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Luis Toro Headshot

Time to Toughen Ethics Rules for the Pinnacol Board

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KMGH-TV's recent expose of a lavish Pebble Beach golf trip taken by three members of the board that oversees Pinnacol Assurance, the state workers' compensation insurance fund, earned bipartisan outrage. The likelihood that Pinnacol itself paid for the trip - which can't be confirmed because Pinnacol filed suit in Denver District Court to block an Open Records Act request from KMGH - raises questions about Colorado's ethics laws. Specifically, isn't this exactly the kind of gift voters banned when they passed Amendment 41 in 2006 - that is, something that doesn't meet the legal definition of a bribe but that reasonably calls into question whether a public official might look favorably on the gift-giver when making official decisions?

The answer is no, partly because of the unique setup of Pinnacol Assurance. Formerly known as the Colorado Compensation Insurance Authority, in 2002 Pinnacol changed its name and assumed its current form as a workers' compensation insurance company defined as a political subdivision of the state but funded entirely through premium payments from businesses. Pinnacol is overseen by a board, appointed by the Governor subject to approval by the Senate, that receives only per diem payments plus reimbursement of actual and necessary expenses. Amendment 41's gift ban doesn't apply to board members paid on a per diem basis, because the philosophy behind Amendment 41 is that salaried public officials and employees should not receive compensation for their services from anyone other than their government employer. But as the Pebble Beach trip shows, that doesn't mean the public doesn't have a legitimate concern that Pinnacol may be currying favor with its governing board by treating them to lavish vacations. Next year, the state legislature should take a close look at the ethics laws that apply to the Pinnacol board.

Right now, the state ethics law that applies to unpaid members of boards and commissions only prohibits them from performing official acts that "may have a direct economic benefit on a business or other undertaking in which such member has a direct or substantial
financial interest." The Pebble Beach trip shows that this doesn't go far enough. Members of state boards and commissions ought to be prohibited from accepting gifts from the businesses they regulate. That shouldn't be too much to ask - if a person wants to be on a state board or commission as a way of getting freebies from the regulated community, they probably shouldn't be on the board. The corruption scandal at the United States Mineral Management Service is just one example of the problems that can arise when regulators feel free to receive gifts from the regulated community. Let's make sure something like that can never happen at Pinnacol.

Here's hoping the Pebble Beach incident won't be forgotten when the legislature goes into session next January.