Read the U.S. Department of Labor investigation report

An April 11, 2013, Sun Journal investigative report cited sources who said Gov. Paul LePage had summoned Labor Department employees to a mandatory luncheon at the Blaine House on March 21 and scolded them for finding too many unemployment-benefit appeals cases in favor of workers. They were told they were doing their jobs poorly, sources said. Afterward, they told the Sun Journal they felt abused, harassed and bullied by the governor.

A letter addressed to Maine Labor Commissioner Jeanne Paquette summarizing the U.S. Labor Department investigation, which was released Thursday, concluded that the administration acted with “what could be perceived as a bias toward employers” and hearing officers could have interpreted expectations that they had to be more sympathetic toward employers. 

The federal investigation concluded that the practice of excluding hearsay evidence at hearings may be unduly restrictive, and that “failure to consider all available evidence without weighing its probative value may lead to error.” Investigators also found some inconsistencies in Maine’s appeals process.

The governor’s office initially declined to comment on the report and referred all questions to the Maine Labor Department.

Late Thursday morning, LePage released a statement by email, noting that the U.S. Labor Department investigation confirmed legitimate concerns about the appeals hearings.

“It is also no surprise that the Obama Administration’s Department of Labor is speculating my administration somehow tried to influence the hearings process,” LePage wrote.

He added, “The issue has been politically motivated from the start, starting with Democratic activists in Maine and reaching all the way to the White House. The (U.S. Labor Department) review found no evidence of wrongdoing, but uses conjecture and supposition to come to a conclusion that has no basis in fact. The focus of my administration is to ensure the appeals process is fair and consistent for both Maine employees and employers.”

Paquette also released a statement late Thursday morning. She pointed out that the review noted inconsistencies in the way hearing officers have handled the admission of witnesses in hearings and other issues.

“Last year, both members of the Unemployment Insurance Commission and I raised concerns about the need for improvements and consistency in the way the unemployment system functions, especially the appeals process. Many of these concerns were echoed by complaints received by Gov. Paul LePage,” she said in the statement.

“The concerns that we discussed with the hearings officers last spring, related to the admission and weighting of hearsay testimony and business records, were not only supported by the findings of the Governor’s blue ribbon commission, but also are the same findings of the (U.S. Labor Department’s) independent review,” Paquette said. “My responsibility as commissioner is to ensure that the law is applied fairly and to manage the staff of the department.”

The commissioner did not comment specifically on the investigation’s finding that the LePage administration, which includes her, intervened when it shouldn’t have and that such intervention could be perceived as an attempt to influence hearing officers to “view employers more sympathetically.”

However, she noted that Maine law gives her and the appointed members of the Unemployment Insurance Commission authority over and responsibility for unemployment administration.

“As commissioner, my job is to ensure not only due process for both employers and employees, but also that the unemployment system is fair, efficient and responsive and follows the law,” she said in the statement.

Maine Labor Department spokeswoman Julie Rabinowitz added that the commissioner didn’t think she or the governor did anything wrong.

“She feels that she’s charged with managing the unemployment system, and if she sees there’s a problem she has a duty to raise it,” Rabinowitz said.

The federal investigation was launched in April by the U.S. Labor Department Office of the Solicitor General after employment lawyer David Webbert called on the federal agency to investigate allegations that LePage had pressured administrative hearing officers at the Maine Labor Department to be more pro-employer in its findings on appeals of unemployment claims. Reports also claimed LePage had berated roughly eight hearing officers at the March 21 lunch at the Blaine House for finding too many cases in favor of jobless workers.

Emails released under a Freedom of Access Act request echoed complaints made to the Sun Journal by the hearing officers who attended the meeting.

LePage denied the allegations, characterizing the meeting as “cordial.” He said it had been an effort on his part to ensure fair hearings for all appellants.

In May 2013, Leticia Sierra, a lawyer from the U.S. Labor Department Office of the Solicitor General in Washington, interviewed unemployment appeals hearing officers at the Division of Administrative Hearings in Augusta as well as other state workers who attended the luncheon about allegations made in the Sun Journal’s April 11 report.

A workforce security chief from the U.S. Labor Department and someone from the regional employment and training administration in Boston also visited the Maine Labor Department. They met with Bureau of Unemployment Compensation Director Laura Boyett and reviewed unemployment files at the bureau in response to Webbert’s concerns.

Webbert, president of the Maine Employment Lawyers Association, called Thursday’s written summary of the federal investigation “damning.”

The criticism would make it “reasonable to perceive the governor’s and his political appointees’ activities as an attempt to unduly influence the hearing process in favor of employers,” Webbert said. “That’s a pretty major finding.”

The hearing officers are the first line of appeals for unemployed Mainers who have filed for unemployment benefits and were denied. Business owners also can appeal to a hearing officer if they have challenged the state’s decision to grant benefits to former workers.

The role of examiners at the Division of Administrative Hearings is mandated by the federal government. Examiners are paid with federal flow-through money and are required to follow federal guidelines during the hearing process. Their hearings are reviewed quarterly by state supervisors and by the U.S. Labor Department, where they are scored and rated pass or fail for adherence to “due process.”

Maine’s examiners are rated above the national average, statistics show.

Decisions by hearing officers can be appealed to the Unemployment Compensation Commission, a panel of three political appointees. Appeals of those decisions go to Maine courts.

Members of a group commissioned by LePage that studied problems with the Maine unemployment claims and appeals process reported in December its recommendations for improving the unemployment claims and appeals process, noting the state agency was severely understaffed and was hampered by poor communications.

But the governor’s Unemployment Blue Ribbon Commission found “no direct or intentional bias against employees nor employers” after a review of roughly 360 cases filed over a nine-month period.

LePage had appointed the commission in the wake of allegations of pressuring administrative hearing officers lodged in the Sun Journal’s investigative report. The commission was silent on those allegations, leaving that investigation to the U.S. Labor Department.

LePage had told hearing officers at the Blaine House luncheon that he had been getting complaints that business owners hadn’t received fair hearings, according to Sun Journal sources.

But a later Sun Journal analysis of those complaints found that more former workers than employers had complained to the governor’s office about the unemployment claims and appeals process.

In fact, only 30 of the nearly 400 complaints stacked on LePage’s desk since he took office in January 2011 came from business owners who took issue with the administrative appeals hearing process, the Sun Journal reported.

Thursday’s summary letter makes several recommendations, including that Maine consider more generous evidentiary appeals practices, that stakeholders — including the Maine DOL and Maine Attorney General’s Office — resume negotiations to settle the evidentiary and practice issues, and that the Attorney General identify improvements in the appeals process so that there is greater consistency with state law and fairness and integrity within the program.

Attorney General Janet Mills said Thursday that her office would be happy to help implement any recommendations that involve it.

The U.S. Labor Department also recommended that LePage and his political appointees ensure that the unemployment compensation appeals process is “insulated from outside pressures that might compromise even the appearance of fairness and impartiality.”

It said the administration also must ensure that hearing officers aren’t intimidated and the administration must make clear that no personnel action will be taken against hearing officers in this matter.

After the letter was released Thursday, Maine Senate Majority Leader Troy Jackson, D-Allagash, issued a statement that focused on the report’s finding of interference by LePage and his administration.

“For three years, we have heard story after story about the governor’s intimidation and bullying tactics. Today, the cat’s out of the bag,” he said. “Gov. LePage and his political appointees will stoop to any level of intimidation to get what they want.”

Maine House Minority Leader Ken Fredette, R-Newport, issued a statement that focused on Democrats and the report’s findings of issues not associated with administration interference. 

“Democrats are quick to politicize a report from the Obama administration criticizing the governor for his hands-on approach to an unemployment appeals process that many have viewed as being too anti-business,” Fredette’s statement said. “The substance of this report is more interesting to me, however. It highlights issues that we know have been a problem in Maine’s unemployment system for quite some time.

“I look forward to working with the LePage administration and my Democratic colleagues to improve efficiency and reduce fraud in Maine’s unemployment system with a new bill from the governor.”

Paquette said the Maine DOL is implementing the blue ribbon commission’s December recommendations, including hiring more staff, increasing communication among the different parts of the system and “ensuring consistency in the application of the law — especially surrounding business records in the appeals process.”

In January, the department hired a new chief hearing officer for the Division of Administrative Appeals.

The department and the governor’s office also are working on an emergency bill this session that would take about $17 million from the Unemployment Trust Fund over several years to pay for additional staffing and technology improvements to the unemployment insurance and employment services programs. Rabinowitz said that money had been disbursed by the federal government to pay for improvements in unemployment systems and employment services programs and has been held within the trust fund for several years.

Rabinowitz could not say whether the department planned to implement the U.S. Labor Department’s recommendation that the administration ensure hearing officers aren’t intimidated and that no personnel action would be taken against them.

“There has been no personnel action taken,” she said. “I can’t speak to anything beyond that. This is where we talk about a balance. They are political appointees who are charged with managing the system and their duty is to ensure that the law is fairly carried out. And if they have a concern, they need to be able to raise that freely and not have charges of political interference. At the same time, they need to be watchful when there is true political interference.”

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U.S. Department of Labor investigation

Maine’s Democratic and independent gubernatorial candidates rebuked Republican Gov. Paul LePage for what the U.S. Department of Labor said Thursday was his intervention into the work of the state’s unemployment compensation hearing officers.

The department said such intervention by LePage and his political appointees could be perceived as an attempt to unduly influence the hearing process.

In a statement released Thursday afternoon, independent Eliot Cutler referenced a Sun Journal investigative report in which the state workers said they felt abused, harassed and bullied by the governor during a luncheon last March. Cutler called such behavior “unacceptable.”

“It’s also unacceptable that the administration appeared to try and cover it up by denying there was even (a U.S. Department of Labor) investigation,” Cutler said in the statement. “If the governor had concerns about how businesses were being treated, it should be reviewed, but not through intimidation tactics with people charged with looking at the situation in an unbiased fashion.”

Democrat Mike Michaud offered his opinion on Twitter.

“Both employers & employees should have confidence that the state is treating them fairly and following the rules,” Michaud tweeted.

He added: “LePage & his appointees’ actions were inappropriate & reinforce a disturbing pattern of mismanagement & intimidation.”

The Legislature’s Government Oversight Committee on Friday will discuss the U.S. Labor Department’s findings regarding the state’s unemployment compensation program.

The committee has been waiting for the department’s report summary since November.

“We’re excited to finally have this letter to actually talk about during our meeting,” said state Sen. Emily Cain, D-Orono, committee co-chairwoman.

The issue was first brought to the committee’s attention last year by Co-Chairman Chuck Kruger, D-Thomaston. He requested that the committee look into claims that Gov. Paul LePage had pressured unemployment compensation hearing officers to deny jobless benefits.

The committee decided to wait until both the Governor’s Unemployment Reform Blue Ribbon Commission and the U.S. Labor Department had issued their reports. 

“We didn’t want to duplicate efforts,” Cain said.

The Commission released its report in December. The Labor Department issued a letter to Maine Labor Department Commissioner Jeanne Paquette on Thursday in which it summarized its report.

The committee is expected to decide Friday whether it wants the Office of Program Evaluation and Government Accountability to look into the situation and answer additional questions.

The meeting will begin at 9 a.m. at the Cross Office Building in Augusta. The agenda also includes discussions on the committee’s Maine Center for Disease Control document-shredding probe and a request for OPEGA to review the state’s licensing and regulation of child care providers.

U.S. Labor Department recommendations:

* Maine should review state statutes, regulations and practices and consider some of the more generous evidentiary unemployment compensation appeals practices suggested in the Guide to Unemployment Insurance Benefit Appeals Principles and Procedures by the Employment and Training Administration of the U.S. Labor Department. The procedures Maine put in place in spring 2013 to receive additional documents are limited and not sufficient to cure what appears to be a longstanding prejudice against certain types of evidence. The state should institute a training regimen to assure consistency in the conduct of hearings and the preparation of decisions.

* Maine should establish uniform standards for inclusion of agency documents in the case file and determine the weight those documents should be given under evidentiary law.

* In 2012 and the early months of 2013, a group of officials with a stake in the state’s unemployment compensation program — including officials from the Maine Labor Department, the Unemployment Insurance Commission and the Maine Attorney General’s Office — had been engaged in good-faith negotiations to resolve the Division of Administrative Hearings’ practice issues. The U.S. Labor Department strongly encourages these officials to resume negotiations to settle the evidentiary and practice issues identified in this analysis.

* The U.S. Labor Department strongly encourages the Maine attorney general to identify, and the Maine Labor Department and Unemployment Insurance Commission to implement, improvements in the unemployment compensation appeals process to achieve greater consistency with state law and fairness and integrity within the program. Maine might, for example, consider establishing a precedent manual that identifies commission and state court decisions involving the interpretation of law. The Division of Administrative Hearings could use the precedent manual as a reference for future decisions.

* The governor and his political appointees must ensure the unemployment compensation appeals process is insulated from outside pressures that might compromise even the appearance of fairness and impartiality. The administration also must ensure hearing officers are free from actual or perceived intimidation. In particular, the administration must make clear no personnel action will be taken against hearing officers over this matter.

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