Michigan House lawmaker announces investigation into unemployment agency

Beth LeBlanc
The Detroit News

House Oversight Chairman Steve Johnson announced Wednesday that he would launch an in-depth investigation into the Unemployment Insurance Agency, after more than a year of delays, fraudulent claims and requests that claimants return money mistakenly paid to them. 

Johnson, R-Wayland, said the interests of accountability demanded legislative hearings and an investigation. 

The announcement comes weeks after the agency sent letters to 648,100 pandemic unemployment assistance claimants to inform them that they would have to submit a new self-attestation because of state-developed qualifications that were later rejected by the U.S. Department of Labor. If they are unable to meet federal qualifications, the state may require claimants to pay back money. 

The 648,100 individuals represent about 19% of the people who received unemployment benefits during the pandemic. 

"The UIA is a disaster and there needs to be leadership changes now,” Johnson said in a statement. “How about before asking people to pay funds back due to the state’s mistake, they ask former director Steve Gray to pay back his $86,000 hush fund payment.”

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.

Gray, the former director for the agency, resigned in November and received an $85,872 separation agreement that required he and the state "maintain confidentiality" regarding his employment and his departure.

The House Oversight hearings, Johnson said, will include testimony on "the pattern of mismanagement, incompetence, and outright fraud" at the agency. 

The Unemployment Insurance Agency did not immediately return an email seeking comment. 

But in a Wednesday press release, the agency's acting director, Liza Estlund Olson, said the agency was "doing everything we can to help working families navigate" the issue affecting about 648,100 claimants.

"Claimants who were notified that they must requalify for PUA should quickly submit their updated information so that we can redetermine their eligibility and continue to provide benefits to workers whose jobs were affected by COVID-19,” Estlund Olson said. “The agency will evaluate each requalification on a case-by-case basis, and we are currently reviewing a waiver process.”