March 30, 2012 07:41 PM UTC

Shining Turds--Nice Work If You Can Get It

• 14 Comments
• by: Colorado Pols

SATURDAY UPDATE: In a devastating front-page story today, reporter Tim Hoover of the Denver paper follows up the Denver Business Journal’s scoop–with reaction from both sides of the aisle to disclosure of huge sums spent on “lobbying, advertising and public relations services” in support of state-chartered Pinnacol Assurance’s privatization bid. Hoover notes that these funds came from premiums paid by policyholders, yet policyholders are some of the most vocal opponents of privatization. And once again, PInnacol’s bad behavior has united such disparate voices as Sens. Morgan Carroll (D) and Scott Renfroe (R) in condemnation.

The disclosure of the embarrassing amount spent on lobbying and public relations in support of privatizing Pinnacol, particularly after the proposal ended in failure earlier this year, provokes very serious and fundamental questions about the motivation for the whole effort. If the privatization of Pinnacol was in anyone’s best interests other than Pinnacol, would it be necessary to bankroll a full-court lobbyist and public relations press to sell it?

And of all the issues for Gov. John Hickenlooper to invest his celebrated political capital on, why has he chosen to become the face of Pinnacol’s privatization? As today’s story makes clear, the interests most angered by this proposal are the very same “business interests” Hickenlooper claims he has such great relations with. Why won’t he listen to them now?

Bottom line: with this latest round of disastrous press, we’d say any hope Gov. Hickenlooper had of resurrecting a Pinnacol privatization deal this year is long gone. And before Hickenlooper and whoever is motivating him behind the scenes to keep trying this again and again make their next attempt, he had better explain why this is so damned important.

Because the answers folks will logically start coming up with on their own…aren’t good.

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Reports the Denver Business Journal’s Ed Sealover today in a story probably worth subscribing for all by itself (and you’ll need to in order to read it), what do you think it costs to talk–seriously, folks, just talk–about the privatization of Pinnacol Assurance, the scandal-plagued state chartered tax-exempt workman’s comp insurer? You know, this proposal that people don’t seem to want to go through with when they actually consider it, but keeps coming back over and over as if it’s the most pressing issue on the entire agenda of the state of Colorado?

Answer: between the lawyers, the lobbyists, and the army of PR flacks, a lot:

Pinnacol Assurance, the state-chartered workers’ compensation insurer, has spent $3.5 million since last September to boost its latest bid to turn private – much of it going for lobbying, public relations, legal services and investment bankers’ analysis.

A portion of the money, which comes from current policyholders’ premiums, also paid the salary of Denver investor John Huggins, chairman of a state task force appointed by Gov. John Hickenlooper to study the proposal. The task force was charged with determining whether privatization is good for Pinnacol and the state.

Here’s a chart of expenses supplied by the DBJ:

We were immediately struck by the heavy spending on “PR services,” in fact just about every “art of public persuasion” outfit in the state of Colorado, regardless of party affiliation, getting a generous piece of the action. Without stepping on too many toes, let us just say this is textbook mollification by retainer. Every for-hire “influential” you can find on both sides–check! Hire Mary Alice Mandarich to bulldog “lobby” reluctant Democrats in the legislature–check! Josh Penry’s EIS Solutions and Democratic powerhouse Onsight Public Affairs—checks!

Don’t get us wrong, these consultants have businesses to run. The primary ethical responsibility, like we said about the political consultants who lined up against Boulder’s municipalization campaign in the employ of Xcel Energy, lies with those writing the checks.

Which gets back to an earlier question, as the DBJ reports separately today:

Pinnacol Assurance paid the chairman of a governor-appointed task force examining whether it was in the State of Colorado’s interest to let the quasi-public insurer become a private, for-profit company.

The arrangement, which paid Denver investor and former city economic development official John Huggins $120,384, has drawn fire from some of the task force members and legislative leaders. They said in interviews that paying Huggins’ salary raises serious conflict-of-interest questions.

Two questions, actually: how can anyone expect impartiality from such an arrangement? And the second, once you realize how naïve your first question was: how bad a deal is this to have been rejected despite so much of the Colorado political consultant class, not to mention the chairman of the task force “examining” the proposal, on the payroll? As we’ve repeatedly asked before, who benefits from the privatization of Pinnacol besides Pinnacol?

Whatever, the honest consultants will answer. The checks still cashed.