County Paid Insurance Agency Without Formal Contract

Jan. 13--WILKES-BARRE -- Luzerne County paid a Dunmore company $48,000 in 2009 to administer the county workers' compensation fund, but the county has not executed a contract with Excalibur Insurance, officials disclosed Tuesday.

County Manager/Chief Clerk Doug Pape said DGK Insurance Services recently discovered the oversight. The county hired DGK of Factoryville last fall to provide advice on insurance and risk-management purchases.

"We wanted an impartial insurance professional to see what we are doing," Pape said.

Excalibur owner Charles Volpe is a contributor to county political campaigns and a friend of former Commissioner Greg Skrepenak. County commissioners approved a three-year deal with Excalibur in December 2008.

But county Solicitor Vito DeLuca said he reviewed a draft contract with Excalibur for the first time last week. DeLuca said he recommended some revisions and said a final contract is still being negotiated.

Pape said former Director of Human Resources Doug Richards was in charge of overseeing the workers' compensation program and should have made sure a contract with Excalibur was signed and executed.

"There never was an agreement put together," Pape said. "It should have come out of human resources."

Richards was fired in November and pleaded guilty Jan. 6 to accepting a bribe of at least $1,000 from a New York City firm that provided the county with payroll services.

Walter L. Griffith Jr., the county controller since Jan. 4, said the controller's office should have rejected requests to pay Excalibur last year because a signed contract was never sent to the office. Since January 2009, the county has paid Excalibur $4,000 a month to administer the workers' compensation fund, Griffith said.

The fund pays medical expenses for county workers injured on the job and provides wage-loss compensation until injured workers are healthy enough to go back to work. Excalibur has administered the fund for many years, and the county advertised a request for proposals to choose the fund's administrator in 2008, Pape said.

Commissioners agreed to pay DGK $30,000 for a deal that expires at the end of the year, Pape said. DGK has helped the county reduce insurance costs this year by $103,000, Pape said.

Last year, Volpe contributed $1,000 to the campaign committee of Luzerne County Commissioner Chairwoman Maryanne Petrilla. In 2007, Volpe contributed $8,000 to the campaign committee of Petrilla and Skrepenak.

Petrilla and Skrepenak ended their political partnership in 2008. Petrilla said Volpe's contributions didn't influence her decisions, and she noted that an insurance carrier tied to Volpe lost business with the county in 2008.

"We bid out the insurance, and they lost contracts for insurance," Petrilla said.

Skrepenak in 2008 admitted he had stayed at Volpe's beach house in Maryland for free. Back then, Skrepenak denied giving his friend preferential treatment and claimed contracts and purchases all resulted from competitive purchasing policies.

Skrepenak is scheduled to enter a guilty plea Jan. 26 to accepting $5,000 from an unnamed developer who was granted a county-backed loan.

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