Documents Reveal Potential Widespread Fraud At Department Of Labor

Documents reveal potential widespread fraud at Department of Labor

By Todd Shepherd
Independence Investigates, August 5, 2010

Independence Investigates has obtained internal emails from the Colorado Department of Labor and Employment (CDLE) showing that a software control intended to prevent the payment of unemployment insurance to unqualified citizens as well as to illegal aliens was shut off in early 2009.

The emails dictate that former CDLE unemployment insurance director Mike Cullen demanded Work Order 51662 be given top priority within the department. Completion of the work order would mean various questions asked of someone filing for unemployment regarding citizenship would effectively be ignored by a computer system.

The documents also show that several individuals within the department immediately raised the issue that the work order might be circumventing the law, specifically House Bill 06-1023. HB 1023 was passed in a special session of the legislature in 2006, and mandated that certain government benefits, such as unemployment insurance, be denied to illegal aliens.

In one email, an IT technician says, This seems to be a super fast slam dunk. Do we need anything in writing from [unemployment insurance director] Mike Cullen as this seems to be a violation of the law (HB-1023)?

Another email from a different IT technician predicted media fallout, saying, this aint all so hard to do, BUT we will effectively disabling the legislatures HB-1023 which is now state law. When Channel 4 news finds out, lots of people will be pointing finders [sic] and saying, it wasnt me.

An email from a business analyst attempts to assert a rationale for the work order saying, The reason: Currently, we have several admins who are doing nothing else but keying in the returned UIB-1 information in order to ensure that people get paid. With our heavy workload, the Business needs to reassign these people to other tasks. The same email also says that HB 1023 will be enforced again, eventually. However, no specific target date was given for the reinstatement of enforcement of HB 1023.

The CDLE told Independence Investigates that the execution of the work order did not violate HB-1023. Spokeswoman Cher Haavind said in an email:

The Unemployment Insurance Program accessed the Colorado Department of Motor Vehicles database to verify that the randomly selected claimants possessed a valid license or identification number. Because various circumstances may identify a license or identification number as invalidsuch as a suspended or revoked licenseand the Colorado Department of Motor Vehicle is not willing to provide additional information on their inquiry screen, unemployment insurance benefit payments were not denied if numbers cannot be validated through the Colorado Department of Motor Vehicle.

There are several reasons the cross match system identification process was not effective in identifying illegal aliens including maiden/married name changes and expired drivers licenses. It did nothing to address the concerns set forth in HB 06S-1023, but rather delayed benefits to thousands of eligible unemployment insurance recipients.

Haavind went on to say that prior to the passage and implementation of HB-1023, the Unemployment Insurance program had existing measures in place to verify legal citizenship.

State Senator Shawn Mitchell, R-Broomfield, was shown both the email chain, and the response from CDLE. Mitchell said, This is gravely concerning. These messages show clear intent to evade the law and to overrule any employee concerns. The Departments explanation sounds like a dodge, like its a hassle to follow the law, so they ignored it. This situation demands an audit more powerfully than anything else Ive seen in state government. Its important to hold accountable the people who designed or carried out this illegal policy. Since the effect of the policy was to force approvals, probably of many illegal benefit claims, its a reasonable suspicion it came from the top.

Mr. Cullen was reached by phone, but requested that all comments come from CDLE. Mr. Cullen resigned from CDLE months after this directive was issued, and now works for On Point Technologies, a software firm that specializes in, among other things, preventing fraud for unemployment insurance. According to the states online spending database, On Point Technologies has had software contracts with the state in at least 2009 and 2010. (Because the database is a new project, information only dates back to 2009.)

(Notes: HB-1023 is properly known as HB-06S-1023, the S denoting that the bill was passed in a special session of the General Assembly. Also, in the emails, there are general references to the business. This is an expression used in the CDLE and means the unemployment insurance division.)