N.D. Workers’ Comp Director, Investigator Face Criminal Charges

April 20, 2007

North Dakota’s workers compensation director was put on leave Wednesday after criminal charges were filed against him and the agency’s top fraud investigator involving questionable spending on gifts and possibly illegal use of driver’s license photos.

Sandy Blunt, chief executive of the Workforce Safety and Insurance agency, is charged with misapplication of entrusted property and conspiracy to commit disclosure of confidential information, said Richard Riha, the Burleigh County state’s attorney.

Romi Leingang, 36, the head of the agency’s special investigations unit, faces a charge of conspiracy to disclose confidential information, Riha said Wednesday.

Blunt worked for the Ohio Bureau of Workers Compensation before starting his North Dakota job.

A man he formerly supervised in Ohio, Terrence Gasper, pleaded guilty last year to federal and state corruption charges as part of a scandal in the Ohio agency that shook former Gov. Bob Taft’s administration and was blamed in part for Republicans’ slide from statewide office last November. Blunt has denied any wrongdoing in the Ohio case.

The Workforce Safety and Insurance Agency Board voted later Wednesday to put Blunt on administrative leave with pay until the charges are settled. Blunt makes $166,719 per year.

Board member J.P. Wiest, of Jamestown, made the motion to put Blunt on leave, saying it frees the WSI board of liability while showing that the group still has faith in Blunt.

Board chairman Robert Indvik said that if the charges against Blunt are not dropped it will be a travesty.

“I believe he is totally innocent. I believe this is highly political,” Indvik said.

“There’s been some misinterpretation of what has happened here and misapplication of the law,” he said, calling the charges “a personal attack on a good and honest and righteous person.”

Blunt, 42, did not immediately respond to telephone messages left at his office and home on Wednesday. His attorney, Michael Hoffman, also did not return a message.

Leingang’s attorney, Tim Purdon, said she would plead not guilty.

“When the facts in this case come out, they will show she was following direct orders from her superiors,” Purdon said. He would not say if Blunt gave them.

The performance audit of Workforce Safety and Insurance last year found more than $18,000 in questionable spending on restaurant gift certificates and cards, and expenses for gifts from a shopping mall and lunch for state legislators.

Riha said state law did not authorize the expenditures. “Mr. Blunt approved spending of money outside what WSI is allowed to do by statute,” the prosecutor said.

He said Blunt also gave improper bonuses to some employees.

The conspiracy charge involves what auditors said was improper use of state driver’s license photos, which are confidential records under state law. WSI investigators used photos to try to track down an employee who was e-mailing agency salary information to the press and others. The salary information is public record.

Workforce Safety and Insurance provides medical, wage and rehabilitation benefits for employees who are injured on the job. Businesses are required to buy coverage, and get protection from injury-related worker lawsuits in exchange.

The state audit, published last November, said WSI often ignored state budget rules on purchase contracts, did not solicit competitive bids for some large purchases, and hired workers who did not meet minimum job qualifications. The audit also found employee morale problems.

It said that when an employee used a public library computer to anonymously e-mail information about WSI employees’ salaries, two agency fraud investigators went to the library with driver’s license photos to try to discover the person’s identity.

The audit said WSI obtained the photos illegally, and using agency investigators to snoop on an employee was an abuse of agency resources. Blunt and WSI disputed the findings, and the board rejected demands that Blunt resign.

WSI has a contract with the state Transportation Department to access its driver’s license photos for restricted purposes. Keith Magnusson, a department deputy director, said he believed WSI’s use of the photos was improper.

If convicted of all the charges against him, Blunt, who was hired in April 2004, would face a maximum sentence of 20 years in prison and $20,000 in fines. Leingang would face a maximum of five years in prison and a $5,000 fine.

Gov. John Hoeven, who has no direct authority over WSI, said before the board’s meeting that he thought Blunt and Leingang should be suspended until the matter is resolved, “and then the board will have to make a determination.”

The board appointed John Halvorson, the agency’s chief of employer services, as acting director.

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