't talking to the top director of this agency?" Johnson said. "That just baffles my mind. They should be, at a minimum, in weekly conversation."

But Estlund Olson pushed back, noting she was placed in her position because Whitmer was confident she could work to resolve the issues facing the UIA.

"I’m the director of the agency," she said. "She hired me to do the job of managing the agency, and that’s what I’m doing.”

Estlund Olson offered examples of some of the sophisticated schemes the agency has had to sort through in determining fraud, including forged passports, multiple claims for one address and a fraudulent Michigan driver's license for man named "Husayn" who bore a photo-shopped image of "The Office" actor John Krasinski.

Because of an ongoing investigation into the losses, Estlund Olson wouldn't give a precise tally of fraudulent claims other than to repeat earlier estimates that it was in the "hundreds of millions of dollars." A report last year, indicated the losses could be as high as $1.5 billion.

Still, lawmakers pushed for an answer. 

"That's I think a relevant question for the public," said Rep. David LaGrand, D-Grand Rapids. "...I would love it if you would give us at least a monthly report as to your current best estimate ..., so this committee can be apprised of that number as you move forward."

Signage on the door of the closed Unemployment Insurance Agency Detroit Problem Resolution office in the Cadillac Place building in Detroit on Feb. 11, 2021.

About the agency's still-shuttered offices, Estlund Olson said many unemployment agency employees still aren't vaccinated and are able to resolve more claims remotely than they could at the agency's 12 offices. 

LaGrand urged the agency to ask Whitmer to prioritize vaccines for unemployment agency employees so they could return to in-person meetings. Johnson agreed on the need for face-to-face interaction. 

"We have heard countless constituents ask if they could just meet with someone at the agency, then their claim could be resolved," Johnson said.