Under the cruel austerity of Michigan governor Rick Snyder — whose policies led to the mass-poisonings of children in Flint — any claims for unemployment insurance were vigorously investigated, with the state operating on the assumption that any worker who claimed a benefit was probably committing fraud.
For years, Michigan workers have disputed thousands and thousands of accusations of insurance fraud — accusations generated by opaque, unauditable software — facing the loss of benefits and fines of $100,000, and spending fortunes appealing the accusations in court, this money being deducted from their federal and state tax-refunds. Many of the falsely accused were forced into bankruptcy.
Michigan's automated fraud-accusation system operated without human oversight, automatically cutting off workers without their cases being reviewed by human beings.
This week, the Michigan unemployment insurance agency released its own audit into the system, and found that 93% of its fraud accusations were false, accounting for more than 20,000 actions against innocent Michigan workers over the two years from 2013-2015.
A further 30,000 fraud accusations from the same period have yet to be audited.
The millions of dollars in fines generated by the false accusations were accumulated into a fund that the state's Republican legislature has just appropriated to balance the state's budget. The system was instituted under Governor Snyder. It is called "MIDAS."
The system, known as the Michigan Integrated Data Automated System (Midas), caused an immediate spike in claims of fraud when it was implemented in October 2013 under the state's Republican governor, Rick Snyder, at a cost of $47m.
In the runup to a scathing report on the system issued last year by Michigan's auditor general, the UIA began requiring employees to review the fraud determinations before they were issued.
The fraud accusations can carry an emotional burden for claimants.
"These accusations [have] a pretty big burden on people," Grifka said. While he said the new findings were validating and his own case had been resolved, he called for state accountability.
"There's no recourse from the state on what they're doing to people's lives. That's my biggest problem with all of this."
Michigan unemployment agency made 20,000 false fraud accusations – report
[Ryan Felton/The Guardian]
(Image: Michigan Governor Rick Snyder Talks with Media after Michigan Municipal League Board Meeting, Michigan Municipal League, CC-BY-ND)