Pinnacol chief's lack of judgment

A costly golf junket and strained relations with state leaders raise questions about the quasi-public agency's leadership.

The Denver Post
05/27/2010
http://www.denverpost.com/headlines/ci_15168322

Pinnacol Assurance's perk-filled vacation for its top sellers and senior board members to a Pebble Beach luxury resort raises serious questions about the judgment and leadership of the quasi-government entity.

Gov. Bill Ritter called the board members' participation in the trip "ill-advised," and some lawmakers are demanding that they resign.

We're also having a hard time accepting Pinnacol's chief executive, Ken Ross' explanation for this latest fiasco. His erratic behavior over the past several months — from his off and on efforts to take the company private to this — leads us to wonder if new blood isn't needed in Pinnacol's leadership.

It's true that Pinnacol's unique structure as a quasi-public agency complicates matters, but we're tired of watching the agency choose when to emphasize its public nature, or exploit its private status, depending on which suits them best.

Pinnacol does not receive direct taxpayer funding, but it benefits by not paying state or federal taxes on the workers' compensation plans it is required by the state to provide.

Had Pinnacol been a strictly private insurer, we would be inclined to accept Ross' explanation that rewarding top performers with $495 rounds of golf is good for business.

But we're weary of Ross using that unique status to gain the upper hand in disputes. In this case, Ross has refused to comply with a routine public records request by KMGH-Channel 7's Tony Kovaleski and Arthur Kane for receipts and guest information regarding the Pebble Beach visit. The request is meant to shed further light on Pinnacol's perks to its board members.

Ross argues that because no public money was spent on the trip, Pinnacol need not comply.

Tipped off by sources inside Pinnacol, Kovaleski and a cameraman headed to the posh golf course to ask some questions. They learned that board chairman Gary Johnson and board members Debra Lovejoy and Ryan Hettich were along for the junket. Kovaleski reported the troop stayed at a hotel that offers rooms from $695 to $2,000 per night, and rounds of golf for $495 per person.

Ross confirmed to us that Pinnacol paid for the trip. He also told us that Pinnacol has long had a policy of inviting board members and their guests along for the awards trips.

He pledged Wednesday to re-evaluate standards for the trips.

Ross played the bully on camera and had to be physically restrained from going after Kovaleski. He apologized Wednesday and said his anger stemmed from the reporter's interruption of a private event.

Separate from all of this, questions also have been raised about the size of the workers' compensation insurer's surplus and whether it comes at the expense of higher rates for policy holders than is justified.

Ritter is right to demand "better judgment" going forward. The recent actions of Pinnacol's leaders have begun to strain the public trust.

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