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.

After the invasion of Iraq, the U.S. military discovered that rebuilding the country and confronting an insurgency required a weapon not in its arsenal: thousands of interpreters. To fill the gap, the Pentagon turned to Titan Corp., a San Diego defense contractor, which eventually hired more than 8,000 interpreters, most of them Iraqis. For $12,000 a year, these civilians served as the voice of America's military, braving sniper fire and roadside bombs. Insurgents targeted them for torture and assassination.

The campaign to cut workers' compensation costs in California is being hampered by some doctors who are exploiting a legal loophole that allows them to sell prescription drugs directly to patients at markups that can surpass $500 on a single bottle of medication.

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.

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.

Nearly everyone has an opinion about what ails California's workers' compensation system. Safeway Inc. is particularly sore about its chiropractic bills. After a fall or strain, the grocer's California workers visit their chiropractors an average of 40 times -- about four times as often as the company's employees in neighboring Oregon and Arizona.

In what authorities called the biggest case of its kind in California, a former Los Angeles city personnel supervisor was accused Thursday of masterminding a $1.1-million embezzlement of workers' compensation funds to finance her world travels, a new home and other extravagances.

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.

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.

Illegal immigrants hurt on the job are entitled to workers' compensation benefits, a state appeals court panel has ruled, upholding California's policy of granting workplace rights to undocumented employees. Torrance coffee roaster Farmer Bros. Co. had sought to deny workers' comp benefits to an injured employee who was in the country illegally. The company argued that federal immigration laws superseded the state's system for treating victims of workplace injuries.

After the invasion of Iraq, the U.S. military discovered that rebuilding the country and confronting an insurgency required a weapon not in its arsenal: thousands of interpreters. To fill the gap, the Pentagon turned to Titan Corp., a San Diego defense contractor, which eventually hired more than 8,000 interpreters, most of them Iraqis. For $12,000 a year, these civilians served as the voice of America's military, braving sniper fire and roadside bombs. Insurgents targeted them for torture and assassination.

The family of a 52-year-old Huntington Memorial Hospital nursing assistant who had a stroke a week after she was attacked by a patient has filed a claim in a state workers' compensation court, saying she was unfairly denied medical coverage. Amelia Mendoza, who has four adult children, had a massive stroke April 20, about 2 1/2 hours after being turned away from Huntington Memorial Hospital's occupational health clinic because it was too busy, her family's lawyers said Tuesday.

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.

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.

The owner of a security firm and two vice presidents pleaded not guilty Friday to charges of defrauding the state of $9 million in an elaborate workers' compensation scheme. Ousama Karawia, 45, owner and president of International Protective Services Inc., and Vice Presidents Larry Finley, 42, and Allan Terrill Bailey, 39, have been charged with one count each of conspiracy and multiple counts of workers' compensation premium fraud and insurance fraud, according to the Los Angeles County district attorney's office.

Soaring medical costs may drive up premiums paid by already beleaguered California employers for workers' compensation insurance -- after rates plunged 65% over the last six years. Gov. Arnold Schwarzenegger, who forged major changes in the state workers' comp law in 2004 that slashed rates, has launched a bid to stop a potential 24.4% rate hike now being discussed in Sacramento.

The Treasury Department should deny American International Group Inc. $30 billion in bailout funds until the company agrees to take back millions in bonuses and negotiate cheaper exits from its financial contracts, congressional auditors said Tuesday. The Treasury and the Federal Reserve have committed more than $182 billion to save AIG, and the Treasury now owns nearly 80% of the New York company. Experts warn the insurance giant may require more money.

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.

Insurance authorities say two Southern California business executives have been charged with defrauding the state of $18 million in a workers' compensation scam. State Insurance Commissioner Steve Poizner said David Zahler and David Tai were charged after a 2 1/2 -year investigation of their temporary employment company, Staffing Services Inc. in Bellflower. Zahler, who is chief executive, and Tai, who is chief financial officer, are accused of misrepresenting the type of employees for whom they were seeking workers' compensation coverage so they could pay cheaper premiums.