Delaware agencies give more details on $181K state employee embezzlement as lawmakers press them over lack of transparency

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Delaware’s General Assembly is considering holding hearings or establishing a task force to track embezzlement after a former state administrator stole more than $181,000 from the unemployment insurance fund in 2023.

Lawmakers received letters Tuesday from the Departments of Labor and Finance and the Auditor of Accounts addressed to the legislative leaders acknowledging state lawmakers’ oversight responsibility while arguing that not disclosing the embezzlement of taxpayer funds was the right move. The letters follow an investigation by WHYY News in May that found the state never revealed the theft publically.

The letters offer more details about the steps agencies took after the discovery of the theft and promise to deliver a report with more information in July. They also criticized press reports for causing “confusion.”

The Delaware Coalition for Open Government (DelCOG) is calling on the General Assembly to hold oversight hearings into the theft; they’ve also accused two state agencies of violating the law by not including the information in recent reports.

DelCOG Board Member John Flaharty said the letters fail to provide enough transparency or accountability to the public.

“The only confusion is why they haven’t followed state law,” he said. “And why they didn’t disclose this embezzlement in a timely fashion over a year ago was when this happened.”

A Department of Labor spokesman did not respond to a request for an interview of Hubbard or an attempt to get more information about the letters, including questions about communicating transparently with the public and whether the July report will be made public.

“As noted in the letter to legislative leadership, the Department of Labor and the Department of Finance are committed to ensuring that the General Assembly has accurate information and access to a full accounting of findings and actions to date and our recommended path forward,” DOL spokesperson Alejandro Bodipo-Memba said.

WHYY’s reporting also showed that Brittingham, who started with the DOL in February 2019, had been promoted into supervisory roles despite a felony conviction later that year for stealing more than $42,000 from his homeowner’s association.

Brittingham took his own life shortly after being placed on administrative leave.

The DOL previously confirmed that the police investigation has ended and the funds have not been recovered.

Senate Republicans released a statement last week saying they agreed with DelCOG and called for a legislative branch investigation. They also said they had met with the DOL and the Division of Unemployment Insurance’s administrative team.

“While we appreciate the department’s openness and willingness to meet, we believe, as elected leaders, that we must perform a separate inquiry to both rectify the issue and reestablish trust between the Department and the public we serve,” the release said.

House Republicans had no comment then. But Wednesday, Minority Leader Mike Ramone said he would support a task force that would look at the embezzlement by Brittingham to see what can be done to prevent it from happening again.

“And my concern is that the voters, the taxpayers, looking at this … it shakes confidence,” he said. “We should be looking into it, that’s our job. If we look in and find more, we don’t not look into so we don’t find more, we look into it [to] see if there is more. If it’s there, we expose it and we create barriers, so it can’t happen again.”

Democratic leaders, including House Speaker Valerie Longhurst and Senate President Pro Tempore David Sokola, said the letters provided new details and that they would read the July report before evaluating whether more action was needed.

“The legislature takes its oversight role seriously, and upon receiving the promised Department of Finance report, may consider calling a joint Labor Committee hearing to review the findings and ask additional questions,” the joint statement read.

Flaherty said they are repeating their call for a hearing.

“I think what we need to have is some kind of oversight hearing where we can get to the bottom of this and they can come and they can testify under oath about what they did, and why they felt that comply with state law,” he said.

The DOL and the DOF said in the days after discovering the theft, it was reported to the State Auditor, State Police, Delaware Department of Justice, federal DOL Inspector General and lawmakers on the Unemployment Compensation Advisory Council.

Council Chairman Rep. Ed Osienki said he was informed shortly after the embezzlement was first under investigation by DOL Deputy Secretary Rachel Turney, but was told it was not public information. Osienski said he doesn’t know if other lawmakers on the Council were told. Requests for comment to Sens. Jack Walsh, Spiros Mantzavinos were not immediately returned.

Gov. John Carney told WHYY News last month that State Auditor Lydia York was conducting an ongoing investigation into the former state worker’s theft. York’s letter to lawmakers confirmed its existence and said under her office’s supervision, the DOL and the DOF are reconstructing Fiscal Year 2023 UI accounting records so her investigation into the theft can continue and the unemployment trust fund can be audited for that year.

The Auditor of Accounts and the Division of Accounting, which is under the DOF, put out a few audit reports earlier this year. Those included the annual comprehensive financial report for Fiscal Year 2023, a special report explaining why the unemployment insurance trust fund was “unauditable” for FY23, and an audit of federal assistance programs. None of them mentioned the embezzlement.

York’s special report called out an ongoing lack of “robust internal controls” over the fund.