Illinois lawmakers want investigation after audit shows unaccountable unemployment fraud

[June 18, 2022]  By Kevin Bessler | The Center Square

(The Center Square) – The call is growing louder for an investigation of Illinois' unemployment agency after an audit revealed an "unprecedented" number of fraud cases.

The report by the Auditor General said the Illinois Department of Employment Security paid out nearly $2 billion in federal tax funds to fraudsters. The audit covers the year up to June 30, 2021.

"That is what really is surprising everybody, just a massive amount of money stolen, and the governor is just throwing up his hands claiming it is not his fault," said Senate Minority Leader Dan McConchie, R-Hawthorn Woods. "That is really frustrating to me."

McConchie added had Gov. J.B. Pritzker "prioritized the issue and not been so focused on arbitrarily shutting down businesses and then criminalizing them for noncompliance of his mandates, these problems could have been mitigated."

Pritzker's office told the Capitol Fax political blog the agency stopped $40 billion in fraudulent payments and blamed the administration of former President Donald Trump.

"The fraudsters illicitly got federal money – not state – because the Trump administration designed a uniquely flawed system," the statement said.

Senate President Don Harmon, D-Oak Park, told The Center Square they are reviewing the audit findings "and possible next steps."

Officials at IDES admitted in 2020 that more than 200,000 fraudulent unemployment claims had been filed but never released a dollar estimate despite requests from lawmakers.

Auditors also found the agency failed to maintain accurate and complete data on people filing claims through the program, stating "the accounting was so horrendous that the Auditor's General's office could not conduct a proper audit of IDES to determine the amount of fraud that occurred."

Numerous lawmakers are demanding hearings on the matter, including state Rep. Dan Caulkins, R-Decatur.

"We need to get these people out in the open and we need to ask them who got this money," said Caulkins. "They know who they wrote the checks to."

Auditor General audits are often the subject of hearings held by the Legislative Audit Commission, but no hearing date is scheduled. The last hearing was in May.

According to the Chicago Tribune, an investigation they published last year identified "problems in Illinois were exacerbated" by the department's failure to adopt fraud-fighting tools provided before the pandemic, per federal recommendations.
 

"Learning that almost $2 billion was paid out to fraudsters from IDES during a time when Illinoisans critically needed this assistance is appalling," said state Rep. Dan Ugaste, R-Geneva. "The General Assembly must hold this agency accountable for such inexcusable mismanagement in a time of crisis for many Illinois residents. These are taxpayer dollars. We need to get to the bottom of this issue immediately, starting with legislative hearings."

The audit also notes the state approved using federal tax funds to pay down $2.7 billion of the $4.5 billion unemployment trust fund debt Illinois incurred during the pandemic, "resulting in a remaining loan balance of [$1.8 billion] as of March 29, 2022."

Illinois taxpayers are on the hook for interest on that remaining loan balance. If the debt isn't paid off, it could lead to tax increases on Illinois businesses and benefit reductions for the unemployed.

"I hope that we can convince the Pritzker administration to use that COVID money rather than taxing our employers," Caulkins said.

Kevin Bessler reports on statewide issues in Illinois for the Center Square. He has over 30 years of experience in radio news reporting throughout the Midwest.