Workers Compensation

Gov. Arnold Schwarzenegger's plan to raise $1 billion by selling part of the state's scandal-plagued workers' compensation insurance company is running into strong flak from small-business advocates, the insurance industry and the state's elected insurance commissioner. The governor wants to help reduce a $24-billion budget deficit by giving private insurers a chance to buy about half of customers' policies at the government-controlled State Compensation Insurance Fund.

Peter "Navy" Tuiasosopo had only worked as a Los Angeles County probation officer for 180 days when he left work after suffering two on-the-job injuries in 2000 -- straining his shoulder closing a gate and hurting his ankle breaking up a fight among youths. During the next seven years, Tuiasosopo, 45, collected workers' compensation as he jetted to Hawaii to act in movies and television shows that paid more than $38,000. In 2007 he sued the county, alleging probation officials failed to help him return to work, and earlier this year the county settled the lawsuit for $125,000.

California's top insurance regulator is expected today to file a lawsuit to try to stop the governor from selling $1 billion worth of business at a state-run workers' compensation insurance company. Last month, Gov. Arnold Schwarzenegger and the Legislature approved the proposed sale to raise money to partially plug a $24-billion hole in the state budget. But Insurance Commissioner Steve Poizner vowed to fight it. "This is bad politics; it's illegal, and I'm going to stop it," said the wealthy former tech entrepreneur from Silicon Valley, who is seeking the Republican nomination for governor in 2010.

California Atty. Gen. Jerry Brown cracked down Wednesday on an alleged scheme that advises small companies on how to avoid buying costly workers' compensation insurance by turning employees into stock-owning corporate officers. In a lawsuit filed in San Diego County Superior Court, the state sought a permanent injunction and civil penalties of at least $300,000 from Contractors Asset Protection Assn. Inc. of Rancho Santa Fe and its founder-president, Eugene J. Magre.

California's troubled state-backed workers' compensation insurance company must revamp its board of directors, stop meeting in secret and modernize its corporate governance, lawmakers demanded Wednesday. The call for a sweeping overhaul of the State Compensation Insurance Fund, which is currently the target of a criminal investigation, came at a hearing of the state Senate's Banking, Finance and Insurance Committee.

Don't be fooled by the colorfully framed family photos on Lilia Garcia's bookshelves, or the volume of Maya Angelou's poetry, or the collection of coffee mugs with cheery sayings. Garcia is no mushy, stuffed-animal-loving softie. Her tiny, windowless office is the command center for a long-running battle against outlaw cleaning companies that prey on low-wage janitors.

Los Angeles Controller Laura Chick on Thursday subpoenaed records from City Atty. Rocky Delgadillo's workers' compensation division, the latest salvo in an escalating power struggle between two citywide elected officials.

Nineteen convictions, two acquittals and a bevy of changes in how business is done in the Ohio state capital: Those are the results of a three-year investigation into an investment scandal at the Ohio Bureau of Workers' Compensation. The sentencing of investment advisor Mark Lay to 12 years in prison Tuesday marked the close of the last criminal case related to the investigation.

For a decade, California employers and their advocates in Sacramento complained about the high cost of workers' compensation insurance and condemned abuses of the system by employees, who they said fake claims, exaggerate medical conditions and collect fat disability benefits. But some data suggest that employers -- not workers -- are the bigger workers' compensation cheaters. And the state is stepping up enforcement against businesses suspected of ignoring the law and endangering workers.

California's employers got a big boost from a powerful ally, Gov. Arnold Schwarzenegger, when it came to killing bills this year that sought to boost benefits and make other changes in the state's program for injured workers. This week the governor vetoed half a dozen bills that could have raised costs in the state workers' compensation insurance system. The system's overhaul in 2004 was one of the governor's biggest achievements.