Beacon Mutual Revisited
I’ve tried to keep my eye on Beacon Mutual’s bid to privatize–and thus remove government oversight–and have posted a couple times (here & here) on why I’m not sure it’s a good idea. The Governor isn’t too keen on it either. In short, BM is a government-funded entity that was created to serve a specific purpose–underwriting Workman’s Comp. for small businesses– and the move to privatize doesn’t seem like it would be beneficial for RI employers. With no State oversight, BM would be allowed to make their own rules. For example, they could set different standards for different companies depending on (let’s just say) whether or not one of the BM board members happens to own that company. That was a hypothetical until yesterday (read-on).
Meanwhile, Beacon Mutual has already created a private company–on its own–in anticipation of receiving the go-ahead to expand out of state. Their stated goal for such a move is to cover the employees of RI businesses who work outside of RI. Sounds relatively benign, but as my previous posts indicate, there are questions regarding whether or not there may be some alterior motives.
Despite these concerns, the BM move from public to private has already been approved by the RI Senate. And while the ProJo tries to undersell the brewing controversy (notice the headline and especially the “lead”) by pointing out that an independent audit determined there is no wrongdoing going on at BM, the real story is that there wasn’t enough information provided by former Manpower Pres. Sheldon Sollosy–who also served as the BM Chairman–to come to any conclusion.
Sollosy has resigned as BM Chairman as it appears that he took advantage of that position to help him get a break on insurance rates for his business, Manpower, Inc. He did this by simply not providing the correct information on payroll figures to BM auditors. They, in turn, did not take appropriate action as outlined by the bylaws.
Finally, Governor Carcieri recieved and is publicizing a letter from a BM board member who is in disagreement with the actions of the majority of her fellow members. Dan Yorke (who has been all over this) has the letter as well as some more information regarding Sollosy.
It’s a little complicated, but if you’re interested, read the items to which I linked. The question is: is it a proper–or wise–use of tax-payer dollars to allow this public-to-private move? How much will the individual board members benefit from this maneuver? What are their motives and–in light of the Sollosy resignation–can they be trusted?
I’m not well-versed in the financial world (Don H.?), so I’d be interested to see if anyone thinks there’s any “there, there.”