4-19-2011; Political Science 101 for Governor Quinn—The Buck Stops THERE!!!

As veteran observers of Illinois WC political matrix, we remain mildly perplexed to see Governor Pat Quinn submit the legislative proposals outlined above to reform Illinois workers’ compensation system. We want his staff and our readers to understand our view this unprecedented legislative action is completely unnecessary for reasons we will outline. That said, we do feel action by the Governor is necessary, we just don’t think legislative action is needed by our state’s chief executive to make this system more functional for Illinois business and those nice folks at Caterpillar who want to keep work in our state. We also want to salute the Governor and his staff for seeing there is an issue they need to address—in our view, Illinois’ workers’ compensation system needs to be brought back to the main stream of U.S. work injury benefit systems and the Governor should have a key role in doing it. Here is a simple game plan.

How did Illinois get to be the third highest state for WC premiums in the U.S.?

If you have been reading these “blogs” over the last ten years, you may recall currently-convicted-felon-then-gubernatorial-candidate Rod Blagojevich was in a three-way primary fight in 2002. To push his candidacy over the top, he made a bargain with the Plaintiff/Petitioner bar in Madison County. The bargain provided Blago the votes to win the primary. In exchange, he provided basically full control over what was then called the “Industrial Commission” to an Illinois State Senator from Madison County. That Senator quietly became the head of what we call the “secret-powers-that-be” who run the Commission.

What happened shortly after Blago was elected Governor was an aggressive claimant lawyer from Madison County was appointed to be the Chairman of the Commission. He did a couple of interesting things. First, he changed the name of the “Industrial Commission” to “Workers’ Compensation Commission” and spent the money to change all the letterhead and signs all across the state. I don’t remember anyone at the joint being asked about this name change and we assure our readers this change didn’t come from an “agreed bill process.” The old-timers groaned into their coffees about the change but basically let this pushy new leader have his way.

Second, in a much more important political step, he changed the funding of the newly-named Workers’ Compensation Commission to move it away from the state’s unpredictable General Revenue Fund to create shiny new funding comprised of a levy solely on Illinois business. In our view, we expected Illinois business leaders to go nuts about the new levy but it was like waiting to hear a pin drop in a crowded bar; we learned business reps were used to paying such levies in other states. The business leaders basically fell right in line, even though our Illinois State Chamber did start and win a settlement in litigation about initial miscalculation of the levy.

Why was this second change so politically important? Well, it resulted in the size and budget of the Commission basically tripling. Prior to the funding surge, observers felt a lot fewer Arbitrators and Commissioners had lots more cases and were less active in handling than today. The seminal change after coming to power in 2002 was the new Chairman was a hotly pro-Plaintiff attorney. He basically added lots of new claimant lawyers or “cross-over” defense lawyers as hearing officers who all towed a party line—increase WC benefit levels. The Workers’ Compensation Commission added a third three-member administrative review panel and the composition of all three panels was two very liberal Commissioners and one defense Commissioner—the defense Commissioners got used to writing lots of dissents. The result of that change was a Commission that almost instantly became wildly liberal and had resources to make claims move to hearing much faster, as the new Chairman wanted.

Please note Illinois WC benefits skyrocketed even though there were no legislative changes from 2002 until basically February 1, 2006 when the 2005 Amendments to the Workers’ Compensation Act became effective. Benefits rapidly increased because the new liberal Arbitrators/Commissioners stripped out traditional defenses, greatly expanded WC coverage in ways we have reported and they increased the traditional permanency awards across the board. The more conservative Arbitrators got the message and followed to become more liberal basically to avoid sticking out and possibly getting canned.

As we told you last week, WC claims and concomitant costs from State of Illinois workers similarly shot up. The “scandal” that is the situation at Menard C.C. and other state government facilities across Illinois directly arose from an unprecedented situation in which Illinois state workers were being educated on how to have “non-accident” claims in which you could get a simple and minimally invasive surgery and bank literally tens of thousands for it. We note the admission by Illinois state officials they were managing 25,000 claims in 2009 should be compared to the IWCC’s annual report from that year where the Commission reports they had 95,600 total claims. These numbers mean State of Illinois workers would have about one in every four claims at the IWCC. As we have said, those claims poison the system for private industry—we urge the Governor to look into what you are doing with your own WC program; bring in consultants, spend a few bucks and save jillions.

In summary, Illinois went from the middle of the pack on workers’ comp costs to the its current lofty position as Third-Rottenest.

Paper Beats Rock; Rock beats Scissors; Governor Quinn Runs the Commission and Doesn’t Need to Sponsor WC Reform Legislation to cut WC costs

In simplest political terms, the Governor doesn’t have to ask the Illinois legislature to have the members of the Workers’ Compensation Commission do something he wants. They work for him. By “work for him” we mean, he can fire any or all of them. In fact, whether he knows it or not, he selected the current Chairman. We assume the Governor’s staff may have handled this political appointment and we suggest his staff dash off an email to remind him how it happened. While we are not aware of any reason to do so and consider the current Chairman very competent, we want our readers to understand the Chairman can be sanctioned, fired or suspended by the Governor at our chief executive’s whim—in Illinois, the Chairman of the IWCC works for and reports to the Governor.

The Chairman and the nine Commissioners all have terms in office that will expire during the Governor’s current elected term. He can ask for any or all of their resignations at any time and would most probably get them. If you read the Illinois Workers’ Compensation Act carefully, the Arbitrators work for the Commissioners and there is a procedure in our WC Act that allows the Arbitrators to be rapidly removed from office. Trust us, they have all read it and know they have political positions that can be pulled as fast as it takes to type the period at the end of this sentence.

The point of all these details is patent. If the Governor wants all Commissioners and Arbitrators to wear pink bowties and purple socks, he can tell them to do so; they work for him. If the Governor wants the Illinois Workers’ Compensation system to move from third in the U.S. in workers’ comp premiums to any level; say 50%; he doesn’t need to waste time with the Illinois legislature. All he has to do is convene a meeting of the Commissioners and Arbitrators and tell them to quietly make it happen and tell the whiny Plaintiff/Petitioner lawyers to quiet down and buy fewer Ferraris as their hands are zip-tied. In fact, the Gov doesn’t have to waste time with a meeting, he can send an email, a “text”, a “Tweet” or simply make a public announcement that he wants them to make it happen and if they don’t, he will start to find and appoint new folks who will.

The Illinois Legislature is One of the Wackiest Places in the Known Universe

Having seen and been asked by numerous readers about the silliness of last week’s “Bradley Bill” that is supposed to end the workers’ compensation system in this state, we want our readers to note two things: First, there is absolutely no chance the Bradley Bill might pass and it wasn’t sponsored and presented with the thought it would pass. We feel a bill to resolve work injury disputes in this state by belly-bumping would have a similar chance at passage. If you want the reasons it was sponsored, send a reply. In short, it is part of the misdirection, stalling and generally confusing things which legislators and lobbyists on both sides do to each other.

Legislators sponsor “poison pill” amendments to bills, fight over nuances and trifles and try to look to the outside world like they have the slightest idea what they are doing. In the workers’ compensation arena, we are sure they don’t. The folks at the IWCC we have listed do know what they are doing and if they aren’t sure, they ask the many lawyers running around the place what to do.

As we have advised all of you, the Legislature can pass five hundred new bills designed to cut workers’ compensation costs—if the Commissioners and Arbitrators (and the lawyers they talk to) don’t like them, they are almost certain to “steam right around” the legislation, as they did with the pro-business provisions in the new Amendments to the WC Act in 2005-2006.

If the Governor wants effective and quiet WC reform; if he wants to tell Caterpillar’s CEO and businesspeople all over Illinois and the world that we are going to return to become a competitive state in the workers’ compensation arena, we urge him to stop wasting his time in the Legislature. Go to the source (or tell them to come to you) and quietly tell them to make it happen. Tell them to limit WC coverage along traditional lines. Tell them to stop the contradictions and silliness that have stripped out lots of traditional defenses. Tell them to start cutting permanency awards across the board. And for gosh sakes, start to limit wage loss differential and total and permanent claims to folks who are severely injured--don’t give claimants  six and seven-figure awards for workers with one broken bone whose lawyers find a way to get them a “golden diagnosis” of permanent restrictions.

And then watch this space and six months from now, we will let the Governor know where Illinois WC is at and where it is going. We appreciate your thoughts and comments. Please do not hesitate to post them on our award-winning blog at www.keefe-law.com/blog.