Ag Says Takeover Will Save Money

Idaho’s attorney general wants to take money paid by employers for workers’ compensation insurance and use it to fund his office, a Sandpoint lawyer charges.

Attorney Joseph Jarzabek has gone to court to challenge the attorney general’s takeover of legal services for all state agencies, saying the state Insurance Fund shouldn’t be part of that new system.

“The money they’re talking about is policyholders’. He’s using it to fund his office, and that’s wrong,” Jarzabek said.

But the Attorney General’s Office says the change will actually save policy holders a lot of money. Deputy Attorney General Jack McMahon also dismissed Jarzabek’s claim that the change will create conflicts of interest.

Attorney General Al Lance promoted his takeover of all the state’s legal services as a way to save taxpayers “hundreds of thousands, if not millions per year.”

The Legislature approved the move after exempting a number of state agencies, including the Legislature itself, the governor’s office and state colleges and universities.

Previously, agency heads were free to hire whomever they wanted for legal representation. Some deputy attorneys general represented state agencies, but only through contracts between the offices.

McMahon said the state Insurance Fund has contracted with three private attorneys for in-house legal representation, and the three have earned up to $105,000 a year apiece from the contracts. Under the new system, three deputy attorneys general will take over those duties, at a cost of about $50,000 a year apiece.

Two of the three contract attorneys will join the Attorney General’s Office, one in the same job.

In a petition filed last week in 1st District Court, Jarzabek also says the changes mean injured workers with claims must litigate against the same state agency that represents the state Industrial Commission. The commission decides the workers’ claims. Jarzabek says that’s a conflict of interest.

But McMahon said that’s not the case. The fund will continue to contract with various attorneys around the state to handle injured workers’ claims before the Industrial Commission.

Plus, McMahon said, the Attorney General’s Office has only one deputy at the Industrial Commission, and that deputy mainly handles enforcement against employers who don’t pay their premiums. The attorneys who hear cases there are unconnected with the Attorney General’s Office.

Jarzabek brought his legal action on behalf of Patricia Berg, a Sandpoint woman who was injured moving a machine at work, and all other injured workers in the state who have claims against the Insurance Fund.

Jarzabek is not asking for any money in the court action. “We’re just asking the attorney general to stop from taking over legal operations of the state Insurance Fund.”

, DataTimes