Two state workers fired for expediting a former colleague’s jobless-benefits claim

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Two state workers were fired this year for allegedly helping a former colleague collect unemployment benefits in the midst of an unprecedented surge in jobless claims.

In an unusual twist, all three of the workers were then awarded unemployment benefits paid out by the same agency that fired them.

State records show Bradley Butin of Ankeny and Theodore Johnson of Des Moines were working in Iowa Workforce Development’s unemployment insurance division this year shortly after the COVID-19 pandemic triggered a huge spike in the number of Iowans filing claims for unemployment benefits.

While there, both men were trained in policies that prohibit the state agency’s employees them from working on, or even accessing, the unemployment claims filed by family members and former coworkers.

On April 19, Johnson was contacted by Kristi Zeransky of Redfield, who had been fired by IWD just three weeks earlier, in part for allegedly sleeping on the job. Johnson had once worked with Zeransky in the same Iowa Workforce Development office, and she was calling about her claim for unemployment compensation, which had yet to be approved.

State records show Johnson called up Zeransky’s confidential unemployment claim, then initiated a Google Chat conversation with Butin, writing, “she was one of us,” and “its been 4 weeks.”  Butin replied that he could “unlock” — essentially, approve — Zeransky’s claim for immediate payment, but pointed out she might have to repay the money if it later turned out she wasn’t entitled to the benefits. Johnson replied, “Do it — she understands.”

Butin then authorized Zeransky’s claim for immediate payment, without reporting that action to his superiors. The next day, Butin allegedly accessed his father’s unemployment claim in an effort to straighten out some issues with that claim. He consulted with a supervisor who cautioned him in writing, saying, “Brad, please do not help your father with his claim. That is a clear conflict of interest. Please forward his information to me and we will have someone else handle it.”

On April 23, Iowa Workforce Development supervisors noticed the approval of the Zeransky claim. Five days later, Butin and Johnson were fired for for violating the agency’s conflict-of-interest policies.

Iowa Workforce Development Director Beth Townsend updates the state’s response to the coronavirus outbreak during a news conference at the State Emergency Operations Center, April 30, 2020, in Johnston, Iowa. (Photo by Charlie Neibergall/AP, pool)

That same week, IWD Director Beth Townsend sent the staff a memo saying, “Under NO circumstances should you open, adjust, review, alter or affect in any way claims of people who are your friends, family members or neighbors or an individual who asks you to do something for them as a favor. If those claims or questions come to you, you must immediately decline such requests and refer them to another employee or your supervisor. Taking such action is viewed as unauthorized access to our files and will led to disciplinary action up to and including termination. Unauthorized access is nonnegotiable offense, per our work rules.”

Butin then submitted his own claim for unemployment benefits. It was granted when Iowa Workforce Develpment determined there was no evidence Butin’s actions were “willful or deliberate.”

The department then appealed its own decision in the matter, with the case going to an administrative law judge for consideration. At the hearing, Iowa Workforce Development argued Butin intentionally violated the policy because he had to be aware of the prohibition on assisting friends, family, and former coworkers with claims. Butin argued that although he had violated the policy, it was an honest mistake and the result of never having dealt with the conflict-of-interest rules in years past.

Administrative Law Judge Jonathan M. Gallagher found that a review of the Goggle Chat log suggested Butin wasn’t aware he had approved Zeransky’s claim for payment and had done so only inadvertently. As for Butin’s father’s claim, the messages indicated Butin ultimately deferred to the supervisor who had warned him about handling his father’s claim.

Citing a lack of evidence pointing to “malevolent intent,” Gallagher ruled Butin was “acting in good faith” and affirmed IWD’s previous decision awarding Butin unemployment benefits.

As for Johnson, his claim for unemployment was initially denied by Iowa Workforce Development, but he won the case on appeal to Administrative Law Judge Carla J. Hamborg, who said the Google Chat log showed it was Butin, not Johnson, who offered to approve, and then did approve, Zeransky’s claim. Johnson’s conduct, she ruled, was “an error in judgment” that didn’t warrant the denial of benefits.

And as for Zeransky, the Iowa Workforce Development employee fired for sleeping on the job, her claim for benefits eventually went before Administrative Law Judge Laura Jontz, who ruled in her favor.

Jontz noted that although Zeransky was photographed appearing to sleep during a staff meeting, “individuals often have their eyes closed in pictures at moments when they were not asleep.” Jontz noted that IWD had provided no testimony or affidavits from the person who took the photo.

Clark Kauffman
Deputy Editor Clark Kauffman has worked during the past 30 years as both an investigative reporter and editorial writer at two of Iowa’s largest newspapers, the Des Moines Register and the Quad-City Times. He has won numerous state and national awards for reporting and editorial writing. His 2004 series on prosecutorial misconduct in Iowa was named a finalist for the Pulitzer Prize for Investigative Reporting. From October 2018 through November 2019, Kauffman was an assistant ombudsman for the Iowa Office of Ombudsman, an agency that investigates citizens’ complaints of wrongdoing within state and local government agencies.