U.S. Department of Labor wants Branstad administration to clean up Teresa Wahlert's mess

The U.S. Department of Labor’s Employment and Training Administration has given Iowa Workforce Development Director Beth Townsend a list of tasks to “strengthen Iowa’s compliance with Federal law” and address various concerns about the actions of Teresa Wahlert, Townsend’s predecessor.

It’s another sign that while Wahlert may not be Governor Terry Branstad’s worst appointee during his current administration, she’s a solid contender.

Branstad appointed Townsend, previously director of the Iowa Civil Rights Commission, to run Iowa Workforce Development in January. The Iowa Senate hasn’t yet taken up her nomination, but she is expected to be confirmed unanimously or nearly so. Wahlert was highly unpopular among Senate Democrats. In announcing her retirement, Branstad never acknowledged the many concerns raised by former administrative law judges or state senators who investigated her management of Iowa Workforce Development.

In contrast, federal officials at the Department of Labor take those matters seriously. The full text of Unemployment Insurance Administrator Gay Gilbert’s March 5 letter to Townsend is available here (pdf), along with supporting documents. In particular, Gilbert asked Townsend to:

• Immediately fill the Chief [Administrative Law Judge] position on a merit staffing basis.

• Ensure that the [unemployment claims] appeals process is insulated from outside pressures that might compromise the process’s fairness and impartiality or the appearance of fairness and impartiality

• Ensure that ALJs are free from actual or perceived intimidation.

• Review any negative personnel actions received by ALJs during the period the ALJs were supervised by Teresa Wahlert to determine if the action was appropriately taken and take any necessary remedial action to reverse the action if not appropriately taken.

• Not take any personnel action against individual ALJs related to their possible participation in the review of this matter moving forward.

Gilbert asked Townsend to respond to the letter within 30 days. Cleaning up the mess Wahlert left at Iowa Workforce Development will be quite an undertaking. Even assuming Townsend carries out all of the Department of Labor’s requests, Wahlert’s legacy will live on until the three lawsuits filed over her management are resolved.

Any relevant comments are welcome in this thread. I enclose below a statement Democratic State Senator Bill Dotzler released yesterday.

UPDATE: Wahlert commented to the Des Moines Register’s William Petroski:

Wahlert said in an interview Monday night that she had sought late last year to make a position merit-based to replace the chief administrative law judge, but she was overruled by Iowa Department of Administrative Services Director Janet Phipps, Iowa Department of Management Director David Roederer, and Branstad chief of staff Matt Hinch.

“I knew quite clearly how disappointed the Department of Labor was,” Wahlert said. “But I was certainly not the one – and I can prove it by the paperwork – that made it an at-will position. I tried to explain to all the other folks involved with this about how important it was that this be a merit-based position.”

Wahlert said some administrative law judges agreed with her management of the agency. She contended her detractors were unhappy because she held them accountable for job performance goals required for federal funding and because she made them work at least part time in the office and attend staff meetings She added that there is “no question” that Dotzler had a personnel vendetta against her.

Petroski also quoted a statement from the governor’s office:

“The governor appreciates Teresa Wahlert’s service to the state as director of Iowa Workforce Development (IWD). The governor looks forward to Beth Townsend’s leadership at IWD and believes she will take the necessary steps moving forward,” [Branstad communications director Jimmy] Centers said.

From a March 16 Iowa Senate news release:

On March 19, 2014, I wrote Gay Gilbert, the Administrator of the federal Office of Unemployment Insurance Employment and Training Administration of the US Department of Labor.

In my letter, I said I was “especially concerned” that Theresa Wahlert, then the Director of Iowa Workforce Development, was “directly interfering in the independence of the Administrative Law Judges.”

I warned that instead of “upholding the integrity of an impartial hearings process, Director Wahlert has exerted undue pressure on the Administrative Law Judges.”

My letter concluded:  “The bottom line is that Director Wahlert is intentionally interfering with the neutrality and basic fairness of the appeals system in an effort to favor employers over employees.  Federal law prohibits such interference.”

At the time, Governor Branstad denied there were any problems with Director Wahlert’s leadership.  Instead, Iowa’s Governor accused legislators of engaging in “Washington-style politics.”

During today’s Senate Labor Committee meeting, Beth Townsend, the current Director of Iowa Workforce Development, disclosed that she has received the results of the Department of Labor’s investigation.

Here’s the short summary of the federal investigations: My concerns and the concerns of Workforce Development employees and those of workers across the state were justified.

The investigation confirmed that there was intimidation from Theresa Wahlert and others on Administrative Law Judges to rule against Iowans seeking unemployment benefits.

It also confirmed that then Director Wahlert had illegally replaced an independent Chief Administrative Law Judge.­­­­

Today, I call on Governor Branstad and Director Townsend to respond to the findings of this investigation, to clean up this mess, and give Iowans the fair shake they deserve.

The Department of Labor is requiring the Branstad Administration to address concerns uncovered by the investigation within 30 days.

  • Dotzler also made remarks this morning

    I tuned in a bit late when the Senate gaveled in, so I didn’t catch it all, but it sounded like he’s giving Townsend a chance.

    Still, the letter’s dated March 5 — that’s not much time left on a 30-day response. And it doesn’t mention the ALJ who retired early, or the one that Townsend fired, so clearly DOL still doesn’t have all the important facts.

    Hope someone files an Open Records request and publishes the response that IWD files with Department of Labor.

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