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New light shed on more dark money in the House Bill six corruption scandal.

And the head of one of the state's largest agencies talks about unemployment, food stamps and fraud.

That's this weekend.

The state of Ohio.

Welcome to the state of Ohio.

I'm Karen Kasler.

A new development in the House.

Bill six nuclear power plant bailout scandal.

As new documents show, FirstEnergy paid $2.5 million in dark money to help Mike DeWine's initial campaign for governor in 2018.

The filings from the Public Utilities Commission of Ohio show.

First Energy gave to State Solutions a 500 1C4 associated with the Republican Governors Association, with one installment of a half $1 million labeled DeWine.

FirstEnergy also gave publicly disclosed funds to both the RGA and the Democratic Governors Association, which was helping DeWine's opponent, Richard Cordray.

But DeWine told reporters this week that he didn't know about the money.

Well, if you remember, in 2018, both Richard Cordray and myself, both were publicly, in favor of some help, to the nuclear energy.

We both felt that nuclear energy was important for the state.

So there really was not a dispute in that campaign about that at all.

So I guess why was FirstEnergy contributing millions to your campaign versus, you know, 500,000 to him?

Well, first of all, I don't know what they.

First of all, I don't know what they contributed to his, and didn't know really until, you know, documents came out what they contributed to us because they were contributing to, you know, to an independent expenditure.

And as you know, independent expenditure.

We can't collaborate back and forth.

And that was be true with Richard Cordray as well.

As to whether Firstenergy's support led him to sign House Bill 6 in 2019, DeWine said this.

No.

Absolutely not.

I guess I felt this was I thought this was in the state's interest.

And people can, you know, argue about the bill or they can argue about whether we should have nuclear energy.

My position was we need to have nuclear energy.

We need to all the all of the above.

and so that was my my position.

That's why I felt that's why I publicly said.

Do you feel utilities or first gen or energy in particular has too much influence on the state house or state government?

Well, everybody can make that own judgment.

I mean, we're getting more and more facts out as far as, you know, how much money they were spending.

They were spending it, obviously, you know, a lot of money.

Do you think it should be legal?

Should a corporation like FirstEnergy be able to spend millions of dollars to back your election while they have a very specific legislative interest?

Look, I think that, you know, my position has been and remains I'm always open for, you know, legislation, that makes everything more transparent.

we also, though, have, as you know, supreme United States Supreme Court decisions, that classify this as First Amendment.

people exercising the First Amendment, the corporation exercising the First Amendment.

So, you know, any limitation on that would have to be consistent with what the United States Supreme Court has said.

And the nine states Supreme Court was pretty, pretty open about what, you know, pretty broad about what people could could do in campaigns and limiting what the government could do to regulate that.

News of this dark money donation has renewed calls for more disclosure of political contributions, but Republican House Speaker Jason Stephens said there's not a viable bill that would require that.

I mean, dark money.

you know, the Citizens United decision, you know, the c4's I think it's, you know, we we see it in the most recent primary.

I think it shows up in every election.

the the question becomes, you know, the First Amendment and the federal, you know, Supreme Court decisions make it a little more challenging to.

to deal with that.

Issue.

So but I'm all ears on what is the best way to do that.

House Minority Leader Allison Russo, who voted against House Bill six when it first came through that chamber, has been pushing for changes to transparency and other laws that would prevent another scandal.

I'm not surprised.

we have said all along that the tentacles of this corruption scandal, they run deep through the halls of state government here in Ohio.

and, you know, again, this took multiple people signing off, to allow this legislation to pass and to allow, what happened on the public utilities Commission.

so this is not about one person or two people.

This required a lot of people, being influenced by money and so I'm not surprised, you know, as more information continues to come out that, we are discovering that more folks and higher positions are likely involved and, receive some sort of benefit, at least, on the political side from FirstEnergy, it's dark money.

Meanwhile, Democrats and Republican leaders are still looking at a state law that could keep President Biden's name off the top of Ohio's ballot this fall.

The Democratic Party's convention in Chicago is set for August 19th through 22nd, and the 90 day deadline for presidential candidate certification for Ohio's general election ballot is August 7th.

Stevens said he'd like to see the law changed because Republicans could be affected in the future, as they were along with Democrats in 2012 and 2020.

Both times, the deadline was temporarily moved to 60 days, and Republican Senate President Matt Hoffman has said that Biden will be listed on the ballot.

But so far, there's no legislation proposed.

And Republican Secretary of State Frank Larose has said that needs to be proposed and passed by May 9th, after four decades of efforts to change a provision of state law shielding people who rape their spouses from prosecution.

The Ohio Senate has voted unanimously to remove that loophole.

Efforts to close the spousal rape loophole go back to 1985, with a minority of lawmakers over the years expressing concerns about rape allegations being used as wedges in divorce cases.

But supporters have said leaving those exceptions for spouses in the law sends the message that spousal rape is not as serious an issue as other sexual offenses, or that it doesn't even exist.

This is especially concerning, as a spouse should be the most trusted person in a marriage, and it is even more egregious to think that in our state in 2024, it is lawful to to rape your spouse.

You know, it's been asked often, how long does it take to get legislation passed and this bill, I recall it first coming to my attention that Ohio needed a spousal.

Rape.

Bill.

And to address that, actually, in the early 90s.

And while Ohio addressed parts of the law, then this loophole.

remained.

After passing the House in November with only one no vote from Republican Representative Bill Dean, the bill now goes to governor Mike DeWine for his signature.

Around 220,000 Ohioans are unemployed, according to data from the Ohio Department of Job and Family Services, which deals with unemployment claims and payments, as well as cash and food assistance, child support and adoption, among other things.

Owed.

JFS is the fifth largest state agency by number of employees, but it has a huge reach, especially with people in need.

Quite often, people outside the system think about fraud, scams, cheating and dead people getting unemployment checks, particularly during the pandemic.

O.D.

JFS did dole out nearly $2 billion in fraudulent overpayments, but also made more than $5.7 billion in non fraudulent overpayments.

The pandemic exposed some serious problems in the system because of years of underinvestment, which are being addressed, but those trying to navigate through the unemployment claim system now still complain of long wait times and confusing bureaucracy.

I sat down with the JFS director to talk about that and more.

We can start with some good news.

The state's unemployment rate is about 3.7%, unchanged from January.

The state did set a record jobless rate low for 2023, below the national rate there.

But it wasn't until halfway through last year that the state actually surpassed its record 5.6 million jobs that was set back in May 2000.

Why did it take so long for Ohio to regain that 5.6 million level jobs?

Well, we certainly knew that because of the pandemic, it would take a while for all of those things to recover.

and, you know, Ohio has done a tremendous job under Governor DeWine's leadership, in making Ohio a great place to do business, raise a family.

and so, you know, we knew it would take time.

but it's happening, and, you know, as you mentioned, Ohio's rate is better than the national rate.

and so as we come out of this kind of seasonal time right now of the winter, we would expect over the next couple months for that rate to continue to improve and more people to come back to work.

For people who are filing for unemployment benefits.

On the other side of that, you've instituted a new way of proving identification by allowing people to go to post offices and prove that is that to try to cut down on the calls and the wait times.

Are you still having trouble with calls and wait times that really people were complaining about during the pandemic?

Also, the website not being available is that to try to deal with some of those issues.

So at JFS, one of our three guiding principles is that we get better at what we do every day.

And so one of the things that we recognized, is that the things that we put in place to mitigate fraud, also created challenges for, you know, non fraudulent individuals.

And so we're always kind of balancing, you know, that accuracy, and security pieces.

so one of the things that we implemented with the assistance of the United States Post Office, and the US Department of Labor, were, I think, the seventh state to do this now is that for individuals who go through the process and that we know have to provide some form of identification documentation, instead of submitting that online or going through some of our other processes, they can take it in person to, one of the almost 700, post office locations in the state of Ohio.

and so that's helping us both from a customer service standpoint.

And it's also an additional fraud mitigation measure, because if an individual is filing a fraudulent, claim, they're not likely to take, physical documents and to a person at the post office to try to prove their identity.

I know people during the pandemic were concerned about the whole system and kind of fed into this argument that has been made before, that the unemployment benefits system is not set up to really make it easy, that it's hard for people to file their claims, and it's intentionally that way.

What do you say when people bring up that argue?

Yeah, well.

We certainly don't design it to be intentionally difficult, certainly, because it is something that an individual has to demonstrate eligibility for based on the time that they've worked in their earnings, that they've accumulated.

you know, we have to have a process that we make sure that the eligibility is there.

And so there have to be some kind of, you know, some things in place.

but at the same time, we want to make sure that we're improving our customer experience for Ohioans.

You know, who's employers have paid into the system, who have earned eligibility, and who find themselves unemployed.

And so, you know, certainly we've made some improvements during the pandemic.

we have an RFP getting ready to go on the street this summer to replace the system.

that will hopefully overhaul, the entire customer experience, for claimants and taxpayers alike, as well as make it scalable for instances in the future, a recession or, you know, a pandemic, where, you know, more people need to use the system, than kind of happens normally.

An overhaul that's got to be expensive to, to overhaul the entire system that goes back decades.

But does, you know, it's running on a mainframe system.

It's an outdated, programing language.

And so it'll be a heavy lift for us to, replace that system.

but we spent a lot of time learning a lot of important lessons from the pandemic, making sure those are documented into the requirements.

and so it'll be a heavy lift, both from a technology standpoint, a training standpoint for us, and certainly fiscally.

tens of millions of dollars for that probably, or even hundred.

I would not expect it to be in the hundreds, certainly in the short run.

you know, we part of why we do the competitive RFP is to get the price as low as possible, but we also want to make sure that we're not buying just the cheapest product.

We want to make sure that we have value and that the system is doing the things that we needed to do.

And then Ohio is needed to do.

Another new thing here is a provision in a law that took effect last year that requires people who are getting unemployment benefits to bank with Ohio institutions.

And I believe there's a debit card for people who are not banking with Ohio institutions, financial institutions.

Why?

Why that?

Yeah, one of the things that we saw during the pandemic and certainly the legislature, as they created the House Bill six one for council that kind of monitored our activities during the pandemic.

One of the things that we saw were a lot of fraudulent activity, with out of state banks, especially, online banking systems, that don't always have all the same requirements as brick and mortar banks.

and so the legislature, proposed and we supported, the idea of having Ohioans, when they're making that direct deposit, be limited to using a bank with a physical presence in the state.

If a person doesn't have, a bank, that is bricks and mortar here in Ohio, there's still two other ways that they can get their unemployment benefits.

One is we can mail them a check, or we can mail them a debit card that gets has the the weekly amount, added each week.

So does that affect like online banks or banks that are only online.

It would primarily affect online banks that are exclusively online.

You know, if, brick and mortar bank, you know, has an online presence.

Certainly.

That's okay.

But we want to make sure that there's, you know, a bank that we can go and knock on the door if we need to, if we need to talk to somebody about fraudulent activity.

Speaking of that, you identified about $6.9 billion in fraudulent and non fraud overpayments in the traditional unemployment program and also the Pandemic Unemployment Assistance or PUA program, the fraudulent payments got a lot of attention because obviously scammers involved in that, that those fraudulent payments totaled $1.19 billion.

Of that $6.9 billion total, the non fraudulent payments.

So I guess the accidental overpayments were $5.7 billion.

So how did that happen that the non fraudulent payments were so much more than the fraudulent ones.

Well when you think about the non fraudulent payments there's kind of two categories.

one are individuals who you know are legitimate individuals here in Ohio who got paid, an amount that they should not have been paid.

and then there are a lot of non fraudulent payments that are likely fraud.

but it's an adjudication process that we have to actually have a finding of fraud in order to call it fraud.

And so there's some portion of those non fraudulent payments that are that are fraud.

But we just don't have enough evidence to call them fraud.

for individuals who you know, received an overpayment that they were not eligible for.

Part of that was because of the nature of the pandemic, programs that were being kind of created by the federal government as we went along, you know, as they would create new rules, certain circumstances would be, well, we paid a person who we thought were eligible under the old rules.

Now they're not eligible.

That creates a non fraud over payment.

The federal government did allow a process for some of those to be waived.

and so we've been working through those with individuals who are eligible for the waivers.

When you talk about non fraud payments being recovered, does that mean individuals who have been overpaid have to pay that money back?

And if so, how does that affect those people who are seeking help for not having an income coming in.

Yeah.

so certainly in cases where, there was a payment made, an overpayment, that was, not fraudulent.

if the individual can document that they did everything that, that we asked them to and that the overpayment, is a result of changing of the rules and those kinds of things, we can waive that other instances where, you know, people didn't give us all the information or maybe withheld information.

And that comes down to after the fact, you know, we're going to make those kinds of recoveries, and we work with, you know, with the attorney general when the collections are needed to be made.

and certainly, you know, work with the individuals to create payment plans where we can.

As of December, you report that you have recovered $139.4 million of fraud and non fraud payouts to traditional unemployment, 121 $191.4 million of fraud and non fraud payments to the PUA program.

That's a total of 338.

That's a total of $330.8 million recovered out of 6.9 billion.

That's not much when you look at it in that way.

Yeah.

When when we had, I think our second press conference after I joined the agency, you know, one of the things that we talked about with, some of our law enforcement partners, you know, because of the nature of the fraudulent activity, it was happening in Ohio and all the other states, you know, a lot of it was international crime rings, those kinds of things.

As soon as those those dollars hit bank accounts, they were moved immediately.

And so for a lot of that, both in Ohio and nationally, there's never going to be recovery.

for a lot of those dollars that you did mention.

you know, we worked very closely with financial institutions, many who, because of the nature of their regulations from the federal government, and the banking system, we're able to see kind of on the other side of the horizon that we couldn't see.

And banks stopped payments from being made because of activity that they saw on their side.

So a lot of that is money that we've recovered from individuals, but also that banks and cooperating with us were able to return because they didn't send it on down the line.

One of the things the legislature has been talking about for more than a decade now, I believe, is the unemployment compensation fund.

What's happening with that?

Ensuring that, can you talk about that?

Yeah.

Well, after, you know, during the pandemic, Ohio, like I think every other state had to borrow from the federal government.

to shore up its fund.

you know, the federal government allowed the states to use a portion of their one time federal Covid dollars, to pay those back and to restore the fund to where it was pre-pandemic.

so governor DeWine, did that here in Ohio.

and, you know, because we've had a growing economy and a growing, growing labor market, you know, we've been able to continue to pay into that fund, in Ohio, the legislature has had several different proposals the last couple of years.

you know, one of the things that's always important in those conversations is you want to balance, you know, where those changes lie.

Is it all on the side of the claimants in terms of reducing the weeks of eligibility, or is it all on the ratepayers by increasing the taxes on employers.

So, you know, the legislature's always having those conversations, to figure out how best to balance those.

And and we're always involved in those conversations running running you know, impact for the fund for different changes that they may make.

One of the other things that you folks do at JFS is administer the supplemental Nutrition Assistance Program, or Snap one food stamps.

You have warned recipients that there are scammers using skimmers out there.

What's happening with that?

And what's the concern?

Yeah.

So, the Snap benefits are put on what we call an empty card is, you know, basically what any of us have in our pocketbook or our wallet, you know, a credit card type thing, that they can use at the same kind of, you know, devices, point of sale devices at grocery stores as others would use their credit card or debit card.

so the same kind of, just like the pandemic, the same kind of fraudulent activity that we see bad guys trying to do, in the private sector against, banks and credit cards.

We're seeing on the snap side again, not just in Ohio, but nationwide.

and so, what we encourage our snap card holders to do is to make sure that they have their card pinned, have a personal identification number on that card that they turn on and off depending on when they are making, transactions.

And to change that pin regularly, we have an app that they can use if they have a smartphone or, or a laptop device at home, that they can manage their account.

the federal government also, as a result of the pandemic and seeing an uptick of Snap fraud nationally, for the first time and created a process by which states can reimburse individuals who have had Snap benefits, stolen.

So we started that process.

but really, you know, security and vigilance is the is the front of the of that process.

And so really encourage card holders, to pin their cards and monitor their transactions.

There have been some moves to try to put photo IDs on or photos on these cards.

the concern was, of course, preventing fraud, though the fraud that's been reported in that program is not very significant.

And also there are concerns about what if a caregiver is using the food stamp recipients card and that would create problems.

Where do you stand on photo ID or photos on these cards?

Well, the type of you know, it's important to remember that with snap.

And when that EBT card, Snap benefits are for a household, individuals who purchase and prepare food together.

and so anyone in that authorized household can use that card.

So, you know, having an individual's photo on that card really isn't going to cut down on the fraud that we do.

See that's really impacting people, which are those skimming type of scams of individuals.

And so we have some other ideas, that that we will be working with the legislature, certainly in a future budget, to fund.

One of the challenges is this is a federal program.

but then the states, if they want to add extra safeguards to protect their citizens, federal benefits, have to pay for those with GRF.

And so there are some things that we could do, you know, going to chip cards and those kinds of things that will help further protect, but whether it's unemployment, whether it's snap, whether it's my credit card or your bank statement, the bad guys are always trying to take advantage.

And so we have to spend money to try to stay one step ahead of them.

And finally, there was an expansion of state government in the budget in the addition of the new Department of Children and Youth and you'll be working with that department and its director, Cara Wendy, tell me a little bit about what that department's going to do that doesn't duplicate what you already are doing with children and youth.

Yeah.

So, you know, expanding state government in the sense of adding another cabinet office.

but really it was just a lift and shift of individual state employees and programs from six existing state agencies into a new one.

most of those individuals came from JFS, where we had, publicly funded child care, child care licensing, and, and the children's services system for the state.

and so all of those programs are now migrating over to Karen's team at the Department of Children, Youth.

And I think really the goal of governor DeWine, when when he set this up, and proposed this in the budget, is, you know, making sure, that we have, an individual, a department who wakes up every day.

And that's all they think about, are Ohio's kids.

you know, from a JFS standpoint, we think about unemployment, and food stamps and, all kinds of other things in addition.

But really, having this one agency will pull all of those functions from six agencies.

You know, the example that we use a lot during the budget was, you know, if an individual is creating, starting a child care program, you know, they're potentially interacting with JFS around eligibility, they're potentially impacted working with old age, around food standards and those kinds of things.

working with ODP, if they are, Head Start program.

And so pulling all those things under one, under one roof, the goal is to create some efficiencies, that are customer facing, and really make sure that that very critical time period of, you know, zero to school age has a department that is, you know, 100% focused on the well-being of that future generation of Ohioans.

Some of the work that O.D., JFS was doing with kids, such as publicly funded child care, has been moved into a new cabinet level office.

The Department of Children and Youth.

Dan Schroeder says that wasn't an expansion of state government as much as a shift of employees and programs from six existing state agencies into one.

And that is it for this week for my colleagues at the Statehouse News Bureau of Ohio Public Radio and Television.

Thanks for watching.

Please check out our website at State news.org, or you can find us online by searching State of Ohio Show.

You can also hear more from the Bureau on our new podcast, The Ohio State House scoop.

Look for it every Monday morning wherever you get your podcasts, and please join us again next time here for the State of Ohio.

Support for the Statehouse News Bureau comes from a medical mutual dedicated to the health and well-being of Ohioans, offering health insurance plans, as well as dental, vision, and wellness programs to help people achieve their goals and remain healthy.

More at Med mutual.com.

The law offices of Porter, Wright, Morris and Arthur LLP, Porter Wright is dedicated to bringing inspired legal outcomes to the Ohio business community.

More at Porter.

Right.

Com Porter Wright inspired Every Day and Ohio Education Association, representing 120,000 educators who are united in their mission to create the excellent public schools.

Every child deserves more at OHEA.org,