Fired Unemployment Director Testifies About Chaotic Pandemic Response

The former executive director of the Kentucky Office of Unemployment Insurance told legislators Thursday the agency’s chaotic rush to deliver benefits in the early days of the coronavirus pandemic led to months-long delays — and may have violated federal unemployment regulations. 

Muncie McNamara testified before the Interim Joint Committee on Economic Development and Workforce Investment. The Kentucky Center for Investigative Reporting first reported the details of McNamara’s time at the Office of Unemployment Insurance earlier this month; he was hired personally by Lt. Gov. Jacqueline Coleman in January and fired in May, amid the chaos of the pandemic. 

McNamara spoke for almost half an hour about the issues he saw at the agency. After his testimony, Republican lawmakers questioned him about Gov. Andy Beshear’s response, the months-long delays and data security. Only one Democratic lawmaker was called on to ask questions. 

McNamara told legislators that neither he nor Josh Benton, the Deputy Secretary for the Cabinet for Education and Workforce Development, were consulted before Beshear announced a statewide shutdown of in-person business that led to a massive spike in unemployment. 

According to McNamara, Beshear and Benton wanted to quickly extend benefits to independent contractors and other workers who previously wouldn’t have qualified. 

“[Benton] stated he wanted to do this as soon as possible, and he did not want to wait for the feds, the U.S. Department of Labor, to act,” McNamara testified. “He wanted Kentucky to take the lead in this.”

McNamara said that decision to move quickly at the beginning has contributed to the months-long delays for benefits the state is now trying to untangle.

Cabinet Officials Defend Hiring, Firing Of Unemployment Director

Cabinet officials defended the hiring and downplayed the firing of the executive director of the Office of Unemployment Insurance at a legislative hearing Thursday. 

As KyCIR first reported Monday, the executive director, Muncie McNamara, was quietly fired in early May amid a mounting unemployment crisis caused by the coronavirus. 

McNamara was a campaign donor and friend of Lt. Gov. Jacqueline Coleman; she personally called to offer him the job running the Office of Unemployment Insurance in January. 

Josh Benton, the deputy secretary for the Cabinet for Education and Workforce Development, defended that hire to the legislative Program Review and Investigations Committee Thursday. 

“We felt that he met the qualifications for the job, there’s no doubt about that,” he said. Sen. Danny Carroll, a Republican from Paducah, asked whether any of the delays in providing jobless benefits can be traced to McNamara’s inexperience on the job. 

“Every state has had complications. Every state has had frustrations,” Benton said. “So to fully lay that at any one person’s feet would be unfair.”

Benton described an agency thrown into chaos as unemployment claims skyrocketed amid the pandemic-related shutdowns. The agency went from processing a few thousand claims a week to hundreds of thousands, and the size of the agency’s staff ballooned as employees from other parts of state government came to help out.  

Legislators also questioned Benton — as well as Labor Secretary Larry Roberts and general counsel Amy Cubbage — about the contract the state gave Ernst and Young to help process claims. The $7.6 million no-bid contract is set to expire in three days, though Cubbage said they are considering extending it because the workers are already trained in the system. 

Benton and Cubbage also addressed a data breach that was first identified at the unemployment office in late April, which was not reported to the proper authorities until nearly a month later.