Golden Fleece Award

WASHINGTON, DC – Rep. French Hill (AR-02) named the Department of Labor (DOL) the latest recipient of his Golden Fleece Award for the agency’s lack of proper oversight regarding fraudulent unemployment insurance payments made during the COVID-19 pandemic.

“While millions across the nation suffered economic hardship because of the COVID-19 pandemic, cheats siphoned off some $163 billion – or 19% of payments -- from the federal government’s effort to help those in need,” said Rep. Hill. “For their complete lack of oversight and lackluster response, I have awarded DOL this month’s Golden Fleece award.”

In the letter to Secretary Martin J. Walsh, Rep Hill writes:

 I write to you today to inform you that the Department of Labor (DOL) is the latest recipient of my Golden Fleece award for its lack of oversight of the improper unemployment insurance payments made during the COVID-19 pandemic. 

It is clear that fraud has risen during the COVID-19 pandemic and that warrants a robust government response. During the March 17, 2022, Senate Committee on Homeland Security and Governmental Affairs hearing, DOL Inspector General Larry Turner said, “at least $163 billion in pandemic UI benefits could have been paid improperly, with a significant portion attributable to fraud”  and “the improper payment rate for pandemic UI programs is likely higher than 18.71 percent.”  That is unacceptable, and the government needs proper tools to respond to the rampant fraud that has occurred.

According to the White House Updated Data on Improper Payments , nearly 19% of unemployment insurance payments were improper payments in the federal-state UI program. Also, we do not have clear data from the entire COVID-19 pandemic because “data was not collected during the middle of 2020 as a result of the chaotic challenges state-run UI systems faced.”  Clearly, DOL failed to provide proper oversight of federal monies.

It is an indisputable fact that improper unemployment payments rose between fiscal year 2020 and fiscal year 2021.  I understand that states may have lacked the ability to properly vet unemployment insurance recipients, however it was irresponsible for the DOL to provide states with blanket waivers to forgo the most robust recovery possible of improper unemployment insurance payments.

On February 7, 2022, the Department of Labor released the Employment and Training Administration (ETA) issued Unemployment Insurance Program Letter (UIPL) No. 21-21, Change 1. The ETA states, “If an individual has a non-fault overpayment and does not fit within one of the approved blanket waiver scenarios, the state must address their eligibility for a waiver individually.”  The documentation of eligibility is one of seven loopholes that a state may apply a blanket waiver to forgo the recovery of overpayments in pandemic unemployment programs.  Those blanket waivers are particularly irresponsible because the Government Accountability Office estimated that $87.3 billion in CARES Act unemployment insurance funds could have been paid improperly, however, Inspector General Larry Turner then later corrected that number to at least $163 billion. That is about 19% of all CARES Act unemployment insurance funds because the government spent more than $872 billion on unemployment insurance payments over the course of the COVID-19 pandemic.

It is critical that the DOL uses its federal funding for its appropriate purposes and conducts proper oversight of the Federal-state UI program. Should you require any additional authority from Congress to address these concerns, I urge you to notify me as soon as possible. I sincerely thank you for your consideration and look forward to working with you to address this important issue. 

              Sincerely,

              French Hill

              Member of Congress