Labor Dept IG Steps Down Following Pandemic Relief Fund Fraud Warning

The Labor Department Inspector General announced on Tuesday he is retiring from his post effective June 21 amid his office's reviews of novel coronavirus funds.

Scott Dahl, who was confirmed in 2013, was leading the office's slew of investigations into the Labor Department’s coronavirus relief funds use and efforts. He said his decision to step down was long planned due to personal reasons and he was not “told or asked to resign.” A 28-year public servant, Dahl previously had various roles in the IG community and was a corruption prosecutor for the Justice Department's criminal division and a trial attorney in the civil division. It is not clear yet who will take over as acting IG. 

On Monday, Dahl testified before the House Oversight and Government Reform Committee’s panel on operations. He said there is risk for fraud with the Labor Department’s pandemic unemployment assistance program, which totals almost $110 billion. “We alerted the [Labor] Department that states’ reliance solely on self-certification to determine eligibility significantly increases the risk of fraud—and we have seen evidence of this in recent investigations," he said. "DOL should seek clarification from Congress or request legislative action to curtail this fraud."

Dahl was referring to an alert memo his office sent to John Pallasch, Labor's assistant secretary for employment and training administration, on May 26. The IG office asked for a response addressing its concerns by June 2, the day Dahl announced he was retiring from his post. The department did not immediately respond for comment on whether or not it responded. 

Also during the briefing, Dahl said he was “very surprised” the Occupational Safety and Health Administration, a division of Labor, has only issued one citation during the pandemic. “This is something that we're planning on turning our attention to look at [OSHA's] enforcement activities and seeing if they are following their standards, and what can be done to make them more efficient, effective,” Politico reported. 

Last week, a group of senators wrote to Dahl to review OSHA’s actions during the coronavirus outbreak following criticism that the agency is not doing enough to protect workers. “The [Office of Inspector General] has already announced reviews involving OSHA’s guidance to workplaces for preventing exposure to COVID-19, as well as a review of OSHA’s actions taken to address COVID-19 related whistleblower complaints,” a Labor IG spokesperson told Government Executive when asked for comment on the senators’ letter. “As is our practice, we will consider input from Congress, the department and other stakeholders, as appropriate.”

In a statement announcing his decision to retire, Dahl said: “For seven years, it has been my greatest professional honor to work with an outstanding team at the Office of Inspector General on the extremely important work they do for the American public. Inspectors General as independent watchdogs serve a critical role in our democracy, shining a bright light on government to protect the taxpayers’ investment.” 

Labor Secretary Eugene Scalia also issued a statement on Tuesday wishing Dahl well. “For seven years, Scott Dahl has helped improve the integrity and quality of the Department of Labor’s programs,” he said. “The department and the people it serves have benefited greatly from his contributions. We wish Scott and his family the very best in the future.”

Dahl’s departure will come after several months of high-profile IG firings and sharp rhetoric from the president about inspectors general.