Delaware’s Public Integrity Commission won’t investigate alleged impropriety by state officials over embezzlement

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The Delaware Public Integrity Commission has denied a request by the Civic League for New Castle County to investigate whether state agencies created an appearance of impropriety by not disclosing the 2023 embezzlement of the Department of Labor’s unemployment insurance trust fund. The commission went further, concluding there was no appearance of impropriety.

A WHYY News investigation revealed in May that former Unemployment Insurance Administrator Michael Brittingham stole more than $181,000 in federal and state taxpayer funds. Brittingham died by suicide in April 2023, on the day he was placed under investigation.

The state did not disclose the theft publicly until WHYY News contacted them in April of this year after receiving a tip about the embezzlement.

“I’m not sure how or why they tried to keep it quiet other than they don’t want to bring attention to the fact that everything is really screwed up,” said Department of Labor employee Laura Henderson earlier this year. She worked in the unemployment office with Brittingham as a tax manager. “It’s really crazy there, really crazy.”

The Civic League sent an email to the Public Integrity Commission asking for an investigation because it alleged that “the omission of facts and possible concealment from the General Assembly and the citizens of Delaware by Delaware state officials” may violate public trust.

The complaint argued state officials Gov. John Carney, Secretary of Finance Richard Geisenberger, Secretary of Labor Karryl Hubbard and State Auditor Lydia York may have created the appearance of impropriety, collusion and of a cover-up. It also alleged officials appeared to be politically influenced by declining to reveal the theft of taxpayer funds when they discovered it last year.

The Public Integrity Commission administers and implements Delaware’s ethics laws for the executive branch. It issues advisory opinions on whether state employees are in compliance with the code of conduct. The law says the behavior of employees and officers of the state must give the public trust and confidence in government.

League president Charles Stirk said there’s currently a lack of transparency in the executive branch of state government. But it was a last-ditch attempt to get some accountability.

“We knew we were grasping at straws with the Public Integrity Commission,” he said. “To my knowledge, anything that’s ever been referred to them, they found a way not to do something about it.”

Public Integrity Commission Chairperson Ron Chaney did not answer specific questions about how it concluded there was no impropriety after denying the probe request, but said in a statement that the commission reviews and evaluates issues brought before it to determine if violations were committed and gives advice it finds one.

“If we determine that evidence does not indicate or support a finding of wrongdoing, we cannot proceed,” the statement said.

State lawmakers and good government groups expressed outrage upon learning the news that the embezzlement had not been disclosed by the Department of Labor, the auditor and the Department of Finance before it was revealed by WHYY News reporting, with House and Senate Republicans calling for legislative hearings, along with the Delaware Coalition for Good Government.

Stirk said Brittingham’s embezzlement was an open secret among some in state and local government. But it was kept under wraps long after the police investigation ended in August of 2023, more than a year ago.

Delaware Coalition for Good Government spokesman John Flaherty said the public should have been informed when the police investigation concluded.

“There’s a lot of people just very concerned over the integrity of the Unemployment Insurance Trust Fund,” he said. “When you have a theft of $18[1],000 by someone who previously had stolen from a homeowners association and then he got promoted while overseeing the unemployment fund, it lends itself to troubling questions about how government is operating.”

Brittingham was convicted of felony theft during his employment with the Department of Labor for taking nearly $42,890 between June 2018 and April 2019 from his homeowners association and was serving a two-year suspended prison sentence and probation.

Before the embezzlement became public knowledge, the only sign of trouble with the trust fund was a special report by State Auditor Lydia York. The report called the fund “unauditable” because independent auditors could not prove how much money was in the state’s UI trust fund for fiscal year 2023. It came after accounting firm CliftonLarsonAllen issued a “disclaimer of opinions,” meaning it couldn’t rely on the state’s documentation to confirm bank statements that there was about $390 million in reserve.

“We knew from York’s report there were serious problems in terms of the auditability of the fund,” said State Sen. Brian Pettyjohn, R-Georgetown, in May. “But to know there were more problems, including theft of funds from the unemployment fund, which is a fund paid for by our businesses that have employees in the state, it’s really disturbing.”

The Public Integrity Commission reviewed the civic league’s request in August and decided to deny the request because the civic group didn’t have standing, which means they were not injured by the lack of disclosure, and a failure to state a claim over which the commission has jurisdiction.

The meeting minutes show the commission characterized the request as “a request for an investigation into [two state employees] for not contacting the media about an ongoing investigation.” Those employees, according to the decision issued to the civics league, appear to be Hubbard and Gisenberger.

The Public Integrity Commission said in its decision and in the minutes that because the two agency heads reported the theft after it was discovered to other state agencies and the U.S. Department of Labor, there was no attempt to “fool” the public and the agencies could delay informing Delawareans if there were concerns about preserving the integrity of an investigation.

Stirk said the reasoning was typical of the “Delaware Way.”

“Pretend it didn’t happen and move on until the next time, when the exact same thing happens all over again,” he said. “And we’ll pretend that, ‘Oh, wow, this has never happened before.’”

While House and Senate Republicans have pushed for hearings, House and Senate Democrats have said the report given to lawmakers in July by Department of Labor and Department Of Finance made it clear to them it was an isolated incident, with no hearings planned.

Stirk and Flaherty are calling for the creation of an inspector general office. Legislation sponsored by State Sen. Laura Sturgeon to do that stalled in committee earlier this year. She said she plans to introduce a similar bill next year that would create the position to examine wrongdoing, waste, fraud and abuse.

“We don’t have an office where, if somebody makes a complaint and it falls within the purview of the inspector general they would do an investigation and they would publish the results of any findings that you know are of public interest,” she said. “It would apply to all branches of government, every executive branch, including separately elected executives, and the legislature.”

Delaware has two independently elected officials – attorney general and state auditor. These two offices also have the ability to conduct investigations, but Sturgeon and supporters of the legislation argue an inspector general does not overlap the duties of those officials and could look into issues where neither have purview.

New Castle County Executive Matt Meyer, a Democrat, is seeking the governor’s office in November along with House Minority Leader Mike Ramone, a Republican. Both have gone on record supporting the creation of a non-partisan state inspector general.