Walker spurs ethics investigation of SAIF.

Byline: Diane Dietz The Register-Guard

An ethics agency launched a preliminary probe Monday of lobbying practices by the state's worker compensation system in response to a complaint by state Sen. Vicki Walker of Eugene.

Walker said executives of the SAIF Corp., the semipublic organization that insures Oregon workers, misreported by nearly $1 million the amount they spent trying to influence lawmakers.

"They didn't want anybody to know how much money they're spending," the Democratic senator said. "Nothing surprises me about this agency. They've run amok in their financial dealings."

The case will go before the seven-member Government Standards and Practices Commission at its Feb. 27 meeting. The commission will rule whether to dismiss the complaint or to order a full investigation, which would be completed by June 4.

The penalty for violating ethics laws is a fine of up to $1,000 for each incidence, said Patrick Hearn, the commission's executive director.

SAIF has been under fire since mid-October when a court ordered the company to make its financial records public. The records indicated that the corporation had put more into lobbying than it had disclosed in mandatory reports to the ethics agency - including part of a $20,000 payment to former Gov. Neil Goldschmidt and $8,000 to former House Speaker Larry Campbell.

Walker said that the corporation also spent unreported advertising dollars to orchestrate public pressure on the Legislature during the 2001 session. She said the corporation took out newspaper advertisements, made reprints and then mailed the result to lawmakers.

"It was because we are coming down on SAIF in the 2001 legislative session," Walker said. "That's not in the normal course of their business practice. And it went unreported."

But SAIF Vice President Cecil Tibbetts said Walker's charges are inaccurate and that the corporation had disclosed everything required by law. Walker errs in including advertising costs as a lobbying expense, he said.

"We have to correspond. We have to advertise. We have to worry about public relations issues that are raised by activities of the Legislature," he said.

"We're not buying advertising to impact the legislation. We're trying to deal with the impact the legislation is having on our customer base and our ability to sell the product," he said.

SAIF maintains that the criticism has been spurred by Liberty Northwest, a competing private insurer that is seeking market share. But Walker said SAIF uses its need to be competitive to hide questionable hiring and lobbying practices.

"Their pat answer constantly is `Oh, it's Liberty. We've got to defend ourselves against Liberty Northwest.' Well, I say that's hogwash," Walker said.

SAIF is a nonprofit corporation that was created by the state. It operates on the money it makes selling worker's compensation insurance to businesses and on its investment returns. SAIF is governed by a five-member volunteer board appointed by the governor.