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July 2nd, 2014 NIGEL JAQUISS | News Stories
 

House Of Cards

Documents suggest SAIF corp. fired its CEO based on “false and inaccurate” information.

news2_4035UNSAIF FOR WORK: “By opting to shoot first and ask questions later, SAIF’s board completely disregarded its obligations to act in the best interest of employees and policyholders,” fired SAIF Corp. CEO John Plotkin says. - IMAGE: Thomas Teal
SAIF Corp. is in the insurance business, an industry defined by the word “caution.”

Yet thousands of pages of records from inside the state-owned workers’ compensation insurer suggest that SAIF’s board of directors failed to use any caution when it abruptly fired CEO John Plotkin two months ago.

Plotkin was dismissed by the board after only three months at his $320,000-a-year job for allegedly making inappropriate comments in front of employees. Plotkin fought to keep his job, and scores of SAIF employees came to his defense. But the board fired him anyway May 9.

Now, records obtained by WW show that SAIF officials failed to adequately vet the allegations against Plotkin. The records make clear that at least four officials, including three of the agency’s top managers, said allegations against Plotkin were untrue.

“I’m now hearing that statements in [the human resources department’s] notes attributed to others are also false or inaccurate,” SAIF general counsel Shannon Rickard wrote in a May 22 email. “The common theme appears to be disbelief and anger that no one from HR bothered to pick up the phone to ask people whether the statements were true before taking them forward.” 

In other words, a company that specializes in investigating on-the-job injury claims had tossed aside its leader without substantiating the information used against him.

It gets worse. Other documents, examined by WW, illustrate a parochial, insular culture at SAIF that Plotkin, a newcomer to Oregon, threatened to change.

Employees credited Plotkin with a more open and welcoming management style than that of his predecessor, Brenda Rocklin. And many SAIF workers, including top officials, suspected executives still loyal to Rocklin helped engineer Plotkin’s firing. Internal phone records show Rocklin spoke frequently with one SAIF executive who played a key role in ousting Plotkin.

Despite calls for an independent investigation, SAIF’s board blocked such an inquiry, ignoring evidence one top executive may have lied about his role in pushing Plotkin out. That executive, Chris Davie, has since resigned.

The drama inside the agency is important for several reasons. SAIF is supposed to provide solid, reliable workers’ compensation insurance to thousands of Oregon businesses. A failure to handle its own affairs in a competent manner could undermine its credibility. It could also cost the state a lot of money if Plotkin sues for wrongful termination, as he is threatening to do.


SAIF—which stands for State Accident Insurance Fund—is one of Oregon’s most important, if least known, state agencies. 

Oregon law requires employers to carry workers’ compensation insurance, and SAIF covers more than 50,000 Oregon companies and 600,000 workers. SAIF is a public corporation, but it gets no taxpayer money: Its revenues come from insurance premiums paid by employers.

Lawmakers created the agency a century ago to help provide employers affordable coverage for their workers.

Plotkin, 58, came to Salem from Denver, where he’d served as interim CEO of Pinnacol, Colorado’s version of SAIF. 

In an April speech, SAIF board chairwoman Catherine Travis, a Portland lawyer, said the agency had selected Plotkin from a field of 250 applicants. “We chose well when we chose John Plotkin to lead SAIF forward to begin our next 100 years,” Travis said.

Plotkin took over an agency whose history includes periodic crises and long periods of calm. 

In 1990, then-Gov. Neil Goldschmidt rescued SAIF from financial ruin, brokering a contentious agreement between business and labor called “the Mahonia Hall accords.” 

Then in 2003, Goldschmidt, out of office, landed a $20,000-a-month lobbying contract with the state-owned insurer. Its revelation and the subsequent investigation cost then-SAIF CEO Kathy Keene her job. 

Then-Gov. Ted Kulongoski appointed Rocklin, now 58, to SAIF’s top job in August 2004. Gov. John Kitzhaber had previously called on Rocklin, then a lawyer working for the Oregon Department of Justice, to clean up the scandal-plagued Oregon Lottery.

For nine years under Rocklin’s management, governors got what they wanted from SAIF: steady financial results and no drama.  She retired in February.

Plotkin, with a background as a trial lawyer, arrived at SAIF on Feb. 3 and set about to make what seemed minor changes to the agency’s culture.

For starters, Plotkin asked that SAIF establish a bring-your-child-to-work day, something the agency had never done before.

Records show such changes made some officials uncomfortable. One of those who opposed the suggestion was Ryan Fleming, SAIF’s vice president of human resources, who would later play a key role in Plotkin’s ouster.

“I have coordinated these events at my previous employer, and they are a ton of work,” Fleming wrote in a March 26 email responding to Plotkin’s suggestion. “I prefer that we continue the approach SAIF has taken in the past.”

Plotkin also wanted to relax SAIF’s formal dress code. “I want to get [management] out of the clothing business,” he wrote in an April email.

Davie—a 41-year SAIF veteran and the agency’s vice president of government affairs—disagreed. 

“I agree that there is no evidence that the quality of work has deteriorated when we adopt occasional casual days,” Davie wrote in an April 24 email. “I would still vote not to do this because I think everyday casual dress will diminish professionalism.”

Both changes went into effect. Numerous emails and posts on SAIF’s internal blog show that many employees responded positively to such changes, and to being invited to meet with Plotkin in meetings intended to make the CEO more accessible.

“I got a lot of positive feedback from employees,” Plotkin tells WW. “And as far as I could tell, my interactions with board members went well.”

Yet, on Saturday, May 3, Travis, the SAIF board chairwoman, called Plotkin and requested that he resign.

Plotkin says he was “stunned.” In his three months at SAIF, he says, there had been no warning that anyone on the board was dissatisfied with his performance. Nor had anyone suggested financial impropriety or potentially criminal behavior on his part—nothing that seemed to require precipitous action.

Rather, Plotkin says, Travis told him he’d made comments that could threaten “a protected class,” but she provided no details. 

Plotkin pushed for an explanation. The next day, Travis called back, this time with what she said was evidence.

She said Plotkin had used the phrase “checking jock-straps,”  to describe SAIF’s attention to its dress code. 

In another incident, Plotkin had brought his English bulldog, Peligrosso, to work at the invitation of employees. Plotkin supposedly told a female employee walking her dog, a black Lab, to stay away from Peligrosso because he “liked to hump black dogs.”

And that was the evidence. Plotkin says Travis presented him nothing in writing and gave him no chance to respond to the accusations, which he says were either false or taken out of context.

Oregon Department of Justice lawyers representing SAIF later told Plotkin’s lawyer of two other issues: At a meeting, Plotkin told a SAIF employee to “speak English, not actuary.” The employee was Asian and another employee allegedly took offense. And Plotkin allegedly made a comment to a female employee about “shaking” her body while working out and used the word “tits” in conversation with Rocklin. 

Plotkin asked for additional time and asked to address the SAIF board on the morning of May 9. Nearly 200 employees used vacation time to attend the meeting, where Plotkin was fired. 

“I have never been more embarrassed to work for this company than I am today,” wrote one anonymous employee on the SAIF blog May 14. “Due to the actions of two vice presidents (being controlled by our prior CEO), the board of directors has terminated a great leader.”


That former CEO, Rocklin, worked her last day at SAIF on Feb. 28. But in some ways she never left. (Rocklin, Davie and Travis all declined to comment for this story, citing potential litigation.) 

Records show Rocklin remained in regular telephone contact with two SAIF executives, effectively going around Plotkin. 

The executives she often communicated with were later suspected of helping engineer Plotkin’s firing: Davie, the government affairs director, and Fleming, the HR director. Rocklin was regularly discussing SAIF business with them. On March 5, for instance, Rocklin emailed Davie and Fleming, suggesting two Southern Oregon bankers for an open spot on SAIF’s board.

Documents obtained by WW show Rocklin and Davie spent an extraordinary amount of time on the phone together after Plotkin took over as CEO. 

Between Feb. 3, when Plotkin started work, and early June, records for Davie’s landline and cellphone show that he and Rocklin spoke on the phone at least 95 times for a total of more than 1,530 minutes, or 25½ hours.

Numerous emails between Davie and Fleming show that they worked feverishly to prepare for Plotkin’s firing while he was in Washington, D.C., during the last week of April.

They game-planned different scenarios, planned talking points and even prepared an email to John Gilkey, vice president of policyholder services, to take over as interim CEO.

When Plotkin was fired, Gilkey got the job.


Records show the process used to fire Plotkin troubled senior executives.

Within two weeks, Rickard, SAIF’s general counsel, had compiled evidence that allegations against Plotkin had been, at best, unverified. 

On May 22, she told SAIF interim CEO Gilkey in an email about the “false or inaccurate” information about Plotkin sent to the board by SAIF’s HR department, and that employees with first-hand knowledge of the allegations had never been asked to verify what they heard or saw.

Others raised questions as well.

“I think we might have a problem with the veracity of the investigation that [HR] conducted,” SAIF chief information officer Rick Hanson wrote to Gilkey, also on May 22. “I think it would be really wise for us to engage an independent party to verify the entire investigation. If there are inaccuracies, it’s better for us to figure it out ourselves as soon as possible.” 

But Gilkey and the board stonewalled Hanson and other top executives’ requests for an independent investigation.  

At a June 4 meeting of SAIF’s top managers, Hanson continued to push for transparency. 

“Rick said,” according to notes from the meeting, “that nothing the board did was defensible.” 

Records show that Rickard and other top managers thought Davie had lied to them about his role in Plotkin’s departure.

Rickard, who also attended the June 4 meeting, wrote in her notes, “I, too, was upset that [Davie] had been untruthful with all of us.”


Plotkin’s firing raises two other troubling issues.

When she was CEO, Rocklin faced complaints about her forceful management style. The SAIF board hired an outside law firm to investigate. She was cleared.

But in the case of Plotkin, the board accepted the HR department’s representations without seeking independent advice.

In fact, records show, there was no documentation in Plotkin’s personnel file of any criticism of his performance from subordinates or board members.

Other documents show Travis approached Rocklin in the days before Plotkin’s firing, asking her if she’d be willing to take her old job back. Notes from the conversation show Rocklin said yes. 

If Rocklin indeed exerted influence at SAIF after her retirement, that could create a legal problem for her. 

Oregon ethics law prohibits former state directors from interfering with their old agencies: “A public official who as part of the official’s duties invested public funds shall not within two years after the official ceases to hold the position…influence or try to influence the agency.”

Meanwhile, Kitzhaber has been an absentee landlord at SAIF.

Plotkin says Kitzhaber played no role in his hiring, never made an effort to meet him, and ignored Plotkin’s request for a meeting when the board threatened his termination.

Kitzhaber has been neglectful of the board, too: Two of the board members who fired Plotkin—chairwoman Travis and vice chairman Robb Van Cleave—saw their terms expire in May 2013, and Kitzhaber has yet to name their replacements. The governor has left another spot on the board vacant for five months.

A spokeswoman for Kitzhaber, Melissa Navas, denies the governor has ignored SAIF. She says the board members stayed beyond their terms to help with the CEO transition and that the governor will replace them and fill the board vacancy in coming months. 

On June 24, Davie, suspected of lying about his role in undermining Plotkin, announced he was retiring, six months earlier than planned.

And July 1, the day SAIF officially celebrated its 100th birthday, Portland employment lawyer Dana Sullivan notified the state of Plotkin’s intention to sue for wrongful termination. 

“This situation has all the makings of a Shakespearean drama—deceit, betrayal and John Plotkin, the inspiring new leader,  with a knife in his back,” Sullivan told WW.  “The last act, however, has yet to be played. It’s not too late for SAIF to do the right thing and give John his job back.”  

 
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