Major Changes at Ohio BWC

Investment gaffes and scandals at the Ohio Bureau of Workers' Compensation (BWC) have precipitated a major shake-up within the agency, including the resignation of former Administrator Jim Conrad and the forced resignation of former Chief Financial Officer Terry Gasper.

Ohio Gov. Bob Taft on June 3 appointed Tina Kielmeyer, a 23-year veteran of the agency, to replace Conrad as the bureau's interim administrator.

Taft who has come under fire from Ohio Democrats for his alleged involvement in investment decisions that have cost the Ohio BWC several hundred million dollars has assembled what he's calling a "management review team" to examine every investment made by Ohio BWC. That team is being led by Ohio Lottery Commission Director Tom Hayes and also includes Laurie Fiori Hacking, executive director of the Ohio Public Employees Retirement System, and James Nichols, treasurer of Ohio State University.

BWC on June 24 announced that Chicago-based consulting firm Ennis Knupp & Associates has been hired to assist the team with its review.

The bureau's investment activities also are part of an investigation by Ohio Inspector General Tom Charles, which began when word surfaced that a rare-coin fund managed by a prominent Republican fundraiser is missing $13 million of Ohio BWC money.

In other developments, Taft has proposed taking investment portfolio management out of the purview of the BWC Oversight Commission which currently oversees BWC benefits administration and investments and creating a separate, independent board whose primary objective would be to monitor Ohio BWC's investment activities.

Taft is proposing that the board have seven members, five of whom would be investment or financial management experts. The other two members would come from the BWC Oversight Commission.

"Culture of Corruption"

Members of the BWC Oversight Commission have faced criticism for allegedly neglecting their legal requirements to monitor bureau investments.

Ohio AFL-CIO President Bill Burga, who is a member of the commission, counters that there's a "culture of corruption" at BWC and throughout the Ohio government, pointing to allegations that some of the investment managers responsible for losing millions of BWC money have political connections. He told Occupational "the whole thing just stinks to high heaven."

Burga said the only reason he agreed to join the Oversight Commission which, by law, must have a representative from labor was "to protect working men and women by ensuring that the bureau did its job properly."

"In return, it is now clear that through two Republican administrations, I have been misled, misinformed and otherwise kept in the dark concerning the bureau's investments, the safety of those investments and the monetary losses that have occurred," Burga said. "To say I am damn angry about it is a gross understatement."

Burga, who insists Taft and Ohio BWC "cannot be trusted to give current Oversight Commission members the information they need to be effective watchdogs," is calling for legislation that stops "pay-to-play" politics by prohibiting companies and individual with state contracts from contributing to political candidates, officeholders or parties.

Meanwhile, Taft is pointing fingers at Ohio BWC, which he said "has repeatedly failed to prudently and safety manage its investments."

"In order to provide injured workers and employers the peace of mind they deserve, responsibility of investments should be completely removed from the bureau," Taft said.

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