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GOP Lawmakers Push For Scrutiny Of Unemployment Fund

ALBANY — GOP lawmakers launched the 2023 session by spurring their Democratic colleagues to hold the state government accountable after the Hochul administration awarded a $637 million contract to a campaign contributor and a state agency mismanaged billions of dollars in unemployment benefits.

“Is this Legislature going to do anything about that?” asked Assembly Republican Leader Will Barclay, R-Pulaski, referencing the rampant fraud that contributed to the draining of the unemployment insurance fund overseen by state Labor Commissioner Roberta Reardon, an appointee of Gov. Kathy Hochul.

Barclay also pointed to an alleged pay-to-play scandal involving a contract awarded to Digital Gadgets for COVID test kits. Hochul’s gubernatorial campaign received some $300,000 in contributions from the company’s founder and members of his family.

“Does anyone see a problem with that?” said Barclay, contending legislators “need to provide accountability when serious questions arise.”

Hochul has said her administration was not influenced by campaign contributions and it was important to buy the COVID kits when they were available at a time when officials were reopening classrooms.

But Barclay said there are lingering questions as to why the state spent so much on the tests when other companies offered similar devices at much lower prices.

The goal of “restoring accountability” was also highlighted by Senate Republican Leader Rob Ortt, R-Niagara County, and his GOP colleagues as they released a laundry list of legislative objectives they described as a “Rescue New York” mission.

Ortt argued that all lawmakers and statewide officials should be focused on addressing the ongoing outward migration of New Yorkers to other states, contending that those who are unconcerned about population loss are “part of the problem.”

Both Sen. Pete Oberacker, R-Otsego County, and Dan Stec, R-Queensbury, said lawmakers should pursue the debacle involving the loss of billions of dollars in jobless benefits amid the pandemic at the Labor Department, as documented in November by Comptroller Tom DiNapoli.

The state took a $7.7 billion federal loan to replenish the fund, and business advocates have complained employers are now footing the bill for that borrowing, while continuing to pay the state unemployment insurance tax, a charge that increases when the fund is low.

Oberacker said he is calling for a sweeping forensic audit of the state’s information technology systems, suggesting the widespread fraud that hit the unemployment fund is a sign that the state government was caught off guard by the schemes aimed at fleecing jobless benefits by filing bogus claims.

The mounting costs businesses have been forced to absorb, Oberacker said, could add to the exodus of New Yorkers. “They keep adding rocks to their wagon, but businesses can only go so far until they reach a tipping point and say, ‘You know what, New York, thanks but no thanks. I’m out of here.'”

Stec called the state’s processing of fraudulent jobless claims “a reckless way to handle taxpayer money,” suggesting lawmakers delve into how the fraud went undetected for a lengthy period. “This has to be pursued,” he said.

The Senate GOP, Stec said, is embracing “realistic spending expectations,” arguing New York spends far more money for its population than Texas or Florida, two states that have become destinations for people searching for career opportunities.

One of the Legislature’s two most powerful Democrats, Assembly Speaker Carl Heastie, D-the Bronx, said priority topics in his chamber will include “affordability and rooting out causes of crime and unease in our communities.”

“Crime breeds off poverty and lack of opportunity,” Heastie said. “We cannot police, imprison and penalize our way to safer communities. It’s why we work to combat the root causes of crime in our communities, not just symptoms.”

John Kaehny, executive director of the government watchdog group Reinvent Albany, said he hopes lawmakers from both major parties insist on hearings aimed at examining the billions of dollars lost at the Labor Department due to fraudulent payments.

“This could really be one of the biggest government failures in state history,” Kaehny told CNHI. “What New Yorkers should understand is that this involves New York state tax dollars — business taxes that now have to be paid back” after the fund was drained from a torrent of claims for jobless benefits.

In the same Assembly parlor where Heastie spoke Monday, Hochul will discuss her priorities for 2023 Tuesday when she presents her first “State of the State” speech since defeating Republican challenger Lee Zeldin two months ago by five percentage points.

Zeldin took more upstate votes than Hochul, though the latter won some of the counties with the highest populations, including Erie, Monroe, Onondaga and Albany.

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