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Former head of DETR: Optics seemed to color Sisolak administration’s unemployment response

Michelle Rindels
Michelle Rindels
ElectionsGovernment
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The former acting chief of the Nevada Department of Employment, Training and Rehabilitation (DETR) says he blames the governor’s office for actions that slowed down Nevada’s response to a torrent of unemployment claims during the pandemic, and he believes concerns about political optics and news headlines played an outsized role in the response to the crisis.

Dennis Perea, who worked 14 years for DETR and ended as its acting director before abruptly resigning in July of 2020, didn’t publicly explain his departure at the time. But in a recent interview, he said that the decision was “a death by a thousand cuts,” including a sense that Democratic Gov. Steve Sisolak’s office and a staff heavier on campaign experience than state government experience prioritized special interest groups such as the Culinary Union.

“I'm answering phone calls where a lady's yelling at me and saying she has to go back to prostitution to feed her kids if she doesn't get her unemployment insurance, and then the next call is you need to meet with the Culinary Union,” he said. “It was a no-win situation for everyone. No state won, no governor did. It was an absolute train wreck. But we could have done better with a little support.”

Nevada was pummeled by the unemployment crisis, with the agency going from handling a few thousand initial applications for benefits each week to handling more than 90,000 in a single week when casinos shut down. The number of claims filed during the pandemic — many flagged as likely fraudulent — well exceeded the number of Nevadans who comprised the workforce, creating overwhelming workloads for the agency.

As of earlier this month, 26,467 unemployment insurance claims were awaiting adjudication, and the oldest of that batch dates back to the beginning of this year, DETR officials said. That number includes 7,386 that need a review to ensure the claimant has enough earnings to open a new claim, and 3,777 that need a review because of unreported earnings.

DETR officials added that roughly half of all people who file new claims begin receiving benefit payments within two weeks.

The Sisolak administration’s handling of the unemployment surge has trickled into the tight governor’s race, with Sisolak’s primary and general election opponents alike criticizing business restrictions that spurred the jobless surge and the bottlenecks in the government response.

Sisolak’s office noted that Perea was acting director for less than a month’s time during 2020, after Director Heather Korbulic had resigned on account of threats. Governor’s office spokeswoman Meghin Delaney said unemployment staffers were facing “unprecedented times, keeping up with unprecedented demand.”

“During interim periods, the Governors’ Office worked closely with the deputies at the time – including working directly with the Employment Security Division Administrator after Korbulic’s departure to ensure no disruption to services,” Delaney said. “Due to the fast-moving nature of the crisis and the need to connect Nevadans with their benefits, other employees within the agency may not have been included in all conversations with the Governor’s Office.”

Perea said efforts in the thick of the situation to implement a “strike force” led by former Assembly Speaker Barbara Buckley, and a lawsuit that sought to compel mass payment of Pandemic Unemployment Assistance claims but ended up assigning a “special master” to examine the operations of DETR, slowed down claims processing. Because unemployment insurance processes are so heavily regulated, the extra interventions “essentially couldn't do anything to add value,” Perea said.

“There was some things that the committee did do that I thought … was pretty cool. They ended up using staff of HHS to help try to clear some claims,” he said of the strike force’s work. “But the reality of it was we didn't need that. The governor could have ordered that on day one.”

Buckley acknowledged that the strike force had to work within the confines of complex federal rules, but defended the group’s work to expedite processing, pointing to their ideas such as grouping similarly situated claims for “batch” approval.

“In the end, while some people, including former administrators, shrugged their shoulders during the height of the pandemic and crisis and said ‘there’s nothing that can be done,’ I was proud to volunteer hundreds of hours trying to speed things up for Nevadans in need,” she wrote in an email.

Perea also struggled with requests from people in power who wanted to move certain claims to the front of the line. Emails showed Buckley asking for a more prompt adjudication interview for “the husband of a community partner” and review of the stalled claim of “a woman I know very well”; lawmakers also tried to get attention on claims that their constituents brought up. Perea said lawmakers would get responses, even though such requests could almost never help a claim “jump the line” because there was nothing unique about it.

“Right or wrong, that is the reality of every agency out there … they’re elected officials, they were elected by the people, you do that,” he said about responding to legislators. “I can’t move on 98 percent of them because as of right now, there's nothing special about them.”

Buckley pushed back on the suggestion that she gave special treatment to certain individuals, personal friends or relatives.

“During my time with the Strike Force, I received hundreds of requests for help and sent every person to DETR for processing/follow up,” she said. “Every single person who contacted me got a response back.”

Emails between Buckley and DETR employees reference outreach within the strike force focused on the Culinary Union members and lists of complaints originating from some of the 60,000 Nevada workers that the Culinary represents. Buckley said that the union “gained no special treatment for themselves. They were advocating on behalf of tens of thousands of workers who were at risk of losing everything overnight during the height of the pandemic.”

Perea thinks decision-making within the Sisolak administration was bottlenecked, which slowed the ability to respond to the crisis. He said it was demoralizing not to be able to answer staff questions because he couldn't get callbacks, and to find out information about major changes to the agency through the press.

“It was like a single decision maker model, like they couldn't move without talking to the governor,” he said. “I couldn't get answers to simple questions. I couldn't get an answer to figure out if I could legally sign a lot of the stuff … that the federal government needed as the appointing authority of the agency because I couldn't get a call back.”

Perea said one of the biggest challenges came when a staffer from the governor’s office preferred a different vendor for the claims processing system that administered the Pandemic Unemployment Assistance program for gig workers, suggesting a system that had ties to Microsoft would look better than one from Geographic Solutions, a vendor that DETR already used in another of its divisions.

Ultimately, DETR officials won the argument and used Geographic Solutions, but Perea said the disagreement cost two precious weeks at the height of the crisis.

“You can't have a single decision maker model in a crisis,” Perea said. “And you need to listen to the people that are getting crushed in the newspaper. They're trying to get the work done. And don't interfere with contracts.”

Perea said he has since helped write white papers about the unemployment crisis and suggested changes, most of which need to happen at the federal level. The Office of the Inspector General has also explored ways to change the system.

Perea said he has worked under both Democratic and Republican governors and considers himself an independent, but can’t support Sisolak for re-election because he thinks his administration’s response to unemployment was not competent. He said his goal in speaking out is to ensure the mistakes he saw never happen again, but acknowledges that some of the challenges were inevitable.

“If they gave us everything that we needed, it would only have been a better disaster,” he said. “It would have never not been a disaster.”

Sisolak’s office said it is committed to helping DETR prepare for any future surges, including through legislation passed in 2021 that earmarks $54 million to upgrade the agency’s computer systems.

“The Governor’s Office has been steadfast and firm in working with agencies to remove barriers and create efficiencies to ensure that benefits were expeditiously delivered to Nevadans in need during the worst public health and economic crisis,” Delaney said.

This story was updated at 7:50 p.m. on Sept. 13, 2022, to include a response from DETR officials.

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