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June 2, 2014 at 6:07 AM

At least some are asking right questions in Insurance Commissioner case

Insurance Commissioner Mike Kreidler

Insurance Commissioner Mike Kreidler

At least some Olympians seem to be asking the right questions about a rather nasty allegation of misconduct in the Washington Office of the Insurance Commissioner.  Among them is state Sen. Mike Padden, R-Spokane Valley, chairman of the Senate Law and Justice Committee, who plans a hearing June 16 that will put the matter on center stage.

A former Spokane County District Court judge, Padden says he is disturbed at the accusation that has been leveled by administrative law judge Patricia Petersen. She claims her boss in the office threatened her job in order to obtain favorable rulings.

“I just know, from 12 years as a district court judge, that independence is a bedrock principle the entire judiciary should embrace,” Padden says.

Padden is a Republican and Insurance Commissioner Mike Kreidler is a Democrat, but the Senate committee’s inquiry is precisely what Olympia should be doing – poking, prodding, exposing facts and dealing with the central issue of the case. If only those who are more directly responsible felt the same way.

Petersen, the chief presiding officer in the insurance commissioner’s office, has been hearing administrative appeals for the last 19 years. Until last fall she earned glowing performance reviews. But when she started hearing high-stakes cases involving health-care reform, and she started ruling against the commissioner’s office, she claims a new supervisor, Deputy Commissioner James Odiorne, began pointing out the error of her opinions in a rather heavy-handed way.

In a complaint Petersen filed with the state auditor’s office, she says it started with private conversations in Odiorne’s office – documented with contemporaneous memos she wrote immediately afterward – and it culminated with a scathing and curiously timed “interim job evaluation” last month, on the eve of an appeal by Seattle Children’s Hospital in a particularly important health-care-reform case. The review appears to give her two months to embrace the commissioner’s policies and goals; in it Odiorne says he hopes Petersen can remain a member of the team.

Petersen cried foul, as she should have, but the official response has been disturbing. She filed a whistle-blower complaint with the state auditor’s office, the state’s watchdog agency, but the office decided not to investigate the charge. The Times has urged Auditor Troy Kelley to rethink his decision.

So Kreidler is left to investigate himself. Although he is doing the right thing by hiring an outside contractor, the inquiry will be vulnerable to criticism simply because his office is involved in the investigation. Kreidler, for his part, maintains that Odiorne did nothing wrong. Kreidler’s office also has demonstrated a tendency, reinforced by its plan for the investigation, to conflate Petersen’s rather serious charge with a minor one that has cropped up along the way. Kreidler’s office suspended Petersen on suspicion that she provided a copy of her complaint to one of the attorneys in the Seattle Children’s Hospital case, pending investigation. Kreidler’s staff says out-of-court communication is the issue, exactly the same issue as in the complaint Petersen has leveled at them. But it’s not the same. Even if it is true and even if something improper occurred — neither is certain — the issue hardly rises to the same level.

By contrast, Padden’s committee appears to be asking precisely the questions that ought to be asked, and it will be interesting to see what Kreidler’s response will be. A letter inviting Kreidler to testify poses questions such as:

  • When did Kreidler become aware of the matter, and how did he respond?
  • Did he attempt to address the matter with Odiorne?
  • Does his office have any written policies about communicating with judges regarding current cases?

Meanwhile, lawmakers ponder big-picture reforms, such as making it a crime for a state-agency employee to attempt to influence a judge outside of court. State Sen. Randi Becker, R-Eatonville, is considering introducing a bill next year that would move all appeals of insurance-commissioner rulings to the Office of Administrative Hearings. That is the same long-term solution advocated by the Times – and by former Attorney General Rob McKenna, in a blog post on his website, Smarter Government Washington. Says McKenna:

“The obvious question must be asked: Why is an administrative law judge making independent decisions about OIC priorities an employee of OIC in the first place? … Housing these hearings within OIC itself, with a judge who is expected to make independent judgments but is not independent of OIC, is a recipe for trouble.”

Maybe Washingtonians can feel a little better knowing that the Legislature has some ability to police state government, by raising issues like these. But the fact that the matter reached this point does not inspire confidence in the offices of the insurance commissioner and the auditor.

Comments | Topics: insurance commissioner, legislature, mike kreidler


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