Judge orders Pinnacol to release documents

Workers' compensation provider ordered to release financial documents

Peter Marcus, DDN Staff Writer
Friday, August 20, 2010
http://www.thedenverdailynews.com/article.php?aID=9669

Pinnacol Assurance was dealt a blow yesterday when a Denver judge ruled that the workers' compensation provider of last resort must release to the public financial records documenting a recent lavish trip to Pebble Beach.

The Denver District Court ruling comes after KMGH-TV 7News requested the documents under the Colorado Open Records Act. Pinnacol, however, argued that despite the company being a state-chartered quasi-governmental agency, it did not need to release the documents because the Pebble Beach retreat was a private event.

Pinnacol attorneys asked the court to block 7News' request.

But Judge Morris B. Hoffman ruled that the records are indeed a matter of public record, and ordered the provider to hand over the financial documents explaining the cost of the trip to Pebble Beach last May.

"For the reasons I articulated from the bench at the end of the hearing held in this case today, I find and conclude that the documents requested by in their amended Colorado Open Records Act request are public records, and that neither the confidential commercial/financial exception É nor the common law privacy exception has been established É" wrote Hoffman in his written ruling.

Pinnacol has 30 days to disclose the financial documents. The provider can choose to appeal.

Ken Ross, president and chief executive of Pinnacol, issued a statement following the ruling yesterday, but was not clear about whether the provider would choose to hand over the documents or appeal the case.

"We will be reviewing our options with legal counsel and the board of directors to determine our course of action," Ross said in the statement.

He added that the Pebble Beach retreat was a private event, and that the records "do not involve the expenditure of public funds." Concerns were also raised by Pinnacol that disclosing the records could put the provider at a competitive disadvantage.

"The request, in our view, improperly sought records that could harm Pinnacol's competitive position and involve an improper intrusion into the privacy of individuals who attended the event," said Ross.

Pinnacol is known as the state's "insurer of last resort" because it must provide insurance coverage to employers that have difficulty purchasing plans privately. As a result, Pinnacol enjoys exemptions from federal and state corporate income taxes, the state insurance premium tax, state sales and use taxes, and property taxes.

An audit of the provider released in June found that Pinnacol paid its executives and employees significantly high bonuses, created cushy so-called golden parachute agreements for executives, and allowed for travel and entertainment expenses that do not comply with the company's own policies.

Pinnacol's journey through the public spotlight intensified last year when lawmakers attempted to raid $500 million from the company's surplus to close the state's budget shortfall at the time. Out of that conversation came the Pinnacol Interim Committee, which proposed legislation that increased transparency and government oversight of the agency.

The state audit released In June came after 7News reported that Pinnacol executives and board members, including Ross, attended a five-day golf outing to Pebble Beach in California that cost thousands of dollars.

In all, the company paid $1.5 million in travel and entertainment reimbursements in 2009. Many of the reimbursements violated Pinnacol's own policies, according to the audit, which said the violations "border on abuse."

Sen. Morgan Carroll, D-Aurora, who is a member of the Legislative Audit Committee and served as chairwoman of the Pinnacol Interim Committee, praised Hoffman's ruling yesterday.

"This is the right decision under the law and the right decision for the people of Colorado," said Carroll. "If we learned anything over the past year, it is that Pinnacol needs to answer to injured workers, to the businesses it serves, and to taxpayers about how it does business, just like any governmental agency. I'm glad the courts agreed."

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