Folks at the Ohio Bureau of Workers Comp (BWC) desperately need to remember the first rule of holes: when you are in one, stop digging. Today, reports are that the BWC is considering $80 million in givebacks to employers in the form of an 8 percent dividend in a misguided attempt to demonstrate solvency. Last month, the BWC voted to raise rates by an average 4.4 percent beginning July 1. This "pay no attention to the man behind the curtain" scheme would be a knee-jerk response to the ever-widening scandal that now encompasses the loss of hundreds of millions of dollars in state funds. Nearly every day finds a new shoe being dropped. Some of the revelations are boggling:
- $10 to $12 million lost in coin investments, which we discussed twice previously. (see Ohio's Great Workers Comp Coin Caper? and First Head Rolls in Ohio Coin Caper)
- $215 million in losses from monies invested in a hedge fund with PA-based MDL Capital Management. BWC paid several hundred thousand for these management services.
- $4 million in losses from investments with crooked NY money manager, Alan Brian Bond. Apparently, investments continued even 18 months after Bend had been indicted on multiple counts of kickbacks and bilking police and firefighter pension funds.
We hope the BWC will drop the idea of employer givebacks until totally independent parties have assessed the full scope of the mess. Sadly, Ohio BWC has already broken faith with taxpayers, with employers that pay premium into the fund, and with injured workers for whom the monies are held in trust. Now it's time to stop digging.