Measure 38

Argument in Favor


We've all seen the headlines. We've all heard the stories.

FBI Agent Looks at Documents Involving SAIF, Goldschmidt
The Oregonian, July 17, 2004

Judge Orders Workers' Comp Insurer
Not to Destroy Records

The Bulletin (Bend), June 4, 2004

State Police Probe Possible Destruction of Records
The World (Coos Bay), June 5, 2004

While some claim SAIF is an Oregon success story, the headlines – and the facts – paint a very different picture.

How can Oregonians put their faith in SAIF when the agency has placed more importance on serving itself than the businesses and injured workers it was created to protect?

Clearly SAIF has shown we cannot trust it to right its own wrongs.

It's time for Oregonians to take matters into their own hands and stop Oregon's growing scandal by enacting real insurance reform.

It's time for Oregon to pass Measure 38.

Oregonians for Accountability

(This information furnished by Lisa Gilliam, Oregonians for Accountability.)

Argument in Favor


As members of the Oregon House and Senate, we represent areas as different as eastern Oregon and the north Willamette Valley. One of us is a Republican and the other a Democrat. But we share an abiding interest in making sure Oregon's citizens get good information to make good decisions.

We have also served on your legislature's Ways and Means Committees and had the responsibility for making decisions about the state's budget. We are very familiar with the fiscal impact statements that estimate if and what a particular action will cost the state. They should be based on most likely scenarios and prepared by experts in that field. That did not happen with Measure 38.

The fiscal impact statement for Measure 38 wasn't produced by the offices that usually do this specific kind of work. It came from a committee that has no budget expertise.


If Measure 38 passes, SAIF can follow a path similar to those taken in Michigan and Nevada. The legislature's lawyers assure us there is no legal reason barring us from that approach. And, we would get two years to make that happen. With this real insurance reform, private companies will be able to provide great service to Oregon's businesses, but without SAIF's conflict of interest or unfair tax advantages.

By using this option, the $2.2 billion in one-time costs goes away. And, even the spokesperson against Measure 38 admitted, "…the one time expense of $2.2 billion or more would be covered by a SAIF trust fund and would not come from taxpayers' pockets." The Oregonian, August 5, 2004


With this real insurance reform, the State of Oregon, taxpayers and employers stand to actually make money. The state and taxpayers could gain $500 million or more – just like they did in Michigan and Nevada.

Make your decision, but make an informed one.

Senator Kurt Schrader
Representative Tom Butler

(This information furnished by Representative Tom Butler, Senator Kurt Schrader.)

Argument in Favor


I am the story SAIF doesn't want you to hear.

My name is Lorinda Gauthier and I am an injured Oregon worker.

I used to work for the Oregon Department of Transportation. I got up every morning, went to work and did my job. I never worried about what might happen if I was injured. I had every reason to believe SAIF would meet its obligations. Right? Wrong!

One day I was struck on the head by an 18 inch steel nozzle. I lost consciousness, was taken to the local fire department and transported to the hospital. I experienced sub-orbital nerve damage and now I have frequent extremely painful migraine headaches. To limit these attacks I need to work in a controlled environment. But, when I approached my boss at ODOT about this he said he didn't have a job for me and I was laid off. Meanwhile, SAIF closed my claim and I was left without a job and the two years of wages I should have earned.

SAIF did not stand by me. In fact, they walked over and past me. They never wasted a moment's thought about my injuries and my needs.

While I have been languishing in medical bills, lost wages and the ongoing effects of my injury, SAIF was out building its financial reserves and sending kick backs to the political and trade groups who help keep it in power.

I am by no means an expert on workers' comp insurance, but I am an expert on being an injured worker and the additional suffering that can come at the hands of SAIF.

I, and all the injured workers of Oregon, deserve better. That is why I am voting yes on Measure 38.

Lorinda Gauthier

(This information furnished by Lorinda Gauthier.)

Argument in Favor

Oregon at a crossroads.

I was state director for the National Federation of Independent Business for ten years, and I still believe in NFIB's core values. Our free enterprise system based upon private sector businesses competing against each other provides the best prices and services, while government-run monopolies harm our economy. Oregon is at a crossroads and this election we will make a vital decision about the future of our state. We can embrace the benefits of choice, or fall victim to a government monopoly in the making.

The best choice for Oregon's small businesses.

As an Oregon business owner, I've seen SAIF's tactics first hand. In 1990, SAIF threw my company and thousands of others into an Assigned Risk Pool where rates more than doubled. Fortunately, Liberty Northwest recognized my business was a good risk and fished me out of the pool. Today my company has grown to approximately 100 employees with over $7 million in annual sales. If it was up to SAIF, this story would have had a very different ending.

Some say they fear loss of coverage or higher rates. But when states like Michigan and Nevada enacted real insurance reform, choice increased and rates went down.

Our last chance for real insurance reform.

I was a chief petitioner to place Measure 38 on the ballot not because it was my first choice, but because it was our last chance to stop SAIF's drive to become a monopoly. Despite numerous attempts to level the playing field with SAIF, the legislature was unwilling or unable to act. Oregonians took matters into their own hands to create real insurance reform.

If we do not act now to stop SAIF and support competition and choice in Oregon, we will be left with no choice at all.

Join me - and the Oregon success stories that have yet to be written - and vote yes on Measure 38.

Jim Bernau
Turner, Oregon

(This information furnished by Jim Bernau.)

Argument in Favor

Who is Oregon Citizens for a Sound Economy (CSE) PAC?

Oregon CSE PAC represents tens of thousands of Oregonians, dedicated to the principles of lower taxes, less government, and more freedom. We believe that the only way to see our issue agenda enacted is through the commitment of our volunteers and supporters who are mobilized and ready to show up and demand policy change 7 days a week and 365 days a year.

You may remember us from earlier this year, when our activists successfully led the fight to repeal the largest tax increase in Oregon's history. But, what do we have to do with SAIF?

Why does Oregon Citizens for a Sound Economy (CSE) PAC support Measure 38?

SAIF is a giant government-run monopoly in the making that is defying Oregon taxpayers, destroying the private market, and ignoring the mission it was originally created to serve. Instead of helping small businesses obtain workers' compensation insurance, it has used government funds to actively seek out low risk, highly profitable opportunities for itself. And, while SAIF has continued to rake in the profits, Oregon taxpayers have been told time and time again the state just can't survive without taking more of our hard earned tax dollars.

Measure 38 will end SAIF's unfair domination of the marketplace and stop the fleecing of Oregon taxpayers.

Join Oregon Citizens for a Sound Economy (CSE) PAC in voting YES on M 38!

We must get the state out of the business of selling insurance and interfering in the marketplace.

We must take back the excess profits SAIF has refused to share and make a stand for smaller government and private enterprise here in Oregon.

Please join Oregon Citizens for a Sound Economy (CSE) PAC in voting yes on Measure 38!

Russ Walker
Oregon Director, Oregon Citizens for a Sound Economy (CSE) PAC

(This information furnished by Russ Walker, Oregon Citizens for a Sound Economy PAC.)

Argument in Favor


This election we can do something positive for our state and the people of Oregon.

We can create a long overdue rainy day fund to avoid future tax increases or cuts to vital services like jails or schools.

We can get the state out of the workers' compensation insurance business and help fund top priorities like law enforcement.

Oregon needs a rainy day fund. When state funds drop, local law enforcement officials are left scrambling to patch together insufficient funding for courts, prosecutors and officers.

Our state should be worried about our safety, not running an insurance company. We don't need a SAIF monopoly. We need more money for law enforcement and other critical services.

SAIF has hundreds of millions of dollars in excess profits while mental health services degrade, criminals are not held accountable, and our overall quality of life deteriorates.

SAIF no longer serves the public interest.

We once needed a state fund. Employers were required to provide workers' comp insurance, but the private sector couldn't cover all businesses. SAIF was created to be the insurer of last resort, so all businesses could have coverage.

That has changed. The private sector is now well positioned to handle the job, handle it better, and SAIF no longer serves as the insurer of last resort.

SAIF has abandoned its mission and shot down all efforts at reform.

As a law enforcement officer, I am alarmed by the number and depth of the SAIF scandals. SAIF has lost a great deal of the credibility it once had.

Measure 38 is a positive step for Oregon. It's a win for taxpayers, for our competitive market system and for good government.

It is time for real insurance reform.

It's time to pass Measure 38.

Sheriff Jan Clements
Lane County

(This information furnished by Sheriff Jan Clements, Lane County.)

Argument in Favor


Oregon's economic recovery requires a healthy, competitive workers' compensation system.

The first step in California's turnaround in the early 1990s was workers' comp reform. As an economist, I believe Oregon's system is heading in the wrong direction. Measure 38 will get us back on track.

Competition is the most powerful economic force in the history of the world. Monopolies or quasi-monopolies are not in the public interest, regardless of their stated intent. SAIF is emerging as a virtual monopoly, which makes Oregon unattractive to corporate investment and impedes our economic success.

SAIF has strayed from its mission, and has resisted all attempts at reform. It no longer serves the public's best interest.

SAIF refuses to cover certain small and start-up businesses – the very businesses that will fuel Oregon's economic recovery, that SAIF once covered.

After the Legislature made SAIF a public corporation, SAIF dropped coverage for some 10,000 businesses, forcing them into the more expensive assigned risk pool. Nearly 12,000 businesses remain in the pool, paying higher rates that prevent them from hiring as many workers as they should.

The solution is obvious: harness the powerful competition and permit private insurers to serve the market that SAIF has rejected. But the market cannot perform as intended as long as SAIF abuses its status as a public agency to squelch competitors.

Today Oregon has the worst of both worlds: Taxpayers are subsidizing a quasi-monopolist that acts like a private insurer when it's expedient to, but fails to fulfill its public mission.

Experience in other states demonstrates that rates go down when the state fund is made private, and real competition occurs.

Oregon will benefit if Measure 38 is approved.

It's basic economics: Competition will lower workers' comp insurance rates, which will improve our ability to create and grow businesses and jobs.

Philip J. Romero, Ph.D.
Former Chief Economist, State of California
Former Dean, University of Oregon College of Business

(This information furnished by Philip J. Romero, Ph.D., Former Chief Economist, State of California, Former Dean, University of Oregon College of Business.)

Argument in Favor

Long term stability in Workers Compensation Rates

The driving forces behind low workers compensation rates are legislative actions, court decisions, market conditions and group performance. Competition between providers should determine what small business pays.

SAIF's business practices intimidate private competitors, causing private company competition to decrease. We have seen a decreasing amount of private insurers in Oregon's market over the past 6-8 years. SAIF's large reserve fund and tax-free advantage is ultimately eliminating competition altogether.

The lack of private competition indicates that the system is broken. Competition is the proven way to control costs as the driving force behind low rates and by eliminating competition; the guarantee of low rates is gone. SAIF has become a dictator in the insurance industry. Even if SAIF increased their premiums—which would theoretically encourage new private competitors to emerge, SAIF's large reserve fund looms as too large of a threat for private insurers.

A study commissioned by ORA in 2001 illustrates the result of this threat. "The analysis undertaken for this report shows that SAIF is engaged in a number of business practices that place SAIF in an extremely high ranking relative to other insurers. The nature of these practices is such that they inherently pose a genuine risk of limiting or even reversing progress in attracting and retaining private insurer activity in Oregon's workers compensation market" (Philip R. O'Conner, Ph.D., Eugene P. Esposito, J.D. (200). The Oregon Worker's Compensation Market: Analysis & Prognosis. Chicago, IL: Proactive Strategies, Inc.)

The Oregon Restaurant Association believes that independent businesses live on market conditions, not subsidies. Measure 38 will not impact the increase or decrease of rates. Measure 38 will open the market place and allow more companies to compete for workers compensation. As a business organization we support more competition, and that is what will keep rates down and benefit the consumer.

Vote YES on Measure 38

(This information furnished by Bill Perry, Oregon Restaurant Association.)

Argument in Favor

As a representative of Accident Fund Insurance Company of America, I am not recommending how the people of Oregon should vote on the privatization of their state's workers compensation system. I am simply sharing the experiences Michigan and Accident Fund have encountered since our privatization.

Accident Fund was purchased for $262 million in December of 1994. Historically, from 1912 until the year we were privatized, Accident Fund never exceeded 17 percent in market share. There are presently more than 250 insurers writing workers compensation policies in Michigan. Over the past five years Accident Fund has continued efforts to maintain our customer base and expand the services provided to policyholders in the state of Michigan - as well as the other states in which we now do business. We currently have a 27 percent market share in Michigan and are now one of the top 20 workers compensation insurers nationally. Four years ago we weren't in the top 50.

Since privatization, our rates have decreased approximately 35 percent overall. Even with the market increases subsequent to 2000, Accident Fund's rates continue to be below the market average.

Accident Fund, which was the workers compensation insurer of "second-to-last resort" prior to privatization, continues to write policies for small business with $50,000 or less in annual premium. Our average policy size is only $10,000. Net premiums written by Accident Fund climbed from $203 million in 2000 to $441.6 million last year. Net premiums are projected to hit nearly $500 million this year.

Customer survey scores have been consistently higher than those received pre-privatization.

The State of Michigan produces annual State of the Competition studies, and they continue to report good competition in the marketplace.

Michigan enjoys a healthy workers compensation environment, and there looks to be no change in that regard on the horizon.

Mark R. Hogle
Executive Vice President and Chief Operating Officer
Accident Fund Insurance Company of America

(This information furnished by Mark R. Hogle, Executive Vice President and Chief Operating Officer, Accident Fund Insurance Company of America.)

Argument in Favor


The State Accident Insurance Fund has been planning a takeover of Oregon's workers' compensation insurance market since 1987. That's when former Governor Neil Goldschmidt received a telling memo from former SAIF Director Stan Long. He recommended to Goldschmidt, "You 'hold your nose' while the major private competition for SAIF, Liberty Mutual, goes insolvent."

Department of Commerce Memo from Stanton F. Long to Governor Neil Goldschmidt, February 24, 1987

The intention was obvious and the path was chosen.
SAIF wanted to become Oregon's government-run monopoly.


SAIF wants you to think it is the only thing standing between our state and skyrocketing workers' compensation insurance rates. Its defenders warn that Oregon could end up like Washington if anything happens to SAIF.

What they don't tell you is that Washington has a government-run workers' compensation monopoly. And, SAIF wants to be just like them.

Washington is a sign of where our state is headed
if we do not enact real insurance reform in Oregon.


Under Washington's government-run monopoly, rates have skyrocketed and employers are complaining about lack of choice and poor service. A recent study of the state's system found:

Reforming Washington's Workers' Compensation System Policy Brief by Washington Policy Center, Seattle, May 2004.

Washington's government-run monopoly has wreaked economic havoc in that state. There's no reason to believe a SAIF monopoly in Oregon would be any different.

We can learn from Washington's mistake
and stop SAIF from becoming a monopoly in Oregon.

(This information furnished by Jeff Stone.)

Argument in Favor

A former SAIF customer.

I was a SAIF customer for several years. The claims handling was a nightmare because of high turnover in the claims examiner ranks. I left SAIF.

Government Run Monopoly

I am a believer in privatizing as many government functions as possible. There is no need for the State of Oregon to be in the insurance business. The Nevada change from a government owned workers' comp system to a competitive market resulted in the now over 100 insurance companies competing for that business. SAIF has run off most workers compensation insurers. Once SAIF is sold, the market will be flooded with new insurers. This is because SAIF has used investment income on its huge reserves to pay dividends (selectively) to some their customers.


The payment of huge sums to lobbyists and expensive public advertising campaigns are not the wisest use of SAIF's money. The resignation of CEO Kathy Keene, the destruction of documents, and allegedly an FBI investigation into SAIF's activities reminds me of the old saying, "Where there's smoke there's fire."

Speaking of Reserves

Under Ballot Measure 38, the dollars generated to the state would create four reserve funds, one of which would guarantee funding of K-12 education during down economies.

The people must act.

Several business people, including me, tried during the legislative session to get the state out of the insurance business. The barrage of high dollar lobbyists paralyzed the legislature. We, the people, must act.

I strongly urge a yes vote on Ballot Measure 38.

Gary Coe

(This information furnished by Gary Coe, Speed's Supertow.)

Argument in Favor


If you work in Oregon, you should care about Measure 38.

Workers' compensation is one of those things no one pays attention to until you need it.

I needed workers' comp protection in May of 2002 when I was injured in a fall while repairing my heavy equipment. Instead of helping me recover and get back to work, SAIF has done nothing but dodge its responsibilities, delay in responding to my needs and deny its obligations.

My experience shows that SAIF will stop at nothing to drive workers like me into poverty to try to force an unfair settlement. I've been forced into bankruptcy. I've lost almost everything I own. This affects not only me but my wife and my children.

At a critical stage in my medical care, SAIF fired my doctor because she was unwavering in her medical opinion and unwilling to give in to their threats. SAIF refused to pay for antibiotics after surgery (agreeing to pay only for pain medication). Still my medical needs have not been met. I am totally disabled.

SAIF still has not paid my doctor or hospital for my most recent surgery in April.

SAIF has been a nightmare for me, and stories like mine are far too common.

SAIF may be good for some of its big business customers, but it's bad for the rest of us. It's more interested in making money than paying injured workers their rightful benefits.

The only way to achieve real workers' compensation insurance reform in Oregon is to pass Measure 38.

Rocky Gordon
Cottage Grove, Oregon

(This information furnished by Rocky Gordon.)

Argument in Favor

It's the eternal last straw at which any defendant can grasp. If you cannot dispute the message, then attack the messenger.

Rather than admit its own wrongdoing, SAIF has lashed out at anyone who tries to hold it accountable. All the while it has continued to foster the systemic corruption within its own organization, eventually spreading it to other parts of state government.

SAIF's built quite a list of victims – and did nothing to help them. Left with only the courts, this group banded together, thinking the safety and strength of numbers may help them get the justice they deserve.

They aren't seeking special favors. They aren't looking to get rich. If by some chance they win, 50% of that money will be set aside for future claims. SAIF may not take care of Oregon's injured workers, but hopefully the courts will.

Should a firefighter sacrifice his salary after he saves a house?

Should a doctor tear up his bill after he saves a life?

Of course not!

Then why should the attorney in the suit against SAIF reject the pay he would finally receive if this case is successful? The Oregon Attorney General says it's okay. Oregon state law says it's right. The only one complaining is SAIF. Could it be because SAIF's the one under investigation?

Remember the row of men in dark suits sitting in front of Congress saying nicotine is not addictive? You know, the good old boys from the tobacco industry. Do you think the attorneys who represented cancer victims should have been punished? No! That's why this policy was created. So, don't believe the stories SAIF wants to tell to save its own skin. The law is the law…they just don't want to follow it.

Don't be fooled. Don't let them finagle. Support what's legal. Support what's right.

Hear the message and defend the messenger.

Vote yes on Measure 38!

Oregonians for Accountability

(This information furnished by Lisa Gilliam, Oregonians for Accountability.)

Argument in Favor


Oregon is where we do business. It's where we work and live. We are invested in its future.

But, there is an ominous cloud on the horizon. If allowed to grow, it could cast a dark shadow on workers' compensation in Oregon.

A government-run monopoly in Oregon would bring an end to competition in our workers' compensation insurance market, and mean an absence of choice for Oregon businesses.


It is vital that Oregon voters act to reform SAIF and restore competition and choice to the workers' compensation market. It's imperative that state government get out of the business of selling insurance and get back to regulating it.

Real insurance reform doesn't mean one agency, or company, taking over workers' compensation insurance in Oregon. Liberty believes it would be perilous to let SAIF become a monopoly, and we aren't seeking to become one either.


Liberty is so committed to restoring competition and choice through real insurance reform that we have proposed placing a limit on how much of the workers' compensation market one company can have at any time. We are volunteering to put a cap on how much business we can do in Oregon. Have you seen this from SAIF? NO! Yet, it likes to call Liberty a predator and paint itself as the prey.

There is only one predator in this market. It has run nearly every private worker's compensation insurance provider out of the state. Now its sites are set on the last company still standing. But, it doesn't have to be this way. Together we can stop SAIF's predatory plan!

Join us in protecting competition and choice in Oregon.

Join us in protecting Oregon's businesses and injured workers.

Join us in voting YES ON MEASURE 38.

Tony Ferronato, President & CEO
Liberty Northwest

(This information furnished by Tony Ferronato, President & CEO, Liberty Northwest.)