SENATE COMMITTEE ON GENERAL GOVERNMENT

 

 

February 22, 2005                                                                                                   Hearing Room B

3:10 P.M.                                                                                                                     Tapes  20 - 21

 

MEMBERS PRESENT:         Sen. Frank Shields, Chair

Sen. Gary George, Vice-Chair

Sen. Bruce Starr

Sen. Joanne Verger

Sen. Vicki Walker

 

STAFF PRESENT:                 Judith Callens, Committee Administrator

Gary Roulier, Committee Assistant

 

MEASURES/ISSUES HEARD:        

                                                HCR 5 – Public Hearing and Work Session

                                                State Accident Insurance Fund Report – Informational Meeting

 

 

These minutes are in compliance with Senate and House Rules.  Only text enclosed in quotation marks reports a speaker’s exact words.  For complete contents, please refer to the tapes.

 

TAPE/#

Speaker

Comments

TAPE 20, A

003

Chair Shields

Opens the meeting at 3:13 p.m. and opens a public hearing on HCR 5.

HCR 5 – PUBLIC HEARING

022

Judith Callens

Administrator. Explains the provisions of the bill.

042

Sen. Laurie Monnes Anderson

Senate District 25. Testifies in support of HCR 5.

060

Sen. Verger

Expresses support for the bill.

070

Chair Shields

Closes the public hearing and opens a work session on HCR 5.

HCR 5 – WORK SESSION

079

Sen. B. Starr

MOTION:  Moves HCR 5 be sent to the floor with a BE ADOPTED recommendation.

 

 

VOTE:  5-0-0

AYE:            In a roll call vote, all members present vote Aye.

 

Chair Shields

The motion CARRIES.

SEN. MONNES ANDERSON will lead discussion on the floor.

088

Chair Shields

Closes the work session on HCR 5 and opens an informational meeting on a report from the State Accident Insurance Fund.

STATE ACCIDENT INSURANCE FUND REPORT – INFORMATIONAL MEETING

109

Brenda Rocklin

Interim President, State Accident Insurance Fund Corporation (SAIF).

130

Chair Shields

Outlines the purpose of the briefing and asks members to list specific areas of concerns.

143

Sen. Walker

Requests information on contracting and lobbying, executive salaries, and fraud referrals.

158

Sen. Verger

Comments that Rocklin has been sent into the company to clean up what other people had done.

182

Sen. Walker

Adds that while Rocklin has done a good job, this report will have value as it will review those areas needing attention.

194

Rocklin

Asks whether Sen. Walker was interested in executive salaries and oversight of those salaries, or if she deems these issues as separate.

204

Sen. Walker

Responds that her concern is with the statement that the board has exercised strong supervision of the president.

212

Rocklin

Begins a summary on fraud referrals within SAIF.

244

Rocklin

Continues with reviews of fraud referrals within SAIF.

284

Sen. Walker

Asks for specific information regarding a particular investigation.

290

Rocklin

Responds with the information and discusses the case with Sen. Walker.

334

Rocklin

Reviews sections of the deposition in question, past practices and the connection with performance measurement.

347

Sen. Walker

Asks about a 1991 practice to pay bonuses for bringing the numbers of claims down.

384

Rocklin

Responds that she has not examined practices back that far. Discusses these past practices with Sen. Walker.

TAPE 21, A

012

Rocklin

Begins a discussion of SAIF contracts.

053

Rocklin

Reviews contracts that the SAIF board is required to review prior to approval.

070

Chair Shields

Asks how SAIF got into a position where the board was not reviewing specified contracts.

089

Rocklin

Answers that she is not aware of how the situation developed.

113

Chair Shields

Comments that these past practices are disturbing. Asks whether a culture of arrogance somehow developed within SAIF.

136

Rocklin

Responds that the current executive staff is well aware that the SAIF board has an important role to play.

160

Sen. Verger

Asks if the makeup of the board is the same.

162

Rocklin

Responds with a review of the board membership.

167

Sen. Verger

Notes that the board, at some point, would have seen a list of the contracts.

170

Rocklin

Answers that a detailed examination of the budget would have revealed the existence of the contracts.

187

Sen. Verger

States that some budgets are large and complex, and the contracts might not be readily apparent.

198

Rocklin

Comments that it is apparent that the former board members did not focus on the contract area, and instead delegated reviews to the past president.

210

Sen. Walker

Asks when the Governor plans to fill the remaining two board positions.

225

Rocklin

Answers that she does not have a set time frame.

231

Sen. Walker

Asks who the SAIF president reports to.

235

Rocklin

Responds that the position serves at the pleasure of the board of directors.

243

Sen. Walker

Reviews the removal of the past president and the specific statutory authority.

267

Rocklin

Summarizes advertising contracts.

307

Chair Shields

Comments that a lot of things are on hold, waiting for the rest of the board seats to be filled.

316

Sen. B. Starr

Asks if they have any issues with the work that the advertising agency did for SAIF.

334

Rocklin

Answers that a review indicated that SAIF could do some of the work internally and they also needed to develop an advertising strategy.

363

Sen. B. Starr

Asks if the issue is that new leadership at SAIF do not see past advertising practices as appropriate.

381

Rocklin

Responds that is correct.

388

Sen. Walker

Reviews a series of letters to the editor developed by the advertising agency.

404

Rocklin

Notes that while the letters were developed by the advertising agency, SAIF does not consider that to be “advertising.”

TAPE 20, B

013

Sen. Walker

Continues a review of past advertising strategies involving legislators.

023

Rocklin

States that there is a question of semantics as to what constitutes “advertising,” and that they did address that strategy and want to move forward in a different direction.

034

Sen. Verger

Notes that these past practices seem to demonstrate a total disregard for the value of money.

049

Sen. George

Stresses that he is concerned that the paper trail between SAIF and advertisers will not be transparent to the public.

061

Rocklin

Responds that those are public records and are available to the public. Adds that there are some exceptions such as claimant files or employer account records.

076

Sen. George

Asks how we can be assured that an audit would be unbiased.

079

Rocklin

Answers that they will have outside auditors review group contracts.

096

Sen. Verger

Asks about the mutual consent clause contained with the Victory Group contract.

099

Rocklin

Responds that is not a standard contract clause but it was a “SAIF template.”

107

Sen. Walker

Reviews the termination provision within a former Victory Group contract and asks if Cecil Tibbets approved this new language.

129

Rocklin

Refers to the termination paragraph now contained within the contract.

137

Sen. Rocklin

Asks about the two contracts for Mr. Goldschmidt and Mr. Campbell and why they were seen as good contracts to retain.

154

Rocklin

Summarizes a Department of Justice review of the contracts and what she assumed the lobbying efforts would entail.

165

Sen. Walker

Recaps past efforts to rectify public records issues with SAIF.

184

Rocklin

Concludes that there is nothing within the law that would preclude SAIF from using an outside lobbyist. Adds that, unlike other agencies, SAIF competes in the marketplace.

214

Chair Shields

Comments on SAIF lobbyist performance.

218

Sen. Walker

Asks about the model guidelines for lobbyists being developed and whether they conform to Department of Administrative Services model guidelines.

222

Rocklin

Responds that SAIF is currently operating within those guidelines.

233

Sen. Walker

Asks if this is an issue to be discussed with the present board rather than waiting until the full board is in place.

236

Rocklin

Answers that they will present the guidelines at the next board meeting.

239

Sen. Walker

Asks if there are other contracts that contain a mutual consent clause.

241

Rocklin

Answers that she was not able to find other contracts with this particular clause.

256

Sen. Verger

Asks how confidence can be restored in SAIF.

284

Rocklin

Responds that the problems were at the top and emphasizes that SAIF employees were doing a good job for Oregon’s injured workers.

315

Rocklin

Discusses expectations for the top management within SAIF.

346

Rocklin

Stresses that the current board is providing appropriate oversight.

370

Sen. Verger

Asks for a summary of the backgrounds of the SAIF board members.

376

Rocklin

Summarizes the board member backgrounds.

414

Sen. George

Talks about a culture at SAIF which he described as “arrogant” and asks what assurances they would have that these past political campaigns would not be conducted in the future.

TAPE 21, B

022

Rocklin

Responds that they are auditing the contracts to assure that these practices are not continued.

047

Sen. Walker

Asks about past SAIF board minutes and discussions involving the Associated Oregon Industries contract.

063

Rocklin

Answers that they are reviewing the contract and summarizes the negotiations.

086

Chair Shields

Notes that the discussions regarding the contracts may be altered based on public knowledge of SAIF practices with regard to contracts.

103

Rocklin

States that the SAIF board is concerned with payment for a magazine that contains such a large amount of political comment.

120

Chair Shields

Asks if these contracts have been analyzed to determine that the state is getting the most for the dollars invested.

136

Rocklin

Responds that an outside audit will make those determinations.

143

Sen. Verger

Notes that she would have an interest in whether they are putting these contracts out for competitive bidding.

150

Sen. George

Expresses concern over a state agency performing an editorial function, and wants assurances that undue influence on legislators won’t be brought to bear in the future.

161

Rocklin

Answers that the agency would simply be an advertiser and would not control editorial content.

174

Sen. George

Reviews a past occurrence where advertising purchases were made to influence policy.

188

Rocklin

Assures the senator that is not the proper way to run an advertising campaign.

194

Sen. George

Asks whether the advertising emphasis will be on selling insurance.

196

Rocklin

Responds that they want to sell insurance and also want to inform Oregonians about SAIF.

214

Rocklin

Reviews diversity issues and cultural competence within SAIF.

240

Chair Shields

Comments on the failure to perform injured worker surveys in Spanish until recently.

261

Sen. George

Comments on some of the medical practices preferred by foreign workers.

275

Chair Shields

Reviews experiences with refugees from the former Soviet Union.

314

Sen. Walker

Expresses concern that SAIF executive salaries are “high,” and asks how salaries are determined.

352

Rocklin

Responds with a summary of how salaries are set within SAIF. Adds that they are working with an outside company to look at compensation levels.

391

Chair Shields

Closes the informational meeting and adjourns the meeting at 5:05 p.m.

 

 

EXHIBIT SUMMARY

 

None Submitted