Indiana's $2 billion unemployment mess

INDIANAPOLIS (WISH) - Inefficient. Poorly managed. Sloppy. These strong words are being used to describe the agency that pays Indiana's unemployed. Whistleblowers came exclusively to I-Team 8 to expose this story years in the making.

One of those whistleblowers is a former DWD employee who we'll call Ken. He knows the Department of Workforce Development well. He worked there as one of the people who decides whether you're eligible for unemployment. When asked whether the unemployed can be assured their cases will be decided fairly and accurately he answered, "I would not have faith, no. And I don't think a lot of people do."

Ken doesn't want us to identify him for fear of state retaliation. But another former DWD worker, Andrew Gray, shared his story openly.

"It's a poorly run department," said Gray.

The state's unemployment rate skyrocketed from 4.7 percent in January of 2008 to a record high 10.9 percent just a year and a half later. As unemployment reached its peak, internal e-mails obtained by I-Team 8 detail how the Department of Workforce Development - drowning in claims, calls and appeals - may have resorted to questionable tactics that contributed to a $2 billion debt.

He points to an October 2009 e-mail from Ronnie Miller, then the Unemployment Insurance Director of Benefits and Appeals. In it, Miller told DWD employees to get the number of appeals to a "more manageable number" that week. He instructed them to "correct every case based on information provided by the claimant, fix what they say is wrong." He goes on to say, "I understand that this might create some error on these cases, and we are willing to accept that in exchange for getting the case count reduced."

When asked whether he believed some unemployed claimants were paid who shouldn't have been and vice versa, Ken replied, "Oh, I can guarantee that, yeah."

I-Team 8 uncovered memos even more disturbing. An e-mail with DELETE DOCUMENT WORK in the subject line tells employees to delete documents older than 150 days. It went to DWD workers who deal with reports from the public about problems, errors and fraud in the system.

"Remove from your inbox," the e-mail reads. "You do not need to do anything else with them." That means hundreds of people who wrote DWD about problems and waited for a response are likely still waiting. No one ever read your letter or e-mail. It was likely deleted.

(After discussions between our attorney and theirs... it appears the use of the subject line DELETE DOCUMENT WORK was not part of the original email sent from a DWD manager to employees. Our sources who provided us the emails acknowledge they hadn't made that clear during our meetings with them.

The email in the story was not sent from Ronald Milller as was implied by our graphic but was sent by a different employee although the manager indicates Ron asked her to send the email.

However, the email in question leaves no doubt that DWD employees were told to remove documents from their inboxes.

Our sources believed that meant the documents were deleted. DWD's lawyer now says the documents were not actually deleted but instead marked "complete" and removed from their inboxes.

We still want to know: Did any DWD employee respond to the complaints, mistakes, or fraud reports in those documents? No one from the agency has answered that question.

Other questions that still have not been answered. Why did Ron Miller, then Director of Appeals. tell employees to simply decide disputed issues for the claimant even after acknowledging in this internal email that it would create some error? Was this a frequent practice at DWD?

And we're still waiting to talk to the DWD Commissioner. We've requested an interview seven times in three months.)

"He wanted the number down so he sent an e-mail out department-wide to delete 50 a day," said Gray.

For reducing the caseload, Ronnie Miller was honored by the governor with the prestigious public service achievement award. Miller, who now works in the private sector as an attorney specializing in ethics, refused our request for an interview.

Workers allege it wasn't quality, but quantity and quotas that mattered.
Ken says there was a motto in the department that decided whether unemployed Hoosiers are eligible for unemployment.

"Read it and write it, or read and write for short," said Ken.

This document obtained by I-Team 8 outlines this worker's weekly quota in fall 2008 - 112 cases - that means workers had to resolve three cases an hour. Each case, often several pages long, with regulations that require phone calls to verify conflicting information. Ken calls it an impossible task.

"You take the employer and what they have. You take the claimant and what they have, and you make a decision. The federal government has very specific guidelines that say you are not to do that," said Ken.

But he claims he was forced to do it to maintain his quota. The trust fund that pays Indiana's unemployed went broke in 2008. Indiana has been