The Fenty administration is quietly but quickly working to head off a burgeoning scandal in the city’s workers’ compensation agency, The Washington Examiner has learned. Top administration officials, led by Attorney General Peter Nickles and City Administrator Neil Albert, have told the Office of Risk Management to come up with funds and clean up the records of the agency’s life insurance program, a city hall source said. Disabled workers have alleged publicly that the agency has been deducting life insurance benefits from bimonthly paychecks but has not paid for life insurance coverage. Risk Management is charged with monitoring the city’s liabilities. It has broad authority over workers’ compensation claims. Since 2004, about $2 million from 4,000 workers has gone into an insurance fund controlled by Risk Management, the source said. But the fund is continually out of money. It’s also difficult to trace the fund’s expenses, the source said, because of chaotic bookkeeping. Sources familiar with the agency told The Examiner that Albert and Nickles have ordered Risk Management Director Kelly Valentine to correct the problems with the fund. The sources said that the administration’s leaders are concerned with a scandal in an election year. Some polls show Adrian Fenty in a tight race with Council Chairman Vince Gray. Last week, Councilwoman Mary Cheh, D-Ward 3, asked for an audit of Risk Management. She said she had “concerns about improper denials … a general lack of knowledge of the relevant law … and even questions about whether the [agency] is properly managing claims.” The Examiner has also reported that the FBI is asking questions about the agency. Sources familiar with the investigation, which is in its earliest stages, say investigators have been interviewing witnesses since at least last September and are asking questions about insurance benefits as well as contracts handed out to private companies for various Risk Management jobs. Nickles and Albert each declined comment for this story. Asked if he stood by Valentine, Albert said, “I’m not going to talking about personnel.”
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