Workers' Comp Needs to Have Added Scrutiny

Saturday, September 22, 2007 | 0

A new board of directors appointed by Gov. Ted Strickland to manage the Ohio Bureau of Workers' Compensation should make scandal and risky investments less likely at the bureau -- but it is no guarantee. To the new board, Strickland and state lawmakers should add another layer of protection in the form of periodic, intensive, comprehensive audits by an outside examiner.

Strickland last week announced that he has named 11 members to the new BWC board. The new members appear to be knowledgeable, conscientious, honest Ohioans eager to do good jobs. But then, so did members of the old bureau Oversight Commission -- at least one of whom has been accused of accepting gifts improperly while serving on the panel. That is one reason why outside oversight is needed.

Most members of the old Oversight Commission appear to have attempted to keep the BWC on the right track. Unfortunately, lack of expertise and of authority limited their roles. The new board will have direct management power -- even that of firing the bureau director, in contrast to the advisory role held by the old commission.

It appears that bad decisions -- and, yes, some criminal activity -- occurred at high levels in the BWC, until everything came crashing down in 2005 as a result of the "Coingate' scandal involving politically connected wheeler-dealer Tom Noe. It has been estimated that wrongdoing and risky investments at the BWC cost the state as much as $225 million. That was bad for injured workers and bad for the companies that pay premiums to the BWC.

Still, a major part of the bureau's responsibility is investing hundreds of millions of dollars in order to earn the best possible returns. The higher the "profit' from BWC investments, the lower the premiums Ohio companies must pay and the better the coverage available to injured workers.

By their very nature, investments involve some risk. The new board of directors is charged with ensuring that such risks do not go beyond prudent -- and certainly legal -- bounds. It appears, again, that Strickland has appointed good people to whom that task is being entrusted. Still, as the history of misdeeds in the old BWC indicates, the more safeguards that are in place, the better.

This column first appeared as an editorial in the Tribune-Chronicle newspaper in Warren, Ohio. The newspaper's Web site is http://www.tribune-chronicle.com.



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