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
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
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
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,”