Worker’s Comp
Good news here in Washington. The Democrats, with real majorities in both houses, are going after the questionable funding of the Building Industry Association of Washington. Apparently, the BIAW, and other industry groups, have been running a scam that allows them to profit from Worker’s comp funds, and rechannel that money into political campaigns of the likes of Dino Rossi and Rob McKenna. How does the scam work?
The group is one of the nation’s largest home-builders associations. It gets some money from membership dues and from a health-insurance program it manages for its members. But the group gets the bulk of its income through the state’s workers’-compensation system.
State law allows businesses to form workers’-compensation pools to share insurance risks. The BIAW, which operates the state’s largest such pool, gets refunds from the state every year its premiums exceed claims.
The BIAW keeps 20 percent of the refunds and gives the rest to members who participate in its workers’-comp pool. The association’s take in 2004 was more than $5 million, half of which went to its 15 local chapters.
Under the legislation introduced this week, House Bill 1070, groups like the BIAW could keep no more than 10 percent of their refunds. In other words, the BIAW’s income would be cut in half.
So this political advocacy group funds itself, by putting employers in a difficult position. In order to participate in a risk-pooling scheme, they must make a sizable donation to this political advocacy group.
This is an excellent start to the legislative session, for three reasons. First, it’s good policy. Second, it significantly cuts funding for a GOP cash cow. Third, this is something the Labor Council has been trying to do for years, without much success.
Republicans will howl that this is a politically motivated attack on some of their biggest funders, and they’re probably right about that. But it’s also difficult to come up with an argument for why this isn’t good policy. If the builders of the state find the political advocacy of the BIAW to be a good investment, they can make a donation above and beyond member dues. But I can’t think of a good principled reason to allow organizations like this to skim off Worker’s compensation funds for their political advocacy.
Frank McCabe, executive VP of BIAW, makes a feeble effort:
For the past several weeks, Tom McCabe, the association’s executive vice president, has assigned most of his staff to help Rossi and the state Republican Party in their legal effort to overturn Gregoire’s 129-vote victory. BIAW staffers, for instance, have been sifting through criminal records to find examples of felons who voted illegally.
McCabe insists there’s nothing wrong with how the BIAW uses its refund money. “Does Boeing spend some of its profits on politics?” he asked.
Um, yes they do. But they do so voluntarily–the companies that “donate” money here are not. In fact, let’s not mince words here:
Using the workers’-compensation system “as a cash cow for their political ambitions is flat out corrupt and should be stopped,” said Democratic Sen. Karen Keiser of Kent, who works as communication director for the Labor Council when the Legislature is not in session.
Indeed. Link to theĀ Seattle Times story here.