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Democratic state Rep. Sal Pace’s bill (pdf) seeking to rein in Pinnacol Assurance executive spending passed unanimously through the Republican-controlled House State Affairs committee last week. If that vote is any measure, the bill will pass into law in the next couple of months with little resistance. Indeed Pace’s legislation will very likely gain more steam in April when a task force reviewing Pinnacol spending on travel for the last two years reports its findings. If what the public already knows about tax-exempt Pinnacol’s executive travel habits is any measure, get ready for more bombshells from a Colorado battle-line in the lopsided contemporary American class war.
Pinnacol CEO Ross gives it to KMGH reporter Tony Kovaleski at Pebble Beach.
When asked about his legislation to rein in the amount that Pinnacol is allowed to spend on travel, Pace rattles off a litany of Pinnacol expenses racked up during that ill-fated Pebble Beach trip.
• $39,659 in golf and spa services, including sports pedicures and pebble massages • $19,120 for one dinner, including seven bottles of $100 Chardonnay • $8,091 for a special wine tour by bus • $1,795 on Jack Daniels, bottles of wine and filet mignon in a single night • $1,040 in penalties for no-shows at golf tee times • $325 for special pink golf balls “I don’t understand the need for pink golf balls,” Pace says. “Maybe it flies farther.”
And according to Pace, the Pebble Beach trip was not the first junket taken by Pinnacol executives over the past few years. He lists $133,000 for a trip to the Four Seasons in Scottsdale, Ariz., $109,000 for an island getaway in South Carolina and $25,000 for a two-night stay at a Ritz-Carlton. Pace says Pinnacol also paid $14,393 for a luxury suite at Invesco Field.
He scoffs at the notion that the company is simply doing what other insurance companies do to remain competitive, retain their sales staff and keep them motivated.
“If we didn’t create Pinnacol and give them a market and give them tax breaks and put their employees on our state retirement system and appoint their board, maybe we’re talking about a private insurance company,” Pace says. “But they’re not.”
Pace’s House Bill 1211 would prohibit any state-chartered entity from paying any travel-related expense on behalf of a board member, officer or employee in excess of twice the annual per diem rate allowed by the federal government. But he was contacted by several state agencies, including the University of Colorado, that asked him to narrow the scope of his bill so that they would be excluded. In the case of CU, Pace said, he was told by a CU lobbyist that athletics squads like the women’s basketball team and the football team would be unable to adhere to such restrictions, and that CU researchers engaged in remote projects, such as taking ice core samples in Greenland, for example, would be unable to come in under twice the federal per diem. He was urged to narrow the scope of the bill to apply only to Pinnacol, which he says he will do, with reservations.
“I’m willing to do that, to get it passed,” Pace says. “It does disturb me that so many other state entities have said they can’t live within these very generous amounts that I’ve offered them.”
He adds, “If this is good policy for Pinnacol, it’s good for any state agency. I don’t think any taxpayer dollars should be abused in the lavish way that Pinnacol has been traveling.”
“They can say it’s not taxpayer dollars,” Pace continues. “They can argue that. But it’s not their money either. According to statute, it belongs to the ratepayers, which are the businesses of Colorado.”
Pace’s latest bill is the successor to others he introduced last year. One that passed, he says, targeted Pinnacol for not paying workers’ compensation benefits in a timely fashion. The other, which died, would have curtailed Pinnacol’s surveillance efforts. According to Pace, the company was paying more that $5 million a year to spy on injured workers to make sure they weren’t abusing the system. In some cases, he says, they were targeting people who had lost arms and legs on the job.
“How does someone grow a leg back?” Pace asks.
“We literally had those witnesses come in. … A lot of injured workers would settle for far less than they were asking, just to get the surveillance off their backs.”
