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Thomas C.
Former Republican OK
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    Nomination of Antony Blinken to Be Deputy Secretary of State

    by Former Senator Tom Coburn

    Posted on 2014-12-16

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    COBURN. Mr. President, I hope not to use all our remaining time. But I come to the floor to talk about an issue that should be very important to every American.



    In less than 20 months, the Social Security Disability system will be bankrupt--out of money. That may sound [[Page S6890]] like just a scare tactic, but that is what the trust fund trustees say. And we have known this for some time.

    My colleague Carl Levin, as chairman of the Permanent Subcommittee on Investigations, and myself as ranking, have spent a great deal of time oversighting Social Security disability. We issued a report that had some pretty remarkable findings in it. I thought I would go through some of those findings today, because I have two major concerns.

    One is that those people with true disabilities are going to see in 18 months a 20-percent cut in what they get paid each month, and they are barely surviving on the disability payments we give them today.

    The second thing is the failure of the Justice Department, when handed an absolutely, totally perfect case to prosecute criminals taking advantage not only of people with disabilities but other people of this country.

    Social Security disability insurance is an important safety net for a large number of people--about 11 million--in this country. In the past 5 years, we have gone from 11 million to 14.1 million applications for disability--some of that is associated with our recession, but some with true injury.

    We started out very meticulously as we looked at this, and I wish to applaud some of the employees of the Social Security Administration because they were the ones who highlighted to me--people who worked in the Oklahoma City Social Security office--the lousy quality of what was happening as these were being processed.

    So what we did is we went to the Social Security Administration and we asked them to randomly select 300 case files--100 each--from 3 different geographical locations throughout the country. That included Oklahoma County, in my home State.

    What we looked at was a large random number of cases, most of them drawn from decisions made by the Social Security Administration's 1,500 administrative law judges.

    What we found, using Social Security's own criteria, was that 25 percent of the cases were decided absolutely erroneously, according to their own rules and their own guidelines.

    But that didn't surprise the Social Security Administration, because they had been looking at it all along and they knew that, according to their records, 23 to 24 percent of all the cases had been being decided erroneously.

    Our second step was to look where we saw this abuse at the highest, and that was in the Huntington, WV, Social Security Disability Hearing Office. So Senator Levin and I set our investigators about doing a total and comprehensive investigation of that office.

    The problems we found there were similar to the problems we found in our prior investigation in these three other offices, except much worse. The Huntington office got our attention in part because it processed more disability cases than almost every other Social Security office in the Nation--much of that to just one attorney by the name of Eric Christopher Conn.

    Despite practicing in a town of only 500 people, Mr. Conn had become the third highest paid disability attorney in the entire United States. He helped thousands of people get on to the disability program, and in 2010 he received $4 million in payments from the Social Security disability program. The only other attorneys receiving more from SSA were Charles Binder of Binder and Binder--who, I noticed, filed bankruptcy this week--who received $22 million; and Thomas Nash of Chicago who received $6.3 million.

    When we looked more closely at Mr. Conn's operations, what we found were reasons for serious concern. While some of what Mr. Conn did involved outright fraud--which we have documented and proven--at times he was simply able to exploit loopholes in Social Security's system. Both of those things should be a concern to Congress.

    To ensure the cases were approved and his attorney fees kept flowing, Mr. Conn colluded with an ALJ in the Huntington office by the name of David B. Daughtery. The two men worked together to award hundreds of millions, if not billions, of dollars in fraudulent disability claims. This is an administrative law judge.

    The plan involved several calculated steps. First, Judge Daugherty needed to ensure that Mr. Conn's cases were assigned to him. Normally, agency rules require cases to be assigned to the ALJs on a rotational basis, with the oldest case being assigned to a hearing date first. This way, no one administrative law judge receives too many of one attorney's cases.

    Judge Daugherty, however, would at times intercept Mr. Conn's cases and assign them to himself. If cases would slip past him and get assigned to another judge, Judge Daugherty would inappropriately go into the computer system and move the case to his jurisdiction.

    The next step in the plan involved Judge Daugherty calling Mr. Conn's office every month to let them know what kind of additional evidence he needed for each client to be able to award disability benefits. Judge Daugherty started the monthly call by relaying the name and Social Security number of each person he was ready to approve. He would then say whether the new piece of evidence should relate to a mental or a physical medical impairment. The list of claimants would then be typed up by employees in Mr. Conn's law firm. Mr. Conn's staff referred to these monthly lists as the DB lists--the David B. Daugherty list.

    We reviewed these DB lists, every one of them, from June 2006 through July 2010. Each list contained as many as 52 names each month. In total, the DB lists from that time period contained the names of 1,823 claimants who were all approved for disability benefits.

    After Judge Daugherty told Mr. Conn the kind of medical evidence he needed, the next step shifted to Mr. Conn to ensure a doctor provided that evidence. Fortunately for Mr. Conn, he had a crew of doctors in his pocket, ready to provide what he needed.

    To find doctors willing to go along with him, Mr. Conn searched the Internet for ones with checkered pasts. The doctors Mr. Conn used often had histories of malpractice and some had medical license revocations in multiple States. In fact, Mr. Conn's ``go-to'' doctor was the subject of numerous malpractice lawsuits and even had his medical license revoked and suspended in several States. Mr. Conn scheduled the DB list of claimants to be seen by his doctors. The doctors spent as little as 15 minutes evaluating each claimant and sometimes saw 35 to 40 claimants a day. Mr. Conn paid the doctors that he knew $500 for each claimant they saw.

    The doctors would complete a form used by the agency to determine a claimant's residual functional capacity to work in any job available in the national economy. While the evidentiary forms provided by the doctors were supposed to be specifically tailored to the physical or mental impairments of each client, all of Mr. Conn's forms were the same. They were prefilled out. He had 15 versions of the physical form and 5 versions of the mental form that were rotated among the clients. As a matter of fact, a committee determined that 97 of Mr. Conn's claimants approved by Judge Daugherty had exactly the same residual functional capacity--a statistical impossibility. It could not happen.

    Mr. Conn would then submit the RFC forms--the residual functional capacity forms--with a brief description of the claimant to Judge Daugherty. Judge Daugherty would then approve the claim for benefits in an abbreviated decision, determining the evidence presented by Mr. Conn outweighed all the other evidence in the claimant's medical file. At times, the medical evidence Judge Daugherty ignored could be thousands of pages long.

    The plan made Mr. Conn millions. In 2010 SSI paid Mr. Conn almost $4 million in attorney fees, making him the third highest-paid attorney in the country. In turn, he paid out almost $2 million to the doctors who were giving the unscrupulous, ill-advised, and absolutely erroneous premanaged outcomes. Judge Daugherty, mysteriously, under our subpoenas had received some $100,000 in unexplained cash deposits into his bank accounts during this time. But Judge Daugherty wasn't approving just Mr. Conn's cases. In the last 5 years of working for the agency, Judge Daugherty awarded more than $2.5 billion in disability benefits. During that period, he approved more cases then any other ALJ in the entire United States.

    There was another judge, Chief Judge Charlie P. Andrus, who played a major role in approving the fraudulent [[Page S6891]] claims. He allowed Judge Daugherty to decide a high number of claims. He and Judge Andrus enjoyed accolades and national recognition. The Huntington office rose to have the second fastest processing time in the entire country. No wonder--they didn't actually process claims. It was a slam dunk. You get under Judge Andrus, you get under Judge Daugherty, you get Eric Conn, and you get approved--no matter whether it is true or not. Mr. Andrus, as the acting superior judge, did nothing to stop Mr. Conn and Judge Daugherty. He actually colluded with Mr. Conn to target a whistleblower from his own office.

    The second thing I would note about Judge Andrus was he was not truthful in his testimony before the committee under oath, and we have evidence of his lying to the committee under oath.

    When all of this was exposed, the agency put Judge Andrus on paid administrative leave and filed a claim with the Merit Systems Protection Board. That was in January of 2013.

    In 2014 Mr. Andrus voluntarily retired according to a decision from the Merit Systems Protection Board. The complaint the agency filed against Mr. Andrus charged him with conduct unbecoming an ALJ; engaging in an apparent conflict of interest; lack of candor; and unauthorized disclosures.

    Despite these charges, as part of the settlement agreement, the agency agreed to refrain from pursuing any disciplinary action against Andrus and to provide a neutral reference to prospective future employers. Andrus retired with his pension. So a crook retires with their pension. So no disciplinary action is taken against Charlie Andrus, even after he turned a blind eye for years and allowed Judge Daugherty to award billions of dollars in disability benefits, admitted he conspired to retaliate against an employee, and was untruthful to Congress under oath. Nor has the Department of Justice taken any action against Mr. Conn or Judge Daugherty. In fact, Mr. Conn continues to represent disability claimants before the Social Security Administration--these two men who actively committed fraud on one of the most important safety net programs our government runs.

    We should not let the actions of these individuals go unpunished. But that is what is happening. I recently had a visit with the IG from the Social Security Administration, Mr. Patrick O'Carroll. At this point the U.S. attorneys in West Virginia and Kentucky had both recused themselves and declined to prosecute Mr. Conn. Now I wonder what he has over them. I wonder what it is when you have a closed case--a prosecutorial case that you have to do no work on--and the U.S. attorneys will not prosecute a thief of the highest order. Since both U.S. attorneys recused themselves, Mr. O'Carroll is now trying to convince the Criminal Division of the Department of Justice here in Washington, DC, to take action. But to date no charges have been filed against Mr. Conn, Judge Daugherty or Judge Andrus.

    If they do not take action against Mr. Conn, the Justice Department is sending a message that disability fraud will go unpunished. We need to be sending the opposite message--that these types of fraudulent practices by attorneys like Eric Conn must be prosecuted to the fullest extent of the law--otherwise the disability program, no matter how much oversight we do on it, will continue to be abused, leaving those Americans who have no choice but to rely on it with less than what they expected.

    I would add one final statement. In working with a lot of the disability community, we introduced this week what we hope the Congress will take up in future years as a reform to the disability program that takes the fraud out of it--the opportunity for fraud--that takes the ability actually to hold people accountable and also gives back the dignity to those who can get back to work and uses that to help them accomplish that goal.

    I yield the floor.

    The PRESIDING OFFICER. The Senator from Utah.

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