Chicago Mayor Lori Lightfoot says city will hire outside firm to oversee workers’ comp program

Mayor Lori Lightfoot talks to reporters following a City Council meeting at City Hall on June 12, 2019. (Jose M. Osorio/Chicago Tribune)

Gregory Pratt and John ByrneContact Reporters

Chicago Tribune

Chicago will transfer day-to-day control of its $100 million-per-year city workers’ compensation program, which for decades was largely handled in secret under the auspices of now-indicted Ald. Edward Burke, to a private company, Mayor Lori Lightfoot announced Thursday.

A recent audit, performed by outside auditing firm Grant Thornton, found that the program did not operate according to industry best practices, staff members were inadequately trained, and it lacked “comprehensive policies and procedures governing claim handling, which can lead to inconsistent claim outcomes for workers,” according to the mayor’s office.

Chicago’s workers’ comp program also lacks key protections against fraud, though auditors did not specifically identify any in their report, Grant Thornton said.

To deal with the workers’ comp program going forward, the city is planning to transfer day-to-day operations to Gallagher Bassett, an international public sector claims firm, Lightfoot said. The administration has not yet reached a final agreement on a contract with the firm, Lightfoot said.

“While other cities across the country have long ago reformed and professionalized their own programs, here in Chicago we continue to operate in such an opaque and antiquated manner that even members of our own City Council didn’t know how the program worked,” Lightfoot said. “That all ends now.”

The workers’ compensation program was thrust into the spotlight in November, when federal agents raided the City Hall offices of Burke. At the time, Burke was the powerful City Council Finance Committee chairman who had kept the program under tight wraps during his more than three decades of nearly continuous control of the committee, resisting efforts by the city inspector general to look into the program’s operations.

After federal prosecutors charged Burke in early January with attempted extortion for allegedly trying to shake down Burger King restaurateurs, Mayor Rahm Emanuel announced he would remove the program from the committee and instead put the city Finance Department in charge of it.

Emanuel then ordered the outside audit of workers’ compensation, which was completed days before he left office.

In most cities, workers’ compensation is overseen by the human resources or law departments. But in Chicago, it’s been controlled closely by Burke with little oversight.

In 2012, Inspector General Joseph Ferguson sought access to records related to the workers’ compensation program to review it for waste and inefficiency. Burke denied Ferguson access to those records, contending they fell outside the watchdog’s jurisdiction.

That same year, a federal grand jury issued subpoenas for the program’s database, injury records, medical assessments and claim investigation records dating to January 2006. Federal authorities also had subpoenaed similar records in 2006. Nothing appeared to have come of those requests.

In their executive summary, the auditors wrote that the program “is in need of substantial improvement to operate more effectively as well as prevent and detect potential fraud, waste and abuse.”

“While we were not tasked with nor did we investigate potential instances of fraud, we did identify significant control deficiencies and weaknesses that would create an environment where (fraud, waste and abuse) could be present,” the auditors said.

Most workers’ comp claims weren’t in compliance with rules or the program’s own internal claim administration guidelines, the auditors wrote.

The workers’ comp program was operating without any fraud risk policy, offered no anti-fraud training, and did not conduct fraud awareness initiatives, the report said.

It also did not maintain an anonymous fraud tip hotline and did not have “documented policies or procedures to ensure consistent, reliable investigations,” the report said.

The report recommended establishing a fraud risk management policy and annual anti-fraud training, the report said.

Auditors also recommended establishing guidelines for regularly analyzing claims “for the identification of unexpected changes over time,” the report said.

The report recommended checking claims “immediately following a holiday,” as “a high number of claims immediately following a holiday could be considered anomalous, outside of work injuries and is often indicative of (fraud, waste and abuse) in workers’ compensation claims.”

Speaking outside her office about the report, Lightfoot called the audit “a pretty damning indictment of how this program is administered. There’s I think virtually no point on which Grant Thornton believed this program was operating anything close to best practices.”

The review also found that there were nearly 1,300 open workers’ comp claims, and about 600 of those were a decade or more old, Lightfoot said.

“The fact that we’ve got these decades-old cases and we’ve spent about $300 million and these claims are still unresolved, meaning there’s still a potential additional payout on top of that, doesn’t make sense,” Lightfoot said.

Lightfoot said the audit’s conclusion that the program was mismanaged and “utterly ill-equipped to prevent fraud and abuse” should come as no surprise.

Lightfoot also took the opportunity to decry Burke, a frequent target whose legal problems helped catapult her longshot bid for mayor into a victory in the April election. She said the system Burke ran “was ripe for corruption.”

“A program of this size and significance has no business being controlled by a single member of the City Council, not to mention controlled without meaningful oversight controls or transparency,” Lightfoot said.

Asked how much the reform will save taxpayers, Lightfoot said she didn’t know because there will also be startup costs to modernizing the workers’ comp program. Much of its work is currently done on paper, not electronically, she said.

But, she added, “over time, there’s no question it’ll save us substantial sums.”

Copyright © 2019, Chicago Tribune

FOX NEWS on Mayor Lightfoot’s Workers’ Compensation needed changes to modernize Chicago

CHICAGO (AP) – In another move to reform how the city conducts its business, Mayor Lori Lightfoot says Chicago will transfer day-to-day control of its $100 million-per-year workers’ compensation program to a private company.

The program for decades was handled in secret under the control of now-indicted Alderman Edward Burke. The long-time alderman was charged in January with attempted extortion for allegedly trying to shake down restaurateurs.

Lightfoot said Thursday a recent audit of the program by accounting firm Grant Thornton found there were nearly 1,300 open workers’ compensation claims.

Lightfoot noted other cities long ago reformed and professionalized their own programs. She said Chicago continued to operate in an opaque and antiquated manner that even members of the City Council didn’t know how the program worked.

Mayor Lori Lightfoot WILL reform Burke and Workers’ Compensation Video Craig Walls ABC 7 News

By Craig WallThursday, June 13, 2019 6:17PMCHICAGO (WLS) — Mayor Lori Lightfoot announced a series of changes to the city’s workers’ compensation program after an independent audit exposed widespread issues.

“The system that Ed Burke ran was ripe for corruption,” Lightfoot said.

Burke controlled the workers’ compensation fund as the 30-year chair of the Finance Committee. Grant Thornton LLP audited the workers’ compensation program after Burke’s office was raided by the FBI and he was stripped of his powers.

“There were no controls in place according to Grant Thornton to prevent fraud, waste and abuse,” Lightfoot said.

According to a whistleblower who sued the city last year over Burke’s handling of the program, there were two sets of rules.

“The rules are: If you’re clouted, you’re injured, you get taken care of,” said Patrick McDonough a city Water Department employee currently on disability due to a workers’ compensation accident. “If you’re someone who’s not clouted or a whistleblower such as myself, your checks wouldn’t come in on time, they’d look for any excuse to stop your benefits.”

The report revealed there were more than 1,300 open cases, more than 600 of which are more than a decade old.

“During this time, Chicago taxpayers paid nearly $300 million on these open claims,” Lightfoot said.

The mayor announced a series of reforms including the use of best practices to handle claims, adopting new technology to expedite claims and control medical costs, implementing a comprehensive “return-to-work” program and creating a process to handle legacy claims.

McDonough discovered through a series of Freedom of Information Act requests that many of the people running the program for Burke were not qualified.

“The people Edward Burke was hiring at the Committee on Finance were dog walkers, were hair dressers were people who had no background in workers’ comp whatsoever,” McDonough said.

As part of the effort to reform workers’ comp, the city has hired an outside firm to help introduce new controls and procedures to make the system more accountable.

Lightfoot could not say how much the changes will save the city, but she says going forward it will operate with transparency and oversight by the City Council and the Inspector General’s office.

Changes Coming to Chicago’s Embattled Workers’ Comp System Amanda Vinicky WTTW Chicago

“The system that Ed Burke ran was ripe for corruption,” Chicago Mayor Lori Lightfoot said Thursday, June 13, 2019. (WTTW News)

For a long time – decades – a program costing Chicago more than $100 million a year was in the control of one alderman.

Ald. Ed Burke, the former chair of the City Council’s Finance Committee, lost control of the workers’ compensation program after prosecutors accused him of attempted extortion.

But Mayor Lori Lightfoot says that during that time, plenty of damage was done – at a cost to taxpayers.

“When you have no structure and you have no oversight, you’re not using best practices, you’re not managing claims on an electronic basis, of course those kinds of situations are absolutely going to develop,” Lightfoot said. “The system that Ed Burke ran was ripe for corruption.”

It’s not just the mayor’s opinion.

Lightfoot on Thursday made public an audit conducted by the Grant Thornton firm. It found the city’s setup to be antiquated. Workers administering the program didn’t have proper training. There aren’t clear policies to handle claims.

Critics of Burke say it goes beyond simple mismanagement.

One city worker with an outstanding workers’ compensation claim, plumber Patrick McDonough, said that Burke used the system to punish whistleblowers like himself, and to reward political cronies.

Investigating whether there’s any truth to such claims, or suggestions of potential criminal wrongdoing, was not within the audit’s scope. Hundreds of cases are still unresolved, years after initial claims were made.

“I don’t think we know that yet,” Lightfoot said. “But certainly as we look back at legacy claims we’re going to be on the lookout for any kind of fraud or abuse of the program. But it’s a concern. Obviously when you have a program of this magnitude that’s operated in the dark, with no transparency for years, there’s absolutely a concern that decisions are being made on something other than a merit basis.”

Burke did not a return a call to his ward office seeking comment.

Lightfoot also announced Thursday she’s hiring a private company, Gallagher Bassett, to run the program’s day-to-day operations. She says the firm was chosen in a competitive process, but the contract is still being finalized so she didn’t share how much Chicago will pay.

The City Council will maintain oversight.

By professionalizing and modernizing the program responsible for paying claims to city workers, verified to have been injured on the job, Lightfoot says Chicagoans can expect to realize “substantial” savings in the long run.

Lightfoot says cleaning up workers’ comp is part of her plan to clean up City Hall.

She’ll need to prove to residents she’s doing that, given that – as she reiterated Wednesday after her second City Council meeting – she’ll be planning to come to them, in some capacity, to pay more for government services.

“I meant what I said on the course of the campaign. We have a lot of hard choices we’re going to have to make with regard to city finances and there’s no question that we’re going to have to come to the taxpayers and ask for additional revenue,” Lightfoot said.

Chicago to hire outside firm to operate workers comp program Thanks To Mayor Lori Lightfoot


In another move to reform how the city conducts its business, Mayor Lori Lightfoot says Chicago will transfer day-to-day control of its $100 million-per-year workers’ compensation program to a private company.

The program for decades was handled in secret under the control of now-indicted Alderman Edward Burke. The long-time alderman was charged in January with attempted extortion for allegedly trying to shake down restaurateurs.

Lightfoot said Thursday a recent audit of the program by accounting firm Grant Thornton found there were nearly 1,300 open workers’ compensation claims.

Lightfoot noted other cities long ago reformed and professionalized their own programs. She said Chicago continued to operate in an opaque and antiquated manner that even members of the City Council didn’t know how the program worked.

Lightfoot implementing reforms to workers’ compensation program, blames Burke for problems

By Craig WallUpdated an hour agoCHICAGO (WLS) — Mayor Lori Lightfoot announced a series of changes to the city’s workers’ compensation program after an independent audit exposed widespread issues.

“The system that Ed Burke ran was ripe for corruption,” Lightfoot said.

Burke controlled the workers’ compensation fund as the 30-year chair of the Finance Committee. Grant Thornton LLP audited the workers’ compensation program after Burke’s office was raided by the FBI and he was stripped of his powers.

“There were no controls in place according to Grant Thornton to prevent fraud, waste and abuse,” Lightfoot said.

According to a whistleblower who sued the city last year over Burke’s handling of the program, there were two sets of rules.

“The rules are: If you’re clouted, you’re injured, you get taken care of,” said Patrick McDonough a city Water Department employee currently on disability due to a workers’ compensation accident. “If you’re someone who’s not clouted or a whistleblower such as myself, your checks wouldn’t come in on time, they’d look for any excuse to stop your benefits.”

The report revealed there were more than 1,300 open cases, more than 600 of which are more than a decade old.

“During this time, Chicago taxpayers paid nearly $300 million on these open claims,” Lightfoot said.

The mayor announced a series of reforms including the use of best practices to handle claims, adopting new technology to expedite claims and control medical costs, implementing a comprehensive “return-to-work” program and creating a process to handle legacy claims.

McDonough discovered through a series of Freedom of Information Act requests that many of the people running the program for Burke were not qualified.

“The people Edward Burke was hiring at the Committee on Finance were dog walkers, were hair dressers were people who had no background in workers’ comp whatsoever,” McDonough said.

As part of the effort to reform workers’ comp, the city has hired an outside firm to help introduce new controls and procedures to make the system more accountable.

Lightfoot could not say how much the changes will save the city, but she says going forward it will operate with transparency and oversight by the City Council and the Inspector General’s office.

City Audit: Workers’ Comp Program Had ‘No Formalized Governance Or Oversight Structure

CHICAGO (CBS) — A new audit is providing the first glimpse at how Chicago Ald. Ed Burke (14th) ran the city’s workers’ comp program, which operated for years with no monitoring or oversight.

CBS 2 political reporter Derrick Blakley has the story from City Hall with problems uncovered by the audit.

Chicago Mayor Lori Lightfoot said the city’s workers’ comp program is in such disarray, she’s bringing in a private company, Gallagher Bassett, to operate and reform the program.

As Finance Committe Chairman, Ald. Ed Burke ran the workers’ comp program as his personal fiefdom.

So secretive, even many city council members didn’t know how the program worked.

Mayor Lightfoot’s audit, performed by Grant Thornton Consultants, discovered large scale mismanagement.

“Just as of March 31 of this year, the program had approximately 1,300 open claims, many of which dated back several decades,” Lightfoot said. “Which means we were paying people, taxpayer dollars, without resolving their claims.”

Those 1,300 claims have cost the city almost 300 million dollars. And 600 of those claims are more than a decade old.

“It’s a pretty damning indictment of how this program was administered,” Lightfoot said. “I think there’s virtually no point on which Grant Thornton believed this program was operating anything close to best practices.”

Before Burke’s Finance Committee offices were raided by the FBI last year, his personnel empire included 33 positions just to manage workers’ comp.

Yet the audit said “the program had no formalized governance or oversight structure, which contributed to an overall lack…of controls to prevent fraud, waste and abuse.”

Burke successfully resisted attempts by Inspector General Joe Ferguson to review the program.

“The system that Ed Burke ran was ripe for corruption and we’re going to find and learn more about that as we dig into the details of these old legacy claims,” Lightfoot said.

And a government watchdog group said the change should be a win for tax payers.

“I think literally tens of millions of dollars should be a goal within the first year of the program,” said Laurence Msall of the Civic Federation. “Because there is clear inefficiency.”

The workers’ comp program currently spends around 100 million dollars a year.  But under Burke, the program had no fraud tip hotline and no policies to ensure reliable investigations.

Mayor Lightfoot said the audit wasn’t designed to find criminal violations, but the city will be looking for patterns of fraud as it reviews past claims.

An outside firm will administer $100-million-a-year workers’ comp program that Burke ran without oversight

Mayor Lori Lightfoot at a City Hall news conference Thursday, where she announced an outside firm has been hired to run the $100 million-a-year workers’ compensation program that for decades was controlled by now-indicted Ald. Edward Burke (14th). Joining her were chief financial officer Jennie Huang Bennett (left) and Comptroller Erin Keane.

For decades, the program was run by now-indicted Ald. Edward Burke (14th); as of March 31, it had roughly 1,300 “open” claims that have cost the city $294.5 million and counting.

Mayor Lori Lightfoot on Thursday began the serious cost-cutting needed to make the case for a painful, post-election tax increase — by hiring a professional outside claims administrator to ride herd over a $100 million-a-year workers compensation program so loosely run, it was “ripe for corruption.”

Gallagher Bassett, which Lightfoot described as an internationally known firm chosen after competitive bidding, will administer a program that, as of March 31, had roughly 1,300 “open” claims that have cost the city $294.5 million and counting.

More than 600 of those open claims are at least a decade old.

It all happened under the not-so-watchful eye of indicted Ald. Edward Burke (14th).

“A system of this size and significance has no business being controlled by a single member of the City Council — not to mention controlled without meaningful oversight, controls or transparency,” Lightfoot told a City Hall news conference, promising oversight by Inspector General Joe Ferguson and the City Council.

“The system that Ed Burke ran was ripe for corruption. We’re gonna learn more about that as we dig into the details of these old legacy claims. But what we’re trying to do now is establish a bright line that Chicago is actually gonna come into the modern age that is consistent with best practices across the country.”

“The system that Ed Burke ran was ripe for corruption.”

Lightfoot said the city should have tried to settle those open claims and bring employees back to work or terminate their employment.

Instead, the city continued to shell out disability checks to employees who, in some cases, were well enough to hold other jobs.

“While other cities across the country have long ago reformed and professionalized their own programs, here in Chicago, we continued to operate in such an opaque and antiquated manner that even members of our own City Council didn’t know how the program worked. That all ends now,” the mayor said.

For decades, the program that compensates city workers injured or disabled on the job was Burke’s exclusive purview.

The now-indicted alderman even hired private law firms at taxpayers’ expense to fight Ferguson’s efforts to examine the system.

Former Mayor Rahm Emanuel tinkered at the margins to achieve savings, but kept the program in the Burke-chaired City Council Finance Committee — and walled off from scrutiny — until Jan. 3.

That’s when Burke was charged with attempted extortion and forced to relinquish the Finance Committee chairmanship that had been his primary power base for decades. Only then did Emanuel shift control of workers comp from the Finance Committee to the city’s Department of Finance and order an outside audit of the program.

That audit, released last month, concluded there was little if any effort to “detect potential fraud, waste and abuse.”

There was no hotline for people to report city workers who may be illegally receiving disability payments. Auditors suggested Lightfoot consider turning the program over to an outside company to evaluate injury claims, process medical bills and hire law firms to defend the city.

In analyzing 2017 and 2018, auditors found “25 percent of all payments to medical providers were billed to providers outside” Illinois, many in Arizona.

In 2006, a Sun-Times investigation exposed such abuses as allowing patronage workers to file for injury claims at a higher rate than any occupation tracked by the Labor Department — including the most dangerous ones — and paying workers’ comp benefits to people who held outside jobs.

The highest rates of injury coincided with the names of people who had the most clout.

Three years earlier, the Sun-Times ran a series of similar stories, including one about the city forking over $136,036 to a Streets and Sanitation worker who beat up his daughter’s boyfriend while out on disability for an injured hand.

In 2016, whistleblowers again called the workers’ comp program a cesspool of patronage and favoritism. Still, Burke persuaded his City Council colleagues to block Ferguson from auditing the program.

In a lawsuit filed last summer, the maverick son of former Ald. Bernard Stone (50th) accused Burke of exploiting the workers’ comp program to award jobs to precinct workers who deliver votes for his hand-picked candidates. Stone also accused Burke of cutting disability checks as favors to political pals, such as to a precinct captain of a fellow alderman.

On Thursday, Lightfoot said she won’t know whether to seek reimbursement for fraudulent claims until Gallagher Bassett digs in.

But, over time, she’s convinced the outside administrator will achieve “significant” savings by eliminating decisions based on clout and by implementing a rigorous back-to-work program for injured employees. Emanuel promised such a program, but never delivered

“When you have a program of this magnitude that’s operating completely in the dark with no transparency for years, there is absolutely a concern that decisions are being made on something other than a merit basis,” she said.

Ralph Chiczewski Pension Prince needs Lori Lightfoot’s boot in his rear end NOW.

Ralph Chiczewski CPD and Chicago Water Cop Goon

The ongoing fraud schemes involving Alderman Ed Burke has ripped the Department of Water Management to pieces. Some employees call working at the Department of Water Management, “the walking dead”. “It is hard to get anything done when Lori is wise to the shit”, said a DOWM commissioner.

Mayor Lori Lightfoot stated as part of the recent Burke indictment she is going to request an investigation into various department heads related to reputed ethical conflicts. Also, Mayor Lori Lightfoot promised whistleblower protections that were nothing but fantasy in the past.

The DOWM has in the past stated the Jardine Plant with all the contracts and consultants are sacred ground. Ralph “the Chameleon” Chiczewski stated to Cook County Judges the going on at the Jardine Plant is part of national security. Ralph contended the secret click of political hacks, former alderman, and other unemployable should be safely protected from prying eyes. A second look at this lawsuit is in route.

Most people in Chicago media including powerhouses like CBS 2 have made FOIA request and they are delayed and denied. The thought here being delays benefit the insiders. In fact the DOWM Personnel Department was brought back to the Jardine Plant to keep information tucked inside.

Many years ago, Ralph Chiczewski the Security Boss retired from the Chicago Police Department with a massive pension of over $130,000.00 and then took a job at the DOWM for an additional $105,000.00 plus massive benefits and additional pension. Ralph also made quite a splash when we found out all the members of his family with sweet jobs and pensions. One Jardine Plant employee said, “Ralph is the enforcer, he keeps everything on the down low”. Ralph shows up at the Jardine Plant mid-afternoon and has the best job in town, said another source. Ralph does not even pay attention to his own memo. On November 22, 2011, Ralph ordered: “It is the Water Department Policy to prosecute all offenders whether the crime is a felony or misdemeanor”.

What does Ralph do you ask? Not long-ago Ralph made a memo demanding the closing of the Olive Park on the Jardine Plant. Underneath the Jardine plant is vessels containing billions of gallons of water prepared for human consumption. Also, enough hazardous chemicals to poison the entire City of Chicago and many of the suburbs. Ralph was hired by another winner and former cop, Bill “Butch” Bresnahan, and Former Commission Barrett “Hansen-Burke” Murphy.

In August 2016, the Chicago Air Show caused the Olive Park to have the gates shut to avoid any possibility of contamination to the Public Water Supply. This Park was hands off. Despite memos that state DOWM exerts no control over the CPD, Ralph Chiczewski ordered the gate opened at the Air and Water Show for a massive private wedding and photo shoot. Against his own orders, “Mr. Safety” to keep his job and provide favors for the Clouted, allowed the lives of millions to be at risk. Also, Ralph a former cop ordered to put away his police badge away, allowed the partiers to park at the Jardine plant with no special background checks. Everyone else had to pay to park at Daley’s private friends parking garages and at the Navy Pier. The other peons that went to the Air and Water Show paid dearly. Sad.

Just recently, a gentleman with disabilities George Lewis and part of a state program to put people to work, stocked machines at the Jardine Plant. Allegedly, George snuck in his lady friend to help instead of his wife. George used his wife’s swipe I.D. for his lady friend. George’s old lady found out and went past the Jardine Plant CPD sworn to protect us, and there was a massive brawl started in front of the Commissioner’s Office. Julie Hernandez-Tomlin allegedly ordered a cover-up. This was a massive violation and security breach that should have resulted in arrests. According to witnesses on the scene, the clout heavy contractor in charge of the contract, told Commissioner another employee would be sent instead. Despite all the “No Trespassing “ signs and warning to arrest, and “all trespassers will be arrested by CPD and prosecuted to the fullest extent of the law”, nothing was done. Another cover-up caper by ole Ralph?

We are currently running an investigation into Ralph’s use of his undercover car to attend to personal business, drink at parties, attend political events, and run interference for the Commissioner in crime rackets involving Alderman Burke and dirty Chicago Alderman. Time for this goon to hit the road. Time to demand a return of his pension loot. Enough is enough.