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

(Continued from page 1)

click image to enlarge

Gov. Paul LePage

Gabe Souza / Staff Photographer

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:



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