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Republican Party leadership calls for investigation into Labor Department embezzlement case

Republican members of the Delaware General Assembly are calling for a legislative investigation into an embezzlement case at the Department of Labor.

According to initial reports from WHYY News, a former Delaware state employee stole over $180,000 from the state’s unemployment insurance fund in 2023.

Although the incident became public last month, some members of the General Assembly also pointed out that this was the first time they had heard of the embezzlement.

Following the original article, the Delaware Coalition for Open Government (DelCOG) – a nonprofit organization that advocates for transparency and accountability in government – ​​filed a motion with the General Assembly calling on the body to “investigate the failure of state officials responsible for reporting the embezzlement of over $180,000 from the Delaware Department of Labor’s Division of Unemployment Insurance.”

A response statement from Republican senators said: “We agree with DelCOG’s letter and also call for an investigation by the Legislature. Our caucus recently met with the Department of Labor’s administrative team and the Division of Unemployment Insurance to discuss what happened. Outside consultants were brought in to analyze the deficiencies in the agency’s systems that led to this incident. While we appreciate the Department’s openness and willingness to talk, we believe as elected leaders that we must conduct a separate investigation to correct the problem and restore trust between the Department and the public we serve.”

In the letter, DelCOG points out that the Delaware Code requires the filing of written reports to the Governor, the General Assembly and the public following audits by the Office of the Auditor of Accounts, and that they must also disclose any illegal and improper practices.

But in March, state Comptroller Lydia York released the state’s comprehensive annual financial report three months late, noting that the Delaware Unemployment Compensation Fund could not be audited due to a combination of outdated accounting systems and historic amounts of federal funding during the pandemic.

However, a June 4 letter to the Legislature from Department of Labor (DOL) Secretary Karryl Hubbard and Department of Finance (DOF) Secretary Rick Geisenberger states: “Upon discovery of the theft, DOL management promptly notified the Department of Human Resources and the Department of Safety and Homeland Security. Within days, the employee suspected of the theft was placed on administrative leave and, sadly, passed away the same day.”

The letter goes on to say that over the course of the following week, several other state and federal agencies were notified of the theft, including the Delaware State Police and members of the General Assembly who serve on the Unemployment Insurance Advisory Council.

House Republican Leader Mike Ramone says he only learned of the incident a few weeks ago. He and his Republican colleagues in both chambers are wondering why the General Assembly was not immediately informed of the theft, as time is running out for legislative action as the session ends in late June.

“I don’t want people to get the impression that, ‘Oh, this was moved slowly, and they waited until July because they knew then nobody would go to the meeting and nobody would do anything, etc.’ So we thought it was important to issue this letter with the clarification,” Ramone said.

Ramone is referring to the plans of the Ministry of Labor and Finance to present a report to the General Assembly in July, but in his group’s letter he calls on the Democratic leadership to take action as soon as possible.

“Is that July 1, is that July 30, is that, you know — that gives me pause because I feel like we should be dealing with an ‘if-then.’ If it comes out, ‘if-then,’ and we’ve set that up now or we’ve set a special time when we’re coming back for a special session,” he said.

If, following the report, the General Assembly decides that legislative action is necessary, the Speaker of the House must call a special session, otherwise business will be adjourned until January 2025. Ramone therefore believes that waiting until July to fully address the situation could result in delays in addressing potential impacts.

Democratic leadership in the House of Representatives could not be reached for comment, but said that after receiving the promised report, they might consider convening a hearing by the Joint Labor Committee to review the findings and ask questions.