May 1, 2013

U.S. investigating accusations of LePage meddling

The governor is accused of pressuring federally funded unemployment hearing officers to rule in favor of business.

By Steve Mistler smistler@pressherald.com
State House Bureau

AUGUSTA — A lawyer representing the federal Department of Labor is in Maine to interview unemployment hearing officers and others who attended a controversial lunch meeting six weeks ago with Gov. Paul LePage.

click image to enlarge

Gov. Paul LePage

Gabe Souza / Staff Photographer

The lawyer, Leticia Sierra, planned to conduct interviews Wednesday and Thursday with the approximately 13 people who attended the March 21 gathering at the Blaine House, said Julie Rabinowitz, a spokeswoman for the Maine Department of Labor.

The arrival of Sierra adds a new layer to the unfolding controversy over a meeting in which LePage and Jennifer Duddy, the governor's lone appointee to the state's Unemployment Compensation Commission, allegedly scolded unemployment hearing officers and pressured them to make more pro-business rulings in appeals decisions that determine whether workers receive benefits.

The decision to send a representative to Augusta suggests that the federal government may have concerns about the adjudication of unemployment hearings in the wake of the controversy, according to a national labor law expert.

It also suggests that recent visits by federal auditors, and a subsequent telephone call between LePage and Seth Harris, acting secretary of the U.S. Department of Labor, may not have been as routine as the administration originally stated.

The Department of Labor's legal arm, or Office of the Solicitor, acts as an enforcement and dispute resolution agency. Its attorneys also prosecute court cases in which the Department of Labor sues a state or company over workplace violations and retribution against whistleblowers.

Although complaints about unemployment hearing appeals are common among businesses and employees, this dispute and the response by the federal government appear to be without precedent.

A national labor law expert and the president of the National Association of Unemployment Appeals Professionals, the organization that promotes ethics and best practices for hearing officers, both told the Portland Press Herald on Wednesday that they could not recall a similar instance in which a governor or a top political appointee had discussed impartial appeals decisions with quasi-judicial staff.

"I've never heard of a situation like this happening before in any other state," said Craig Gustafson, president of the national appeals professional organization.

The hearing officers are quasi-judicial staff funded by the federal government for the purpose of adjudicating unemployment appeals. At issue is whether the mandatory meeting with LePage impedes the fair hearing process.

The LePage administration has claimed no wrongdoing, saying the lunch meeting was designed as an educational session between the governor and labor staff.

Emails obtained by the Press Herald through the Freedom of Access Act show that several attendees felt pressured by the governor to change the way they adjudicate appeals. A state employee who adjudicates unemployment benefit hearings described the meeting as a "group scolding" and lamented the current "dark times" for keeping political pressure out of the adjudication process.

Linda Rogers-Tomer, a hearing officer supervisor, later wrote in a post-meeting note that she felt that 20 years of "jurisprudence was going out the window."

The controversy prompted attorney David Webbert to request a federal investigation. Webbert, president of the Maine Employment Lawyers Association, a group of about 50 lawyers who represent employees in unemployment disputes, said the episode could violate federal laws governing the fair hearing process.

Federal auditors were in Maine two weeks ago to review unemployment files at the state Department of Labor. Webbert claimed that the visit stemmed from his request for an investigation.

The LePage administration said the visit was routine and has since vowed to work with federal auditors.

LePage has remained defiant amid the controversy, accusing Webbert of lying about it and daring the hearing officers to come forward.

On April 17, the governor announced a forthcoming executive order to establish a blue ribbon commission to review the entire unemployment system. The executive order has not yet been issued, although LePage has announced two appointees to the panel.

Requests for comment on Wednesday went unanswered by the administration and spokespeople for the Department of Labor's lawyers.

Information about the controversy has slowed to a trickle since federal auditors arrived in Maine two weeks ago, leaving many questions about the process and potential penalties should the solicitor discover wrongdoing.

Webbert said federal investigators were proceeding cautiously for a reason.

"I don't think there's a precedent for this type of activity, so I don't think the federal government is used to responding to it," Webbert said. "I think it's that serious."

Rick McHugh, a national labor law expert and attorney for the National Employment Law Project in Ann Arbor, Mich., said Wednesday that questions about the unemployment appeals process are typically handled by the federal Labor Department's Employment and Training Administration division, which audits unemployment claims.

"I've never seen a situation where the solicitor's office did the investigation directly with the state officials," said McHugh, who said he has 30 years of labor law experience. "My sense is that because this involves a legal concept -- the concept of a fair hearing -- and an impartial tribunal, that they're being very careful."

He added, "To have the governor personally involved like he was in this meeting, regardless of whether it was friendly banter or outright pressure, that's unprecedented in my knowledge. Having the governor involved in this kind of thing and having the solicitor involved are both unprecedented in my experience."

It's not completely clear what action the federal government would take should it discover that the administration has interfered with the hearing process. McHugh said a violation could result in the federal government withholding administrative funding for the program. However, he said, that rarely happens because such a move effectively punishes employers and benefit recipients.

Instead, he said, the federal government could impose an administrative ruling designed to prevent further interference with the hearings process.

Gustafson, president of the National Association of Unemployment Appeals Professionals, said his organization had been following the controversy. He said he hadn't witnessed anything like it.

Gustafson said businesses and workers both frequently complain that hearing appeals are biased in favor of one side or the other. However, he said, complaints generally lead to legislation to change the law, not meetings involving a governor or his political appointees.

A memo obtained by the Press Herald suggests the LePage administration may propose legislation to change the law. However, no proposal has been made.

Unemployment appeals are a constant source of frustration for businesses, which pay taxes to fund benefits. Additionally, the number of unemployment claims affect a business' experience rating, which determines how much it pays into the unemployment trust fund. The higher the rating, the more money a business pays.

LePage has said he has received complaints from "hundreds" of businesses about the appeals process.

The Press Herald has asked to review complaints that have been submitted in writing. The administration has said that it will respond to the request early next week.

Steve Mistler can be contacted at 620-7016 or at:

smistler@pressherald.com

twitter.com/stevemistler

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