Pinnacol Assurance To Agents: No Resignations Coming

CALL7 Investigators Obtain Internal Email

The CALL7 Investigators have obtained a copy of an internal Pinnacol Assurance email declaring that CEO Ken Ross and three board members, who went on the now-infamous Pebble Beach trip, will not resign.

Ross, Pinnacol board chairman Gary Johnson and board members Ryan Hettich and Debra Lovejoy have made no public comments regarding calls for their resignations.

This comes after CALL7 Investigator Tony Kovaleski found Ross and the board members on a golf junket to Pebble Beach that ultimately cost Pinnacol more than $318,000. The junket happened in May 2010, and at the time Pinnacol told 7NEWS it was an incentive trip for its top-selling agents.

The five-day trip included tens of thousands of dollars in dinners, winery tours, drinks, spa treatments and golf. In fact, alcoholic beverages accounted for more than $20,000 of the total.

The calls for them to step down have come from Colorado lawmakers and, in a written statement to 7NEWS, former Gov. Bill Ritter addressed the Pinnacol trip and said, "Colorado deserves better leadership."

But, resignations will not happen according to an internal email obtained by 7NEWS. The email was sent to Pinnacol's agents and included talking points and frequently asked questions like, "Some are calling for the board members who attended the event to resign. Will they?"

The one-word answer, "No."

The email continued, "Some are calling for Ken Ross to resign. Will he?"

Again, the answer, "No."

"None of this looks very good," said Jim O'Toole, University of Denver professor of business ethics. "This kind of behavior is incredibly outrageous."

O'Toole has experience working with and consulting for boards of both commercial businesses and nonprofit entities.

"Board members taking this kind of travel and entertainment, ethical or not ethical?" asked Kovaleski.

"From the point of view of an ethicist, I would think what they did does not pass the test of reasonable behavior or reasonable expense, particularly given that this is a quasi-public organization.

Pinnacol Assurance is defined by state statute as a "political subdivision of the state." It's the same definition used to describe entities such as the University of Colorado. As such, the firm pays no taxes and its employees are eligible to receive benefits from the Public Employees' Retirement Association of Colorado, or PERA.

The same statute also directs Pinnacol to operate as a "private mutual insurance company" and the insurer of "last resort" for businesses in Colorado.

Many of the questions about the Pebble Beach trip specifically concern the board of directors of Pinnacol, who are appointed by the governor to oversee the agency.

"What is implicit in all of this is there is some sort of back-scratching going on," said O'Toole.

"The highest example has to be set by the board because the board is responsible for ethical behavior of top management," said O'Toole. "At the very minimum they are hypocrites with this."

"Should the three board members resign?" asked Kovaleski.

"I think you would expect an honorable person in this situation to resign," answered O'Toole.

A spokesperson for Pinnacol Assurance verified the authenticity of the internal email obtained by 7NEWS, but as of this writing offered no further comment.