A $318,000 lavish junket to Pebble Beach involving Pinnacol Assurance executives and board members in May 2010 inspired a lawsuit forcing the release of travel receipts, investigations by two local TV stations seeking to expose the profligate spending habits of the quasi-governmental agency, and now calls by Gov. Bill Ritter and other Democrats for the organization’s leadership to step down:
The trip was the focus of a CALL7 undercover investigation in May that showed three Pinnacol board members — who are appointed by the governor to oversee Pinnacol’s finances — golfing, dining and drinking with the executives they were charged to oversee.
“The trip to California and its exorbitant price tag demonstrate extremely poor judgment on the part of Pinnacol’s leaders at a time when their customers — small businesses and workers alike — are suffering through the worst economy in generations,” Ritter’s statement said. “As a quasi-governmental agency with an obligation to respect and honor Colorado taxpayers, we deserve better. At the very least, we deserve more responsible leadership.”
Sen. Morgan Carroll, D-Aurora, who led a committee that investigated Pinnacol’s business practices, called for the board members who went on the trip to resign and a new board to fire Ross.
“The members of the board who attended this trip need to resign,” she said, adding that board members who received the benefits of the lavish trip cannot be independent. “New members need to be appointed with greater independence in those vacancies and that new board needs to terminate Ken Ross’s contract and search for a new CEO.” [emphasis added]
Senate President Brandon Schaffer (D) has called for those involved to step down.
A partial breakdown of the indulgent spending the Pinnacol executives and board members enjoyed:
The receipts of the trip, obtained after a six-month court battle, show Pinnacol employees, relatives and independent agents spent more than $53,203 in golf and spa charges, $21,050 in liquor and $5,209 for photographers to document the event.
The records show that 27 rooms purchased by Pinnacol ranged from $725 to $1,400 a night and Pinnacol spent more than $82,000 for catering, restaurants, lounges and meetings. In contrast, the group only spent $779 at the business center.
The group also wasted thousands of dollars when employees or agents did not show up for the hotel or golf reservation. One receipt shows Don Collins, who heads Pinnacol’s marketing efforts, was charged $1,400 for one night suite when he showed up a day late for his reservation. Other bills show greens fees charged for people who never showed up.
There was an additional $8,091.56 for tours, including a wine tour documented in the CALL7 investigation, and dining outside the resort, records show.
One dinner on May 15, cost $19,120.84.
A video released by CALL7 shows an irate Ross, Pinnacol’s CEO, threatening the investigative reporter, Tony Kovaleski.
Of course, Pinnacol’s poor judgment doesn’t end there, as a 9NEWS investigation reveals:
“This is like the icing on the cake,” Sen. Morgan Carroll (D-Aurora) said. “If it’s your personal time and your personal money, all of us would think it would be fun to learn how to cook, but that is poor judgment for a quasi-governmental entity. Businesses are having to be frugal, families are having to be frugal, Pinnacol is not an exception. They too need to be frugal.”
The need for transparency of non-profits or quasi-governmental agencies that take advantage of taxpayer funding but remain hidden behind Colorado Open Records Act exemptions and other transparency loopholes has become all too clear with the revelation that Community Centered Boards and other legal creations of the State of Colorado–like Pinnacol–operate beyond the call for on-demand spending accountability:
After 7NEWS asked for receipts from the trip, Pinnacol went to court asking a judge to rule that those documents are not subject to open records.
The judge ruled against Pinnacol and the appeals court ordered Pinnacol to turn over the documents, which the company released Thursday.
Denver District Judge Morris B. Hoffman ruled the documents are covered by open records and he wrote the reason Pinnacol did not want to release the records was because they would be embarrassing.
“The only damage the release of these documents will cause is some fleeting, and arguably healthy, embarrassment,” Hoffman wrote.
. . .
Unlike private insurance companies, Pinnacol was started by the state and receives benefits like the state’s generous retirement benefits for employees and the ability to avoid taxes.
Thankfully a judge disagreed, ordering Pinnacol to release the requested documents, rejecting the call for privacy and insisting that Pinnacol, a “political subdivision of the state,” had an obligation to provide access to the information in question.
Pinnacol’s board is appointed by the governor, and the organization enjoys tax breaks as a quasi-governmental agency.