Mar 14, 2008 - 00:07:01 CDT
Thud, clunk, thump.Those were the sounds of the other shoes dropping, the fallout many saw coming after a well-publicized review of North Dakota's worker's compensation agency.
The agency on Wednesday fired three of its top executives, shaking things up as recommended in a third-party analysis released last week.
Newly unemployed are Kay Grinsteinner, Jim Long and Billi Peltz.
Among other findings, the Conolly &Associates report called for the restructuring of management at Workforce Safety and Insurance. The agency has followed through, terminating three employees who had previously filed for "whistleblower" status, fearing they'd be fired for speaking up about perceived problems at WSI.
Grinsteinner was internal audit manager. Long and Peltz worked in the human resources department.
They were let go in three separate and quick actions Wednesday, though the possibility of their dismissal had been the subject of community discussion for quite a while.
The issue goes back several months, to when Grinsteinner claimed to have found information damning to WSI. She said there was evidence the agency might have inappropriately denied claims to injured workers. She also claimed to have obtained a journal belonging to WSIcommunications executive Mark Armstrong, in which there was an indication Armstrong was leaking agency information to the press via a third party.
Long and Peltz said they cooperated with law enforcement during an investigation into the alleged wrongdoing. Because of that, they said, they feared for their jobs and filed for whistleblower protection under the state's Public Employees Relations Act. A fourth whistleblower, WSI fraud investigator Todd Flanagan, was fired in December.
But the third-party audit, called for by Gov. John Hoeven, found no basis for Grinsteinner's claims.
Rather, it said she had a "profound misunderstanding of her role" as internal auditor, "and a disturbing sense of self-importance and lack of judgment." The review also said HR leadership had to be strengthened and trust in the department restored.
Acting on the report, WSI's Audit Committee met Wednesday morning and voted 4-0 to fire Grinsteinner. The termination, which came with no severance package, was effective immediately. Right after the meeting, Peltz and Long were notified by interim CEOJohn Halvorson that they were being fired as part of the agency's reorganization. Again, no severance.
In a statement from Armstrong, WSIsaid Long's job was being eliminated "to accomplish a flatter organizational structure." Long had been on paid leave since November.
In his termination notice, Halvorson told Long "the acting senior management team confirms there is no confidence in your ability to return to WSI and effectively lead."
Long had his own take on the proceedings, and said he would file a lawsuit challenging his dismissal.
"It's kind of D-day for whistleblowers," he said. "It was just a matter of time for them to conjure up enough gumption to actually pull the trigger. Very obviously to anyone who looks at this, is it's in retaliation for folks that were cooperating with law-enforcement officers."
Peltz said her termination was a farce.
"What happened today is clearly retaliation,"she said. "Three people were terminated due to the Conolly report, and all three happen to be whistleblowers? The Conolly report is a farce, and the executive team who are truly responsible for the issues at WSI are still employed. The issues at WSI will remain as long as the current executive staff and legal staff remain."
Grinsteinner referred questions to her attorney, Mike Geiermann. He said it was hard to believe that after spending more than $300,000 on the reviews, this is what transpired.
"It's beyond comprehension that after the state of North Dakota spends thousands of dollars to investigate WSIand its services to the injured workers, the four whistleblowers are the only people that get terminated,"Geiermann said. "It's clearly, in our opinion, retaliation for claiming whistleblower status and the actions that were taken by these people to report what they perceived as (problems) in the agency."
Long said the actions should serve as notice to other state employees.
"The message this sends to every state employee in North Dakota is, if something is going on in any agency that's illegal or unethical, they just better shut up about it because this is what happens," he said.
But the Audit Committee, in its termination of Grinsteinner, said the message was something else entirely.
"The internal audit manager position is extremely important at WSI," committee member Mark Jackson said. "If we're going to ensure the needs of injured workers are protected, we need someone who can perform the duties of internal audit manager as intended. The Conolly report makes it crystal clear that Ms. Grinsteinner is not doing that, and is incapable of doing it in the future. We need to find someone who can."
Board member Mark Gjovig, former chairman of the Audit Committee, agreed with Jackson.
"It was unfortunate that (Grinsteinner) put the staff, the board and even the entire state through this,"Gjovig said before the vote to terminate her. "It's a huge expense that never had to take place if these statements weren't made, if these actions hadn't been taken. I don't see any more way to work with her. I can't. The staff can't. I don't see any other way. Ihave a total lack of trust in her and no confidence in her ability to perform her job."
The only dissenting opinion at Wednesday's meeting belonged to WSIboard member Ed Grossbauer, who had no say in Grinsteinner's future because he wasn't on the Audit Committee. He agreed Grinsteinner shouldn't have rifled through Armstrong's desk, but said that doesn't negate the findings.
"They were painting with a broad brush, saying she was doing an ineffective job, when in fact they don't like what she's finding,"Grossbauer said. "The fact of the matter is, what she found (in Armstrong's journal, about information leaked to the media) was damaging not only to Mr. Armstrong, but also the organization.
"There's a big pitcher of Kool-Aid that was poured," Grossbauer said, "and I think I'm the only one not drinking it."
WSI officials hope to hire a new interim CEO - also based on a recommendation by Conolly - soon. Hoeven's pick would be former Fargo Mayor Bruce Furness. The Tribune tried to reach Hoeven, but was unsuccessful. Ryan Bernstein, Hoeven's attorney, said they didn't have a problem with WSIacting on the personnel matters before the new CEO was hired.
"It appears with all of these changes that WSI is moving forward to implement the recommendations from the outside consultant,"Bernstein said. "When the new CEO comes in, and we hope that's soon, that individual can move forward and get some people in there and they can all move forward together."
Brad Ballweber, chairman of the Audit Committee, said WSIwould advertise soon to replace Grinsteinner. Armstrong's statement said WSI would also immediately begin the search for Peltz's replacement. Long's position was eliminated.
Halvorson - who wrote Long's termination letter and gave Peltz the choice of resigning or being fired Wednesday - declined to comment, saying any information was in the statement sent by Armstrong.
For more on that, see the sidebar to this story, with the headline "WSI to reorganize."


NICE CALL wrote on Mar 18, 2008 8:41 PM:
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AND ANOTHER THING wrote on Mar 16, 2008 1:39 PM:
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DAZED & CONFUSED wrote on Mar 15, 2008 4:54 PM:
I would like to Thank these people for bringing this to the attention of North Dakota Citizens. I just hope we can do something about it...
Now all we have to do is wait for the "WSI Officials" to hire Their new YES Man!! OOPS, I better watch my mouth............... "
Why? wrote on Mar 14, 2008 10:08 PM:
Corruption wrote on Mar 14, 2008 3:50 PM:
Dakota wrote on Mar 14, 2008 3:34 PM:
Captain Crunch wrote on Mar 14, 2008 11:31 AM:
MamaMia wrote on Mar 14, 2008 8:51 AM:
All You Need To Know wrote on Mar 14, 2008 6:27 AM:
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Selective outrage wrote on Mar 14, 2008 3:39 AM:
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Leslie wrote on Mar 13, 2008 9:27 PM:
Kimberly wrote on Mar 13, 2008 8:57 PM:
Kimberly wrote on Mar 13, 2008 8:56 PM:
Happy wrote on Mar 13, 2008 5:47 PM:
It doesn't matter if the Republicans or the Democrats are in the Governor's office. Perhaps it's time to consider getting the whole mess out of the political arena and privatise the whole thing.
After all what we are actually talking about is disability coverage and it's probably best left to a company with disability experience.
Could even cost less? "
HATE TO INTERRUPT A COVER UP WITH THE TRUTH wrote on Mar 13, 2008 5:29 PM:
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INCREDIBLE wrote on Mar 13, 2008 5:19 PM:
To Corriane, will you please think before you speak? The whistleblowers had an agenda? No one has an agenda when compared to WSI board and management. Geez they get rid of 1/3 of the staff (Blunt and his cronies), they fought ever audit done (Board, Blunt, Keiser, Wald, Klein), they met secretly to get rid of the state's attorney (Blunt, Scates, Keiser, Armstrong), they met secretly to write bogus letters to the editor and have friends sign them (Keiser, Wald, Amstrong, MCGYVER, etc), they conspire to get any employees who speak up. Agenda's? Please.
To Brenda, conspiracy theorists? You have got to be kidding me. If everyone listened to Blunt and the board, the auditors office, DOT, highway patrol,attorney general, state's attorney, bureau of criminal investigations and of course Octagon were in some massive conspriacy to get them. All those parties were wrong, but Blunt and Indvik were right? No one on the planet but the kool-aid drinkers can really say there were conspiracy theories as they are the champs. "
Confused wrote on Mar 13, 2008 4:54 PM:
Stand Tall wrote on Mar 13, 2008 2:42 PM:
Stand Tall wrote on Mar 13, 2008 2:31 PM:
That pretty much sums up it up. Don't need to know much more than that. "
Good point - how does anyone know if they were telling or not telling the truth if the claims have never been investigated? As an ex-employee, I know some pretty interesting things. How can the latest audit make their determinations if an investigation has never been conducted. Did the latest audit solely place their trust in the legal staff to come up with their conclusions on Grinsteinner and the others?
Does anyone know if the investigations will ever take place? Just because the whisleblowers aren't there anymore, doesn't mean the investigation should not go forward. Mr. Editor please clarify who's in charge of this investigation process so the public can contact that office. It's really sad when general members of the public have to ensure accountability with these government agencies. It's really hard to keep a database of audits and investigations in the works at WSI because there are so many. Which reminds me, what happened to the ICF survey/audit done on the moral at WSI. What became of that? "
schputz wrote on Mar 13, 2008 2:26 PM:
GOD wrote on Mar 13, 2008 2:07 PM:
to Mike wrote on Mar 13, 2008 1:37 PM:
Green wrote on Mar 13, 2008 1:03 PM:
That pretty much sums up it up. Don't need to know much more than that. "
Right Decision wrote on Mar 13, 2008 12:56 PM:
Mike wrote on Mar 13, 2008 12:36 PM:
LJ wrote on Mar 13, 2008 12:22 PM:
Happy wrote on Mar 13, 2008 11:49 AM:
to Three not Five wrote on Mar 13, 2008 11:32 AM:
Brenda wrote on Mar 13, 2008 11:02 AM:
I am not a supporter of WSI or the management and have always felt that they incorrectly handled a lot of things and they could get away with it because there was ineffective oversight--or a lack thereof. I just took the whistleblowers - and WSI supporters - with a grain of salt because we had no third-party evidence. Now we do and it's clear to me that there were a lot of false accusations based off bad information and subjective interpretations of what was going on.
Besides, I'm a woman and have a little sister who is quite the drama queen, so I can sense when drama takes over, blurring facts and causing people to act on impulse rather than insight. I'm sorry, but I truly think a lot of this was dramatized causing a lot of otherwise avoidable damage within the agency. "
Scared wrote on Mar 13, 2008 10:55 AM:
Kimberly wrote on Mar 13, 2008 10:46 AM:
Spelling wrote on Mar 13, 2008 10:41 AM:
Three not Five wrote on Mar 13, 2008 10:26 AM:
Jason wrote on Mar 13, 2008 10:08 AM:
Cindy wrote on Mar 13, 2008 10:01 AM:
Who were the other two? "
Brenda wrote on Mar 13, 2008 9:51 AM:
I think the results of the reports should be taken seriously and with respect - even if they didn't turn out the way the conspiracy theorists wanted it to. In the end, it appears the drama was just that - a conspiracy theory. "
Five not Three wrote on Mar 13, 2008 9:03 AM:
Not Whistleblowers wrote on Mar 13, 2008 8:50 AM:
MamaMia wrote on Mar 13, 2008 8:34 AM:
The sad part wrote on Mar 13, 2008 8:09 AM:
Something else I want to know is this. WSI eliminated 2 other positions and those people are also out the door. Why then when Armstrongs executive position eliminated was he not shown the door? But instead they just moved him under the legal team. Which I think is an interesting move in and of itself. Armstrong probably doesn't even know the traffic laws, oh wait I don't think he does have you ever seen him drive that huge van. "
Corrianne wrote on Mar 13, 2008 8:05 AM:
Diggs wrote on Mar 13, 2008 8:03 AM:
Please - people of ND wake up and vote the Republicans in to non-existence. "
Everyday Guy wrote on Mar 13, 2008 7:01 AM:
no surprise wrote on Mar 13, 2008 6:34 AM:
leo wrote on Mar 13, 2008 6:30 AM:
WSI, in fact, has a real problem with corruption within its organization. Withholding benefits from deserving injured workers, the fraudulence of the safety grant program, and the special interests of the politicians are some of the examples that will eventually be uncovered.
What bothers me is the enthusiastic response by the board of directors to the Connolly report. They have never responded to any of the previous audits or reports, some they have ignored. It is evident the Connolly report is based on interviews with WSI brass over a short period of time. It is also evident by the attacks on certain WSI personnel that the Connolly report was hand fed the information. Anything that was considered negative towards management and the board was ignored.
The Internal Auditor position at WSI has a very tumultuous history. Management and the board historically do not like anyone to investigate and question their actions. All the past Internal Auditors have done their jobs only to be forced out of the agency because of their findings.
It would appear the only recourse to the insanity surrounding this state agency is through the citizens of North Dakota and their power to vote. It is quite evident that a major change in our political atmosphere is needed. The Governor lost severe credibility by his inaction to correct the WSI situation. He can no longer take it for granted he will be re-elected. He lost a lot of votes yesterday. "
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