House Minority Leader Sal Pace, D-Pueblo, and Sen. Lois Tochtrop, D-Thornton, announced a bill Tuesday designed to limit Pinnacol Assurance’s travel expenditures after it was revealed that Pinnacol had spent hundreds of thousands of dollars on everything from spas to pink golf balls for top producers of the company.
“This is a direct response to the abuses of Pinnacol, and not just recently but over the last couple of years,” Pace said. “All of this money either comes out of the care for injured workers or it comes out of the cost that it passed on to businesses to have insurance for their employees. This cost comes directly out of injured workers or small businesses.”
Pace told reporters during a press conference that the legislation would limit daily travel expenditures to 200 percent of the IRS recommended per diem for travel of $207 for a city such as Denver.
He said the bill would stop future expenditures, such as the trip to Pebble Beach, that cost the pseudo-governmental organization $318,717 over a five day period of time. Those expenditures included $15,000 in airfare, $39,659 in rounds of golf and spa services, $46,259 in food expenditures, $131,000 in room charges and $325 in pink golf balls amongst other charges.
“$325 dollars for pink golf balls, I don’t know why you need a pink golf ball,” Pace said.
Pace also pointed to a number of other company excursions, such as one to an island resort in South Carolina, which rang up $100,000 in expenditures.
Tochtrop said that she had been astounded when she saw the results of the state audit of the company last summer. “I was just appalled.” Tochtrop said. She said the company’s actions and its subsequent spending was a slap in the face to employers and employees.
Jenny Flanagan, executive director of Colorado Common Cause, said her group was behind HB 1211, which she said put in place reasonable guidelines to keep Pinnacol executives honest and to help the company develop stronger public trust.
During a state audit of Pinnacol spending last year, board members responded to the fact that auditors found that in respect to violations of travel expenses and entertainment policies, Pinnacol violated its own policies 75 percent of the time in the sample group it chose for evaluation. Ninety-six percent of the total dollars spent violated those policies.
The auditors said at the time that the spending “borderline[d] on abuse” under the Government Auditing Standards. Board members agreed.
“Pinnacol officials agreed with the state auditors that they needed better controls over their bonuses and travel and that’s exactly what we’re doing with this bill,” Pace said.