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Attorneys in unemployment fraud cases join forces, call for state review of AI in government

Unemployment office sign

Attorneys involved in two lawsuits over Michigan’s unemployment insurance debacle say they’ll join forces on those cases in hopes of moving them forward.

An automated computer system, the Michigan Data Automated System (MIDAS) falsely accused more than 40,000 people of fraudulently claiming unemployment benefits from 2013-2015, under Governor Rick Snyder’s administration. Many suffered huge losses as the state garnished wages and tax returns as repayment for the alleged fraud.

Years later, some victims say they still haven’t been compensated. And two lawsuits seeking redress have languished in the courts for years.

Kevin Carlson is an attorney on one of those cases, Bauserman vs. Unemployment Insurance Agency. He says despite the state’s public statements that it wants to make victims whole for the system’s errors, it has thrown up technical and procedural roadblocks to redress in court. Attorney General Dana Nessel’s office recently appealed the Michigan Court of Appeals’ decision that victims can seek damages to the Michigan Supreme Court.

Carlson also says the state won’t admit the false fraud issues were a feature of the automated system, “not a glitch.”

“It had to have been deliberately programmed to find more fraud, because the questions that were being asked of claimants set them up to be trapped by the system,” Carlson says.

Jennifer Lord, another attorney in the Bauserman case, disputes the state’s assertion that it has repaid all victims of the debacle in full.

“Unfortunately, even though the state is making baby steps to give a few people a partial refund, it is vastly overstating the amount that it has paid people back, and it is understating what it took,” Lord says.

Lord points to the “cascading harms” that victims suffered, noting that 1,100 families had to file for bankruptcy after false fraud accusations.

Carmelita Colvin of Detroit says she’s suffered as a result of a fraud determination from 2015. She says the state told her she owed $13,000—about four times more than she ever claimed in benefits—and seized a $3,500 tax refund as repayment.

Colvin challenged that determination in court, and won. But, “I haven’t received any refunds yet,” she says.

Colvin says having the fraud finding on her record also cost her a job as a Wayne County Sheriff’s Deputy. “It affected me because…it felt like I was a criminal,” she says.

In addition to announcing that they would pool resources in each other’s cases, the attorneys also called on Governor Gretchen Whitmer to set up a task force to vet artificial intelligence decision-making systems in government “to eliminate dangerous bias against citizens [and] to guarantee accuracy and fairness.”

“The task force would protect citizens from the use of computer systems as judge and jury, require accountability to the public, and ensure full compensation for all harm caused,” the group said in a statement.

Christian Sandvig, a professor at the University of Michigan’s School of Information and Director of UM’s Center for Ethics, Society and Computing, supports that idea. He researches the idea of “black box” algorithms and automated systems that can generate biased and unfounded outcomes.

Sandvig says many governments have embraced AI systems as a solution to government bureaucracy. “But now, you’re seeing a backlash where people are saying, it may be that some of the AI systems being implemented are actually worsening some of the problems they’re designed to solve,” he says.

Sandvig says some other countries and states have at least started to take steps to address these issues of algorithmic justice, and Michigan should follow suit. “It’s early enough that Michigan can still be a leader in this area, and we can contribute to this conversation,” he says. “We have the expertise, and we’re deploying the systems, but so far we’ve been deploying them, it looks like, blindly.”

Spokespeople for Gov. Whitmer’s and the Michigan attorney general’s office did not immediately respond to requests for comment on the idea of the task force, and the status of the unemployment fraud lawsuits.

CORRECTION: An earlier version of this story contained a typographical error and incorrectly identified Christian Sandvig as Director of UM’s Center for Ethnics, Society and Computing. It is the Center for Ethics, Society and Computing.

Sarah Cwiek joined Michigan Public in October 2009. As our Detroit reporter, she is helping us expand our coverage of the economy, politics, and culture in and around the city of Detroit.
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