Initial review finds 15 employees suspected of Irene fraud

The administration of Gov. Dannel P. Malloy gave state agency heads Wednesday the names of 15 state employees suspected of obtaining Irene disaster aid through "outright fraud," including lying about assets and claiming a dead relative as a household member.

"Based on my administration's investigation, it appears clear that the abuses of public trust involved go beyond simply lying about income," Malloy said in an emailed statement at midafternoon. "In some instances, people lied about assets under their control or even listed a deceased relative as living in the household. Given the information known to us, these were not oversights or honest mistakes.

"This was outright fraud, and it will not stand."

The inquiry is continuing, but state agency heads were given the first batch of names of employees who appear to have lied on applications for aid that was dependent on an applicant's income, household size and uninsured storm losses. The agency heads were notified, because the state intends to begin disciplinary actions as soon as fraud is confirmed, without waiting for a criminal investigation.

Gov. Dannel P. Malloy facing the press.

"If that proves to be the case, we will take steps earnestly, quickly, swiftly and severely," Malloy said told reporters at the state Capitol on Wednesday morning after returning on a red-eye flight from a Democratic governors' meeting in California.

Andrew McDonald, the governor's general counsel, said in the morning that the state had identified no more than 24 employees who appear to have underreported income to qualify for aid, but he cautioned that the number could rise as the inquiry continues. About 800 state employees obtained the federally funded Irene assistance.

A statement setting the initial number at 15 was issued at 3:42 p.m. The administration declined to identify the employees by name, title or agency.

Malloy also responded earlier Wednesday to a WTNH-TV report featuring an anonymous source who claimed that the Department of Social Services, which administered the disaster program, is ill-equipped to stop and detect fraud.

"I can assure you that my administration will take those kinds of reports very seriously," Malloy said, noting that a whistleblower law protects any employees in a position to make similar reports. "Anybody who has any information, please bring it to me."

Malloy was asked if the reports of fraud were embarrassing.

"Sure, for Connecticut, I think it's embarrassing," he replied.

Malloy defended his commissioner of social services, Roderick Bremby, whom he recruited to overhaul a department laboring with an antiquated computer system, for discovering and disclosing irregularities in the aid program.

"First of all, I am proud of the commissioner and how he is conducting himself," said Malloy, when asked if the commissioner could face repercussions. "Let's just stop right there."

A spokesman for the U.S. Department of Agriculture, which funded the program, defended DSS Monday in an interview with The Mirror. The discovery of the apparent fraud was evidence of adequate safeguards, not lax oversight, said Aaron Lavallee, a USDA spokesman.

D-SNAP, the Disaster Supplemental Nutrition Assistance Program funded by federal dollars and run by the state, was designed to minimize red tape, while requiring sufficient oversight to catch fraud, Lavallee said.

"This nutrition assistance program is designed as a rapid response to families in need, and it includes important system controls to safeguard taxpayer dollars," Lavallee said. "The safeguards in place worked, and we will continue to support the state to make sure the program is targeted towards those families who need it the most."

The suspected fraud was discovered by state Department of Social Service employees conducting a federally required review, including a random check of one-half of 1 percent of all recipients, plus a check of every aid recipient employed by the administering agency -- DSS in the case of Connecticut.

State auditors said Monday that of the approximately 800 state employees to obtain aid, 41 were employed at the DSS. In all, 23,726 households with 74,230 people got the aid.

Eligible households were to receive food aid ranging from $200 for a single adult to $1,202 for a family of eight. Applicants had to identify uninsured disaster losses incurred from Aug. 27 to Sept. 25. Qualified losses included lost wages and expenses for temporary shelter, emergency repairs and health care due to the tropical storm that destroyed or significantly damaged hundreds of homes.

The maximum monthly "take-home income and liquid assets" an applicant could have for the covered 30-day period was $2,186 for a single adult, $2,847 for a household of two, $3,272 for three, $3,859 for four, $4,245 for five, $4,753 for six, $5,116 for seven and $5,479 for eight.

The program already was the subject of a review by the state auditors at the request of Sen. Joseph Markley, R-Southington, in response to news coverage of long lines and some chaotic scenes of applicants for D-SNAP outside DSS offices.

During the five-day application period, enough people showed up at many of DSS' regional offices that lines stretched out the door and down the block. Some applicants were served at a community center in Hamden when the nearby New Haven DSS office became overcrowded.

Malloy was unsure today if the state would give a closer look to non-state employees who obtained the aid.

"Let me be very clear. Right now, I know what I am concentrating on," Malloy said. "We're concentrating on state employees, because it's not only having broken the law, but it's this violation of the trust."