Political appointment offers little for workers

Injury insurance fund: Glendening shows little support for change by removing reformer from board.

June 02, 1999

GOV. Parris N. Glendening's appointment to the board of the troubled Injured Workers Insurance Fund, the state's largest worker compensation insurer, is outrageous on several counts.

The move does nothing to advance badly needed reforms for the 85-year-old fund, reforms that were supposed to be the focus of a state task force on IWIF the governor announced in February -- but has yet to appoint.

Louise T. Keelty, a 10-year board member and an outspoken voice for change among the largely quiescent directors, is out. Michael J. Wagner, a longtime Annapolis pol with scant knowledge of insurance-fund matters, replaces her.

The abrupt move was made after assurances were given that board members would not be replaced before the task force issued its report this fall. The move raises concerns about the governor's commitment to reform.

Mr. Wagner spent 16 uninspiring years in the Maryland General Assembly representing Anne Arundel County. He is a friend of Sen. Thomas L. Bromwell, who chairs the powerful Senate Finance Committee that deals with insurance and regulatory issues. Could Mr. Glendening be currying favor with Mr. Bromwell, who quickly praised the appointment? Recall that the governor's February announcement of a task force was timed to stifle strong legislative moves to force reform on the fund this year.

A desire for "new faces" was the governor's absurdly weak explanation for not reappointing Ms. Keelty, who led the challenge to questionable no-bid contracts arranged by IWIF's president, Paul M. Rose. But the governor reappointed M. Joseph Coale to a third term. (He also tapped Gail C. McDonald to replace retiring former chairman Donald W. Potter).

The board's flip-flop on no-bid deals, its decision to buy a managed-care company that provided contractual services and allegations of illegal phone recordings underline the need for a thorough inquiry. The loss of $14 million in operations last year, lavish advertising expenses and substantial bonuses to top executives responsible for that loss cry out for sweeping management changes.

Underlying this dispute is a philosophical division over whether the fund should operate as a private insurer or as a "last resort" state-run insurer for Maryland employers. Created by the legislature in 1914, the fund was allowed by 1990 law to compete with private insurers, although overseen by the gubernatorial board.

The promised task force is supposed to review laws that affect IWIF, as well as to examine its operating procedures. That's a heavy task. Mr. Glendening should have waited for the report before rushing to political judgment.

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