"Either they have too much money to spend, or they have something to hide," says Jackie Speier about the management of the State Compensation Insurance Fund (SCIF). Speier lambasted management for hiring a contract lobbyist to kill her good government bill. SB 1452 will, if passed, subject SCIF to the same standards as other state and publicly created entities. She went on to say hiring a lobbyist is deceitful and in violation of the public trust.

State Fund's lobbying came to light in a recent Workers' Comp Executive Flash Report.

SCIF Management has been aggressively trying to exempt itself from review by the State Auditor testifying that it is a unique public entity. The bill was originated the Office of the State Auditor because it felt it needed to obtain affirmative legislative relief in order to do its job.

State Fund's present management has tangled with other state agencies including the California Department of Insurance. It is part of the Division of Industrial Relations which is subject to the State Auditor.

The bill would make SCIF subject to the same open government standards applied to all other state agencies.

"It would be preposterous in my mind to not have the authority to audit an entity created by the state," Speier said in a news conference, as State Fund's lobbyist George Miller of Lang, Hansen, O'Malley, and Miller looked on dejectedly.

"The arrogance that a state created entity that is peopled with state employees would not be subject to state audit review is the height of chutzpa," she said. The remark appears to be aimed squarely at interim State Fund president Jim Tudor who is a candidate for the permanent position.  The position is soon to be filled with a candidate choosen by a Governing Board mostly appointed by Governor Arnold Schwarzenegger. Schwarzenegger is known as a proponent of open government.

Today SB 1452 passed out of the Assembly Appropriations Committee and was placed on the consent calendar which means it goes directly to the Assembly Floor.

Miller told Workers' Comp Executive that he did not intend to challenge the consent status.

"So why are we holding this news conference? said Speier. "It's because State Fund has been so aggressive. They've hired an outside lobbyist to kill the bill and have paid him at least $178, 000," she said.

SCIF maintains it only wants an amendment to keep information confidential it deems would cause a market disruption. But its hired lobbyist also suggested that SCIF be exempt from the State Auditor with exception of information gleaned from whistleblower suits. Both of these suggestions are management attempts to legislate subterfuge and would serve only to exempt SCIF from all state audit requirements.

"I'm deeply troubled that a state created entity would hire a lobbyist to restrict auditing questions," Speier said.

As State Auditor Elaine Howle testified during the conference, the state auditor already has the ability to parse out proprietary information and has in fact audited other publicly created entities including the Ed Fund which is part of the Student Aid Commission.

"My office has provided information on other publicly created entities, and there was proprietary information involved and we were able to aggregate it out," Howle said.

Miller tells Workers' Comp Executive that SCIF is only concerned about protecting confidential information such as rate making, and denies that he was hired to "kill" any of Senator Speier's bills. The State Auditor does not audit process but rather results and effectiveness.

"This is much ado about nothing," he said.

But Senator Speier doesn't think so and she questions the agenda of an agency that's supposed to be serving the public trust by acting as the California workers' comp carrier of last resort for employers and injured workers.

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