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Published: Sunday, 6/19/2005

BWC's newest victims

The poison that has contaminated the Ohio Bureau of Workers' Compensation is about to claim a lot of new victims: thousands of this state's private employers.

The BWC Oversight Commission, no paragon of virtue itself in the Coingate investment scandal, says its confidence in the viability of the bureau's investments has been so shaken it will not allow a proposed $70 million rebate to private employers to go forward.

If the decision sticks, it will mark the first time in nine years that the BWC has not rebated to employers money generated by the bureau's investment system.

But wait, there's more. The BWC says that rebate or no rebate, it plans to move ahead on July 1 with a planned 4.4 percent increase in premiums paid by those same employers into the State Insurance Fund.

While rebates are never guaranteed, Ohio employers have counted on them to help offset their premiums. This year that won't happen.

The irony is obvious: Ohio businesses big and small, most of whom would consider themselves aligned with the Republican Party and Republican values, are being penalized by the arrogance that grows out of long-term one-party rule by the GOP.

It's an arrogance that breeds a sense of invulnerability, inner-circle secrecy, and incredibly bad judgment, such as when the BWC continued to pour good money after bad even when it became clear that its investment in MDL Capital Management's high-risk hedge fund was absorbing colossal losses - $215 million worth.

To make matters worse, former BWC administrator James Conrad kept details of the failed investment out of his weekly reports to Gov. Bob Taft because he didn't want them leaked to the public.

Another bit of irony is interim BWC administrator Tina Kielmeyer's June 9 e-mail to her employees reassuring them the department is not going to be privatized, despite all its problems. Privatization of government is part of the GOP mantra, but evidently only until the jobs are their own.

We also wonder how much the monumental MDL blunder was fueled by pressure from George Forbes, a former Cleveland city councilman and a Democrat.

As vice chairman of the BWC's Oversight Commission, Mr. Forbes was in a position to influence the bureau's selection of Pittsburgh-based MDL, which managed the hedge fund and also employed Mr. Forbes' daughter as a senior vice president.

At one point, Mr. Forbes urged the BWC to go easy on MDL, according to newly released records. That's a conflict of interest with a capital "C."

Despite a story that truly has captured national attention, it's clear that Mr. Conrad's reports to the governor contributed early on to Mr. Taft's once stout defense of Toledo coin dealer Tom Noe.

In his April 7 report to the governor, Mr. Conrad suggested that the BWC had become "collateral damage" in The Blade's pursuit of one individual, presumably Mr. Noe, and lamented the newspaper's "one-sided approach."

We don't hear that ridiculous argument any more.

It's impossible to read Mr. Conrad's various reports to Mr. Taft and not be struck by his frequent pithy asides. At one point shortly after the scandal came to light, Mr. Conrad advised the governor that the BWC will "continue to point out the truth and hope it will prevail. Ye shall know the truth and the truth shall make you free."

Mr. Conrad ultimately resigned, apparently set free by the truth.



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