President Joe Biden’s pick to lead his administration’s response to the economic damage caused by government shutdowns amid the COVID-19 pandemic previously lost $600 million of Washington state’s aid dollars to foreign fraudsters in a hasty unemployment program rollout.
Earlier this week, reports indicated that former head of the Washington state Employment Security Department (ESD) Suzi LeVine would begin an interim leadership position in the Labor Department’s Employment and Training Administration program on Monday, overseeing the implementation of the federal unemployment benefits included in Biden’s $1.9 trillion COVID-19 relief proposal. While some have said that new leadership could help remove some of the “chronic delays” in the pandemic payments, others have questioned LeVine’s capabilities to properly and carefully handle the process, considering her rollout track record.
Just last year, LeVine’s department in Washington state lost hundreds of millions of dollars to a long-known Nigerian scammer group called “Scattered Canary.” According to the U.S. Secret Service, Washington was the “primary state targeted” by the “well-organized Nigerian fraud ring exploiting the COVID-19 crisis to commit large-scale fraud against state unemployment insurance programs.” The group, which historically targeted other American aid funds such as for students, Social Security, and disaster relief, used information from other breaches in Washington to create bogus joblessness claims and hike up the system’s number of claims.
Under LeVine, ESD, overwhelmed with a sudden and “unusual” surge in state requests for financial help despite the falling national number, quickly pushed through the payouts for the claims, intentionally and knowingly skipping the identity verification processes that usually occurs during an unemployment payout “waiting week.” As a result, LeVine later reluctantly admitted the fraud and temporarily suspended all benefit payments for a couple of days, completely cutting off legitimate claimants as the department and law enforcement began the financial cleanup and attempted recovery from the bogus claims.
Months after the fraud was first discovered, audit one of the state’s five-audit evaluation found that the ESD under LeVine’s leadership was responsible for a software liability that allowed the Nigerian scammers to defraud the state of at least $600 million. The state eventually recovered $357 million of the total number but suffered a net loss of at least $243 million. This loss comes just one month after LeVine announced that fraudsters siphoned $1.6 million off the state.
State Auditor Pat McCarthy later scolded LeVine for interfering with fraud investigations, stating that the commissioner imposed “significant constraints” on the auditing process, “including attempts at limiting interviews with key ESD employees and delaying access to important documents.” McCarthy eventually threatened to report “management interference” if LeVine did not cooperate.
Some critics wanted LeVine fired after she tried to prevent the audit of ESD’s gross negligence that caused the state to lose money, but Democratic Gov. Jay Inslee and other left-wing state legislators ignored their cries, taking LeVine’s side, a demonstration of her growing rapport with the Democratic Party. Despite her failures in properly delivering on Washington’s pandemic aid, Biden tapped the former ambassador to Switzerland during former President Barack Obama’s tenure in office for his large and contentious COVID-19 relief package, granting her an annual budget of about $9 billion. LeVine, a so-called “major player in the Democratic Party,” also reportedly donated hundreds of thousands of dollars to Biden’s 2020 campaign and other “Democratic causes” and served as a deputy national finance chair for the Democratic National Committee with her husband in 2017.