Opinion: How did Washington allow Nigerian hackers to steal hundreds of millions in the massive unemployment fraud scheme?

Clark County Today Editor Ken Vance: ‘I hope we hear some thoughts on that subject at Thursday’s Republican Gubernatorial Candidate Forum’

This week, seven Republican Candidates will converge on Clark County for a Gubernatorial Candidate Forum hosted by the Clark County Republican Women (CCRW). Clark County Today and Lacamas Magazine will team up to bring you coverage of the event.

Make no mistake, this is a partisan event. It is being presented by the Clark County Republican Women and it will only include candidates attempting to unseat Gov. Jay Inslee in November. A flyer promoting the event proclaims, “Let’s retire ‘Wrong-way Jay!’’’ 

Clark County will be the site of the only known candidate forum involving seven Republican gubernatorial candidates prior to the August primary election. The event, to be held Thu., July 9, will be hosted by the Clark County Republican Women.
Clark County will be the site of the only known candidate forum involving seven Republican gubernatorial candidates prior to the August primary election. The event, to be held Thu., July 9, will be hosted by the Clark County Republican Women.

For the record, if the governor comes to Clark County on a campaign stop, we will cover it. If an event was held by a number of Democratic gubernatorial candidates, we would cover it. By the way, there were only a limited number of tickets sold for the event and they are long gone. Lacamas Magazine will stream the event live on its Facebook page and Clark County Today will also provide all the video and other reports beginning Fri., July 10.

There are also two League of Women Voters candidate forums being held this week, on Wednesday and Thursday involving both Democratic and Republican candidates, and we will cover those as well.

As I’ve stated many times, I never publicly endorse any candidates and go out of my way to do everything in my power to not attempt to influence any campaigns. I can’t remember ever publicly trying to impact your vote. As a journalist, it’s my role to provide you with information and then let you decide. It’s not my job to tell you how to vote. With all those disclaimers stated, the opinions I share in this space on a regular basis are often, not always, conservative in nature. It’s who I am. I don’t need you to think and feel like I do and I have no desire for you to tell me how to view the world.

That said, not every political issue is easily divided by ideology. One time, a former local politician recited to me his version of the famous quote, “what’s political about a pothole?’’ But, one of the reasons I tend to be conservative in nature, when it comes to ideology, is I prefer a smaller, less-intrusive government. I want the government to protect me and then basically leave me alone to live my life as unencumbered as possible. 

In the case of the massive current unemployment fraud scheme by Nigerian hackers, the Washington state government didn’t protect me or millions of other Washingtonians very well. I hope we hear some thoughts on that subject at Thursday’s Republican Gubernatorial Candidate Forum.

CCRW President Liz Pike
CCRW President Liz Pike

“Governor Jay Inslee has proven himself unfit for office,’’ said former state Rep. Liz Pike, the president of the CCRW and the person largely responsible for organizing Thursday’s candidate forum. “He’s mishandled the pandemic response, causing job loss for nearly one million residents in our state, and allowed a massive hacking of tax-payer funded unemployment insurance reserves by foreign criminals. This will cost our state upwards of $850 million.’’

Current state Rep. Vicki Kraft conveyed a similar sentiment to me in an exchange last week.

Rep. Vicki Kraft, R-17

“When Covid-19 hit, businesses and jobs were effectively shut down by Governor Inslee, sending over 1 million people into unemployment,’’ Kraft wrote to me in an email. “This is a much larger volume of claims than ESD normally processes. However we are now three months into this backlog of payments and there are still over 10,000 people who have not received payment in over 10 weeks. This is not acceptable! These are people in many cases needing to pay rents, mortgages, groceries and other monthly bills. They need to receive the money due them now.’’

My personal case

I’ve been scratching my head trying to figure out how the Washington Employment Security Department (ESD) allowed Nigerian hackers to bilk us out of anywhere from $650-850 million.

“(I) Agree it does not seem there was a solid ‘check and confirmation process’ with employers in place to have so many fraud claims paid out,’’ Kraft wrote to me in our exchange.

I was one of those whose identity the hackers attempted to use to steal unemployment benefits.  

They likely got my personal information during the 2017 attack on the credit reporting agency Equifax and used it to file an unemployment claim in my name with my employer in early May.

Now, we are obviously a very small business, currently with just seven employees. So, when our administrator received the claim, she immediately knew it was fraudulent and then informed me immediately. Both of us were aware of the scheme and had instructions of what steps to take to report it. We both reported it immediately and within a couple of weeks I received confirmation from the ESD that the fraudulent attempt had been thwarted.

Even though the fraud attempt in my case was filed in early May, the claim stated that I had left work in February, so the attempt was to receive about three months of back benefits, which are a maximum of $790 per week in Washington and another $600 weekly in additional federal funds allowed for in relief from the coronavirus pandemic. I do not believe any funds were actually ever paid on my fraudulent claim. The ESD reported recently that it had “recovered’’ $333 million of the $650 million that had been erroneously paid out (and that $650 million figure is expected to grow).

Like I said, from my own experience, I just couldn’t understand how the ESD could have paid out $650 million on claims that were fraudulent. One theory is that Gov. Inslee encouraged the ESD to take shortcuts in order to get the benefits in the hands of unemployed Washingtonians as soon as possible. But, I can’t find any concrete evidence of that having been reported.

Washington State Auditor Pat McCarthy recently said her office will investigate the unemployment fraud scheme, which has also led to complaints that the ESD has since delayed the payment of benefits in order to prevent further payments being made to the wrong people. It is estimated that the investigation will take six to nine months, which means it is unlikely that Washington voters will know the results before the November general election.

The entire situation is a horrific mess. We’ve all heard the reports, or known people personally, who have still not gotten through the system to receive the benefits they are entitled to. I’ve talked to employers who have had employees refuse to return to work because they are making more on unemployment (with the federal kicker) than they were actually working prior to the pandemic. 

If, and I emphasize the word “if,’’ Inslee is responsible in any way for allowing this to have happened, he obviously needs to be held accountable. Any other elected officials or government employees who were responsible by not doing their jobs well enough, they need to be held responsible as well.

So, that is just one of many issues I would like to see discussed at Thursday’s Republican Gubernatorial Candidate Forum.