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'This is not an easy job': Jobless agency director defends performance

Beth LeBlanc
The Detroit News

Lansing — Acting Director Liza Estlund Olson defended the work of the Michigan Unemployment Insurance Agency during a Thursday House Oversight Committee hearing in which she was accused of not taking responsibility for issues at the beleaguered agency. 

The agency had to make hundreds of changes over the last 18 months amid new federal pandemic programs and changing executive orders, making it difficult to process record claims and defend against record attempts at fraud, Estlund Olson said.

Lisa Estlund Olson is acting director of the Michigan Unemployment Insurance Agency.

"I absolutely take responsibility for what I have done since I entered this agency," Estlund Olson said. "We have had to make decisions on what are priorities to get money out the door."

"...For those calling for my removal, this is not an easy job," she said. "If it were, the previous administration had eight years and seven UI directors who could have made changes a long time ago."

But House Oversight Chairman Steve Johnson, R-Wayland, criticized Estlund Olson's decision to blame the federal government, a lack of funding or past administrations. 

"When I look for a leader, the leader takes responsibility," Johnson said. "They don’t just blame other people.”

Estlund Olson took over leadership of the agency in November after the former director, Steve Gray, resigned with a more than $85,000 settlement deal that required him to "maintain confidentiality" about his departure. 

The unemployment agency has been overwhelmed by challenges since March 2020, when people forced out of jobs because of the pandemic led to record high unemployment claims. The claims came as the agency sought to implement new federal pandemic programs and as fraudsters led persistent attacks on the agency's systems. 

With some claimants waiting months for any kind of payment, Gray temporarily dismantled some of the agency's security systems to get claims through more quickly in the early months of the pandemic. Those changes opened a doorway for fraudsters to access the system. 

More than three dozen people have been charged in state and federal investigations into the fraud. The agency has estimated the issue resulted in "hundreds of millions" in improperly paid benefits. 

Estlund Olson said Thursday the agency has stopped at least 500,000 fraudulent attempts for jobless aid.

In January, the federal government met with UIA officials to notify them that they'd formulated illegitimate reasons for qualifying to some federal unemployment benefits. The federal monitors formally told the agency in February that they'd need to rectify the issue, but the agency waited until June to notify recipients. 

The June mailing included 648,100 letters to recipients to notify them that they would need to re-attest to their eligibility for the benefits they'd already received and, if deemed ineligible, pay those benefits back. Another 42,092 letters were sent to recipients who had been denied benefits under the old qualifying reasons and might now be eligible.

Estlund Olson said the agency has distributed 263,927 waivers to individuals who were deemed ineligible under the new federal qualifications. The last roughly 100,000 will likely go out next week, she said. 

Any of those automatic waivers can be rescinded if it is later determined the individual misrepresented themselves or submitted otherwise fraudulent claims. 

Other people who were later deemed ineligible and asked to repay their benefits for other reasons — such as receiving federal jobless aid while working part-time — have the option of filling out a hardship waiver.

Lawmakers grilled Estlund Olson about the agency's failure to notify the Legislature before sending the roughly 690,000 requalification letters. The agency knew as early as Jan. 6 that the federal government had deemed its reasons ineligible but didn't send letters to recipients needing to requalify until late June. 

The department has failed on customer service and clear communication with residents, said Rep. Jack O'Malley, R-Lake Ann. 

"I get the fact that the federal government threw you some curve balls. I get that," O'Malley said. "And I get that the canoe was taking on water through all of this. I get that. It was happening to all of us. But sometimes it’s a good idea to just reach out and say, 'Hey, Mr. Speaker, Mr. Majority Leader, Mr. Chair, here’s what’s going on.'”

But Rep. Julie Brixie, D-Meridian Township, defended the department, noting some of the problems with the unemployment software preceded the pandemic and that the Legislature has failed to fulfill the agency's request for additional employees. 

"We're asking what can be done and yet we haven't provided the 500 additional employees for the unemployment," Brixie said.

Johnson said after the meeting that he believed the UIA can resolve the issues in the department with existing resources, just as the Secretary of State's office did earlier in the year. 

"When you have a bureaucracy that's having issues, they say we just need more money," Johnson said. "We don't believe that's the case. We just believe they need better leadership over there."