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Labor Department IG retires after warning of UI fraud risks

Department of Labor Inspector General Scott S. Dahl announced Tuesday he would be retiring at the end of the month. Photo courtesy of U.S. Department of Labor/Website
Department of Labor Inspector General Scott S. Dahl announced Tuesday he would be retiring at the end of the month. Photo courtesy of U.S. Department of Labor/Website

June 2 (UPI) -- A day after informing lawmakers of the risk of rampant unemployment insurance fraud during the COVID-19 pandemic, U.S. Labor Department Inspector General Scott S. Dahl announced Tuesday he would be retiring before the end of this month.

The President Barack Obama-appointee resigned in a letter stating he will stay at his post until June 21, making him the latest inspector general to either be fired or step down under the Trump administration in recent weeks.

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"This decision has been long in the works and is for entirely personal reasons," Dahl wrote. "I have not been told or asked to resign."

On Monday, Dahl told the House oversight and reform committee in a video conference that the risk of unemployment insurance fraud during the pandemic is high "and we're seeing evidence of this during our investigation."

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More than 40 million Americans have filed unemployment claims in the last few months, and President Donald Trump signed a massive bailout package called the CARES Act that includes an additional $260 billion for such benefits, and Dahl said this will "substantially" increase fraud with criminals "easily exploiting system vulnerabilities."

Some three dozen frontline health workers' identities have been stolen while they fight the pandemic and were used to file fraudulent unemployment claims throughout the country, he said, stating "this is just one example of more than 300 investigative matters involving UI fraud we are aggressively pursuing."

The department estimates about 10 percent of unemployment insurance payments, or about $26 billion worth, are "improper" under the best of situations, with Dahl saying it could be much higher during the pandemic.

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Dahl had issued a memo to states late May stating they lacked proper safeguards and suggesting they require claimants to file document earnings when applying for unemployment benefits. However, he told lawmakers Monday the department responded that they "had a different interpretation of what's permitted under the CARES Act" in terms of required documentation.

He also informed lawmakers that he was "very surprised" that the Department of Labor's Occupational Safety and Health Administration had only issued one citation during the pandemic despite receiving more than 3,000 worker complaints.

Secretary of Labor Eugene Scalia said Dahl's seven years as head watchdog has helped to improve the integrity and quality of the Labor Department's programs.

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"The department and the people it serves have benefited greatly from his contributions," Scalia said in a statement. "We wish Scott and his family the very best in the future."

Dahl's resignation follows President Donald Trump firing, demoting or criticizing several inspector generals including four top watchdogs who have been relieved of their duties, including Michael Atkinson of the intelligence community and Glenn Fine at the Pentagon.

The American Civil Liberties Union has described the exodus as an "assault" on the country's inspector generals who disagree with the president, and has urged Congress to shore up legal framework protections with "safeguards against president firing IGs on a whim."

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