27 Ohio companies had rates inexplicably lowered by BWC

11/3/2006

COLUMBUS - Amid political pressure, administrators at the embattled state fund for injured workers have released information showing that rates were inexplicably lowered for 27 Ohio employers.

A draft audit released Wednesday did not include the names of companies that received the lower rates or how much they saved. The review followed accusations that some lawmakers intervened on behalf of constituents who complained of high premiums and got the rates reduced.

The auditors found there were no written policies or procedures to determine when administrators with the Ohio Bureau of Workers' Compensation would override the computer system to lower rates. The audit covered January. 2003. through September. 2005.

In 75 percent of the 153 largest rate-change cases, the audit found that agency rules were either violated or it was impossible to know because no written explanation was kept.

The agency invests employer premiums and then pays medical bills and lost wages when workers are injured. Employer premium rates are supposed to be based on job classifications, the industry, a company's safety record, and whether the business participates in extra safety training.

The bureau has acknowledged investment losses of at least $300 million. And Tom Noe, a top Republican fundraiser, is currently on trial in Toledo on theft and other charges for his handling of a $50 million investment in rare coins.

The scandal also uncovered Gov. Bob Taft's failure to report golf outings and gifts, resulting in his no contest plea to ethics charges and a $4,000 fine.

Administrator William Mabe, who took over the bureau last year, said he ordered the audit and investigation as part of an effort to restore trust in the bureau. He said the internal controls governing the manual overrides have been tightened.

"Action has been taken and is currently under way to bring closer scrutiny to this process and ensure that the override process is used for its original intentions," he said.

Bureau spokeswoman Nancy Smeltzer said legitimate reasons to override the bureau's computer system include fixing a mistake about a claim that affects rates.

State Sen. Marc Dann, an outspoken critic of the administration's handling of the bureau scandal, has threatened twice in recent weeks to sue the agency if it didn't release the audit.

Mr. Dann, a Youngstown Democrat running for Ohio attorney general, said he will ask the Justice Department's Division of Public Integrity to investigate.

"In this case, some employers were apparently granted premium cuts just because they asked for them, and someone at the bureau had the power to give them whether they were warranted or not," Mr. Dann said in a statement.