The Fenty administration took $10 million from a workers’ insurance fund that is now at the center of multiple investigations, sources told The Washington Examiner.
Fenty and his attorney general, Peter Nickles, have now acknowledged that hundreds of disabled workers were charged for life insurance but weren’t actually given the policies. The administration announced that it was handing the matter over to the city’s inspector general last week.
The workers’ money, which might be worth up to $6 million, went into the city’s workers’ compensation fund.
Sources familiar with the investigations into the scandal told The Examiner that the Fenty administration took some $10 million from the workers’ compensation fund to balance the fiscal 2009 budget. Then City Administrator Dan Tangherlini met with finance and Risk Management agency officials in early 2008 and discovered that the workers’ comp money had continually “rolled over” from previous years, the sources said.
Tangherlini assumed that insurance claims were falling and that the city was safe in raiding the fund, the sources said, speaking on condition of anonymity because of the sensitivity of the investigations.
The fund has since been under “spending pressure” and some workers have complained that they are being bilked out of both life and health insurance benefits.
As first reported by The Examiner, the FBI, the city auditor and the finance office’s integrity unit are all probing the fund and the agency that controlled it, the Office of Risk Management.
Beside the missing insurance benefits, authorities have also been told that contracts went to friends of Risk Management Director Kelly Valentine.
Authorities have not found any evidence of corruption.
Tangherlini has since become a top official in President Obama’s Treasury Department. He didn’t respond to requests seeking comment.
At the time, Fenty hailed Tangherlini’s efforts.
“Our budget team, led by City Administrator Dan Tangherlini, has done an excellent job of putting this plan together,” Fenty said in March 2008.
Nickles couldn’t be reached for comment. He said last week that top officials had no idea there were problems until they saw public hearings earlier this year.
For some of the disabled workers who have been fighting for their benefits for years, news of the investigations have brought little relief.
“I haven’t missed a [council] meeting in six years. We’ve tried to get this information out,” said Gaynell Nixon, who has organized her fellow workers to bring attention to the scandal. “All of the suffering of the claimants –including myself –falls on the council as well as the Fenty administration.”
