Snyder’s other huge atrocity 

click to enlarge shutterstock_71252071.jpg

Shutterstock

Well, I hope you had a great Christmas, or Hanukkah, or that the wind was with you when you burned that sacrifice to Baal.

But there are thousands and thousands of Michigan citizens whose holidays may not have been as grand. Their lives were horribly damaged, even ruined, by our accountant governor's spreadsheet philosophy of treating human beings like widgets.

Incredibly, few still know much about the more than 37,000 people falsely accused of unemployment insurance fraud by the state — people who often lost their homes, went through bankruptcies, lost marriages and education, and suffered horrible distress.

"I think it hasn't gotten the attention it deserves because it is a very complicated issue," Jennifer Lord tells me. She's an employment law attorney with Pitt McGehee in Royal Oak, and has worked thousands of hours representing the victims — so far, without getting paid. "Flint was easier for the public to understand," she says.

Everybody knows what happened in Flint, of course; to Snyder's emergency managers, water from the Flint River was good enough for those poor black folks who had lost the right to govern themselves anyhow, and besides, it saved the state a little money to disconnect from Detroit. They saved a little more by not putting anti-corrosion chemicals in the water.

But not in the long run, as we now know. The lead poisoning scandal that followed could cost taxpayers billions, and has helped make Michigan's wretched government famous worldwide; I was asked about it by a tour guide at the ruins of Pompeii last spring.

But far fewer know about the human tragedy caused by our unemployment insurance disaster. Flashback four years, when Michigan's Unemployment Insurance Agency proudly unveiled its new $47 million "MiDAS" computer — the Michigan Integrated Data Automated System. From now on, they said, it would take over and track down any cases of fraud.

Buying the computer enabled the Snyder administration to lay off about 400 full and part-time agents statewide who used to check applications for fraud and other discrepancies. MiDAS would be better! Cheaper! Faster and more efficient! Bye-bye, human error!

MiDAS would track down anyone guilty of trying to cheat the state and bring them to justice. And in Michigan, justice has been harsh indeed for anyone judged to have committed unemployment insurance fraud. You have to pay back four times the amount you wrongly got, plus penalties and interest at 12 percent.

Suddenly, MiDAS was turning up vast numbers of fraudulent claimants and bringing them to justice. Tens of thousands of people were suddenly told they owed thousands to the state.

"They didn't know what to do. They felt helpless," Lord says. "The unemployment agency has advisers you can talk to, but only if you haven't been accused of wrongdoing."

Frightened people who didn't have much money to begin with agreed to payment plans that in some cases resulted in their losing their homes. The state garnished wages, seized income tax refunds.

MiDAS looked at cases as far back as 2007. It tracked down people who had left the state to put the bite on them and garnish their wages wherever. It was a highly efficient system with only one major flaw: The vast majority of people who were accused, who had their lives disrupted and shamed by Big Brother, were totally innocent.

In Greek mythology, Midas was a king whose dream was to turn everything he touched to gold. MiDAS the computer turned lives into hell. Rather than catching real wrongdoing, it flagged any discrepancy and declared it an intentional act of fraud.

Those accused were assumed to be automatically guilty. Many were relatively poor people without a lot of money or connections and who didn't know how to fight the system, but some finally got lawyers.

Jennifer Lord was one. "Unemployment insurance fraud is fairly rare. Most studies put it at 4 to 6 percent," she said. "It's also pretty small stuff. People don't stop collecting unemployment till a week after they go back to work — that sort of thing."

Suddenly, thousands and thousands of people were being accused of fraud. It isn't quite clear when it began to dawn on the state that MiDAS was running amok, but finally, they began to check.

Last year, they admitted that 93 percent of the cases that had been flagged as fraudulent by MiDAS really weren't. Tens of thousands of entirely innocent people had been ruined and had their money confiscated by the state.

"This may not look like Flint, but it does have something in common with it," Lord tells me. "This is another case of governing by spreadsheet, of treating people as statistics."

Just as in Flint, Snyder — who has never shown any sign of caring about average people who lose their jobs — found it nearly impossible to fire his guilty aides. Sharon Moffett-Massey, the director of the Unemployment Insurance Agency, wasn't even fired, but merely "reassigned to special projects," evidently meaning she is still getting paid but doesn't have to do any work.

By the way, the chief financial officer of the UIA, one Rick DiBartolomeo, warned Snyder two years ago that Moffett-Massey was engaging in irrational and unprofessional conduct. Snyder never responded, but the whistleblower soon found himself dismissed instead.

And what of the victims? Well, so far, the state has been willing to pay back only the money it seized from people, including the penalties and interest, if they come forward and prove their claim.

But if you lost your house because of the state's unfair action, up till now, Lansing's attitude has been... tough luck for you.

That may be about to change. The legislature did pass a comprehensive package of bills to fix the unemployment system, and to make the penalties for small offenses fit the crime.

But they haven't yet passed a plan for a Victims' Compensation Fund, though everyone involved, even Governor Robot and the Republicans in the legislature, agree one is needed.

What's not clear is how much money they'll put in it. The governor's office has been talking about $20 million. State Rep. Joe Graves, a Republican who took the lead on the package of bills reforming the system, thinks $30 million is right. But even that would be less than $1,000 for every person falsely accused of fraud.

Jennifer Lord thinks both amounts are way too small, given the sheer scale of human suffering. "I think it needs to be more like $100 million," she says. But something else needs to happen, too.

As it now stands, Lord and a few other attorneys like her have no chance of getting paid unless the state agrees that the work they are doing qualifies as a class action lawsuit.

Court of Claims Judge Cynthia Stephens ruled it was indeed a class action lawsuit — but that was promptly reversed by a panel of judges from the Court of Appeals, which reversed it because they said the defendants had waited too long to file.

Now, her only hope is to have that judgment reversed by the Michigan Supreme Court. If there's any justice, they should agree that what she has been doing is in the finest tradition of class action work — standing up to power on behalf of those who need it most.

Most Popular

Best Things to Do In Detroit

Newsletters

Never miss a beat

Sign Up Now

Subscribe now to get the latest news delivered right to your inbox.