N.D. Workers’ Comp Director Denies Involvement in Ohio Scandel

North Dakota’s workers compensation director said he was unaware a man he formerly supervised in Ohio was taking payoffs to steer state investment contracts to people he favored.

“I find it a disgrace anybody would even try to mention … that I brought some corruption here,” Charles “Sandy” Blunt told the board of directors of North Dakota’s Workforce Safety and Insurance agency.

Board members said they had recently gotten phone calls about the case of Terrence Gasper, the former chief financial officer of the Ohio Bureau of Workers Compensation, who pleaded guilty in June to a federal racketeering charge.

Gasper was accused of accepting a $25,000 bribe, $9,000 for his son’s college tuition, and use of an oceanfront condominium in the Florida Keys in exchange for giving workers compensation investment business to four people.

Ohio’s workers compensation fund is one of the nation’s largest, with $19 billion in assets. Gasper also pleaded guilty to state charges of money laundering and failing to report gifts.

Workers compensation insurance offers medical, wage and rehabilitation benefits to workers who are injured on the job.

Blunt was chief operations officer for the Ohio workers compensation agency before he accepted the North Dakota position in April 2004. He supervised Gasper on some insurance matters, but did not work with him on investment decisions, Blunt said Friday.

During a board meeting Thursday, Blunt said he felt compelled to talk about the situation, because of phone calls some board members had received about it.

“I have never in my life participated in corruption,” Blunt said. “I would never participate. I will not tolerate it. I would report my own mother for it.”

Blunt said Friday that a representative of the Ohio inspector general’s office once called him briefly about the matter. He said he had never been interviewed by law enforcement officials about it.

He has discussed the Ohio situation with North Dakota board members before, Blunt said. However, given the recent calls, “I felt it appropriate … to assure them of the facts and my noninvolvement,” Blunt said.

“It’s just kind of an innuendo. ‘Well, if he’s indicted, and he managed him for some period of time, maybe he’s bringing that same type of style here,”’ Blunt said Friday. “I wanted to stand up, I wanted to be available and I wanted them to be able to ask questions if they had concerns.”

Robert Indvik, chairman of the North Dakota Workforce Safety and Insurance board, said the inspector general had told him no law enforcement agency working on the Ohio case had an interest in anyone in North Dakota.

Arnie Schropp, a first assistant inspector general at the agency, declined to confirm Indvik’s statement Friday. The agency is leading an investigation into the investment practices of the Ohio workers compensation bureau, Schropp said in an e-mail.

“Due to the size and complexity of this ongoing investigation, we are unable at this time to comment on who members of the task force may have spoken to, or what may have been discussed,” Schropp wrote in his e-mail.

Gasper’s guilty pleas were only one element in a wide-ranging Ohio financial scandal that has shaken the workers compensation agency and the state’s Republican-dominated state government.

Gasper was forced out of his job in October 2004, after a high-risk hedge fund investment he had approved lost $215 million. The bureau’s top administrator, James Conrad, resigned in May 2005 after disclosures that the agency had invested millions in rare coins with Tom Noe, a top Republican fundraiser and donor.

Since then, the Ohio fund’s stock and bond managers have been replaced and their portfolios liquidated, and the bureau’s outside investment consultants have been replaced.