This week, Washington’s Employment Security Department welcomed about 50 National Guard troops assigned to help the agency process thousands of delayed unemployment claims.

But the agency’s ongoing problems with claims, which have ballooned as a result of massive layoffs, impostor fraud and technical issues, will likely need more than the National Guard to fix.

Reports continued to surface Friday that the bank accounts of some workers seeking jobless benefits were being frozen. And questions are being raised about long delays in the process of appealing denied claims, while some claimants may be able to use influential connections to expedite their benefits.

As of Friday, more than two dozen people had reported that their Chase bank accounts, into which the Employment Security Department (ESD) had made deposits, were closed and their funds temporarily frozen. Often, the closures came after account holders had spent weeks trying to prove to ESD they weren’t part of the fraud that has siphoned off up to $650 million in jobless benefits.

In one case, bank accounts of five family members near Tacoma were closed even though only three had filed for state unemployment benefits, the family told The Seattle Times.

In another case, a Renton resident had his Chase account closed even though his unemployment claim had actually been filed by fraudsters. “They even locked our 18-year-old’s high school account that my husband had no access to,” said Deborah Rosenfelt, whose husband, Drew, had his account closed.


Both Chase and ESD declined to comment about specific cases.

The Chase debacle comes as the ESD was already taking heavy criticism for other problems.

The agency has yet to resolve benefits claims for roughly 81,000 individuals who have applied for jobless benefits — in some cases, as far back as March, when COVID-related layoffs began — but have yet to receive any money.

Others who have had their unemployment claims denied by ESD say the agency is now intentionally delaying their requests for an appeals hearing.

But not everyone is having to wait for their benefits. Hundreds and possibly thousands of workers appear to be getting their claims prioritized with help from state legislators, union officials or even agency officials.

The process, sometimes called “elevation,” has operated for decades, ESD officials acknowledge. But some observers say elevation may not be appropriate when so many workers are having to wait for their benefits –especially if the ESD is using it to curry political support with unions or lawmakers.

“The department definitely seems to think that providing what they’re calling elevation pathways is the way to keep people happy,” said Sage Wilson, spokesperson for the labor advocacy group Working Washington.


The controversies come as ESD struggles with two massive and often conflicting goals: delivering unemployment benefits to hundreds of thousands of workers left jobless by the COVID-19 pandemic, while avoiding more fraud.

As a result, even as ESD has rushed to speed the processing of claims by hiring more staff and contractors and bringing in National Guard troops, the agency also slowed processing to check the identities of individuals.

Those efforts have yielded some success. ESD officials say most of the nearly 200,000 claims were flagged in May for possible fraud had been resolved by Friday. And $350 million of the estimated $550 million to $650 million stolen has been recovered, ESD Commissioner Suzi LeVine announced Thursday .

But those successes continue to be overshadowed by a series of problems.

Last week, ESD acknowledged that technical problems with its processing system resulted in claimants who had already undergone identity verification being asked to resubmit proof of identity.

LeVine said the agency was “working toward resolving this quickly with our vendor.”


But this week’s Chase debacle might suggest that all technical glitches haven’t been fixed.

Many of those with frozen Chase accounts say they were told by bank officials that the closures came after the financial institution was notified of fraud issues by ESD. Worse, they come after account holders say they already supplied ESD with documents proving their identity. In some cases, they said ESD notified them that their identities had been verified.

“We literally can’t pay our bills,” said Tacoma-area resident Allyson Smith, who, along with her husband and three kids all had their Chase accounts frozen after three family members spent weeks trying to prove their identity to ESD. “Chase is treating us as if we are criminals.”

ESD officials, citing the ongoing fraud investigation, declined to comment on whether the agency had asked Chase to shutter the accounts. “When someone reports imposter fraud in their name or a claim is determined fraudulent, we take a number of steps to stop the fraud and avoid continuing to pay fraudulent claims,” said ESD spokesperson Nick Demerice.

“As a part of … stopping funds from going out, we notify banking partners who then take action,” Demerice said.

ESD’s anti-fraud efforts have had other impacts. LeVine has acknowledged that the heavy fraud focus has slowed efforts to resolve other claims that are on hold.  


Some labor experts and worker advocates say that backlog of suspended claims should never have been allowed to get so large.

While most acknowledge that ESD is facing an unprecedented number of layoffs–and doing so with budget set before the pandemic hit–some say the agency could have moved faster to expand its claims-processing capacity.

“I can’t imagine the governor or the state legislature, who are inundated with these calls [from desperate claimants] would not … appropriate funding to hire professional, competent staff who can manage claims, not National Guard volunteers,” said John Tirpak, executive director of the Seattle- and Spokane-based Unemployment Law Project, which represents workers with denied claims.

Tirpak is also concerned that when workers whose unemployment claims are denied by ESD want to appeal the decision, the agency has been slow to forward those requests to the state’s Office of Administrative Hearings.

“ESD is sitting on thousands of hearing requests,” Tirpak said in an email Thursday.

One of those who has been on hold is Daniel Oliver, a 36-year-old unemployed cabinet maker and father of four from Cheney who was laid off in March.
Oliver says his unemployment claims were denied by ESD and in May he requested a hearing to appeal that decision. But ESD still hasn’t forwarded that request to the Office of Administrative Hearings, says Oliver, who says he and his family are living on about $20 a day earned mainly from odd jobs. “It’s really a mental wreck inside my head,” he says. 


Demerice, the ESD spokesperson, did not respond to a request for comment about its policy regarding request for hearings.

Lorraine Lee, chief administrative law judge for the Office of Administrative Hearings, said her agency currently lacks enough judges to handle a substantial increase in ESD appeals.

She said she has been “preparing for [a possible increase] in terms of hiring more folks on a temporary basis,” but is waiting to “get some indication from ESD that this is what they’re projecting.”

But so far, ESD officials have talked to her about the possibility of more hearings in the future only “very generally,” Lee said, and “not ‘how many appeals might we get in over the next month’, for instance.”