Wednesday, February 23, 2011

Republican Senator votes against Pinnacol reform

Mitchell loses 5-1 as he defends insurance company

Today, Senate Republican Shawn Mitchell lost in his attempt to keep Senate Democratic Majority Chief of Staff John Cevette from bringing reform and accountability to Pinnacol Assurance. Cevette, like many Coloradans, has been critical of Pinnacol’s use of premiums paid by Colorado business owners to fund expensive luxury vacations. The Republican’s actions today came during Cevette’s confirmation hearing to join the Pinnacol board. Cevette, who has a long and distinguished career in both the public and private sectors was nominated by Governor John Hickenlooper for the position.
In explaining his vote against the confirmation, Senator Mitchell expressed dislike over the fact that Cevette had been critical of Pinnacol and its CEO, Ken Ross. Cevette offered the following comment in response:

“We shouldn’t be afraid to question this behavior. The management of Pinnacol has engaged in activities that are questionable, and it is important that the board evaluate those decisions and determine what changes are appropriate and necessary to ensure Pinnacol continues to fulfill its mission. The state auditor found a number of areas where Pinnacol is not in compliance with state law. As a board member, addressing those issues and bringing Pinnacol into compliance with the law would be my first task. Pinnacol is a good company that employs good people, but it has struggled under questionable management practices. I’m honored to be asked to serve as a member of the Pinnacol board. I look forward to supporting its mission to serve injured workers and provide affordable coverage for employers.”

Although Pinnacol Assurance has a long history of service to the state, it has recently come under fire for questionable use of funds. The most recent example of luxury travel on hard working Coloradans’ dime was revealed in January. It was then that Pinnacol was forced by court order to reveal expenditures of a company junket to Pebble Beach. Receipts from the trip show Pinnacol independent agents, relatives and employees, spent more than $21,050 on liquor, $53,203 in spa and golfing charges and $5,209 for photographers to document the event. In addition, records reveal that 27 of the rooms booked by Pinnacol ranged from $725 to $1,400 per night, and the company spent more than $82,000 for restaurants, catering, meetings and lounges. Pinnacol wasted thousands of dollars when employees or agents did not show up for hotel or golf reservations. In addition, $8,091.56 was spent on tours, including a wine tour. One dinner during the trip cost $19,120.84.

A recent audit of Pinnacol found abusive financial practices, flagrant violations of Pinnacol’s own policies, and disregard for Colorado law.