[Excerpt] I am pleased to transmit the 50th Semiannual Report to the Congress on our significant activities, knowing that our recent work furthers the mission envisioned by the Congress for OIGs a quarter of a century ago. The report covers the six-month period ending on September 30, 2003, during which we identified $428 million in funds put to better use and $5.2 million in questioned costs. Moreover, our investigative work resulted in 196 indictments, 136 convictions, and over $24 million in monetary accomplishments.
During this reporting period, the Department of Labor’s (DOL’s) OIG completed significant audit and investigative work relating to the Unemployment Insurance (UI) program. Our audit of the DOL system used to monitor UI overpayments found that the system accurately projects overpayments but is not being used by DOL to strengthen controls over benefit payments. We concluded that expediting the implementation of new-hire database connectivity in 10 states, and increasing its use in another eight states, could save the Unemployment Trust Fund an estimated $428 million annually. In addition, OIG investigations highlighted losses resulting from identity theft–related fraud against the UI program. Two investigations cited in this report identified nearly $9 million in fraud by Mexican nontraditional organized crime groups who used stolen identities to obtain UI benefits.
Other accomplishments over the last six months include investigations of fraud against the Department’s foreign labor certification programs. In one such case, an individual pled guilty to visa fraud charges for conspiring to forge alien employment certifications after filing more than 900 such applications with DOL. A related OIG assessment found that the Department’s role in the labor certification process continues to be perfunctory and therefore does little to protect American jobs and workers. In addition, OIG audits and evaluations of employment and training grants identified insufficient documentation of performance data. For example, an evaluation of Workforce Investment Act youth programs found that only 37% of performance measures were adequately documented.
Finally, our labor racketeering investigations resulted in numerous convictions. For example, a former United Public Workers Union state director received five years’ imprisonment and was ordered to pay $428,000 in restitution for embezzling union assets and receiving benefit plan–related kickbacks, among other charges. Two associates of the Gambino Organized Crime Family were sentenced to 30 and 33 months’ imprisonment, respectively, for extorting money from a clothing manufacturer in exchange for labor peace. In addition, the president of Teamsters Union Local 25, who was also a benefit plan trustee, pled guilty to Hobbs Act extortion, conspiracy to embezzle from a benefit program, filing false documents under the Employee Retirement Income Security Act, and other charges.
In our ongoing effort to promote the economy, efficiency, effectiveness, and integrity of DOL programs, the OIG will continue to work constructively with the Secretary of Labor and the DOL team. In so doing, we will help detect waste, fraud, and abuse against programs that serve and protect the rights and benefits of American workers and retirees, as the OIG has done since its creation.