Washington standard. [volume] (Olympia, Wash. Territory) 1860-1921, 1915-12-24
NEED LEGISLATION TO CURB CRAFTERS
RIFIING HAVING STRICT
LAWS ENACTED TO HALT FURTHER
EMPLOYEES.
.,~ 49,
ST 81 7 49, ?
(By James DeK. Brown

IL mas cost the employers or the
state who come under the provisions
of the industrial insurance act some
thing like $4,000 to have glaring
errors in the statute poitned out.
These errors or loopholes in the law
call for remedial legislation, and
should have been discovered long be-
fore this time. An element of luck
entered very largely into the discov-
cry Of the populations of the state
funds, and it was this same element
of luck which started an investiga-
ton that is now stirring Olympia and
the Northwest.
Just how deep the dip into the in
dustrial insurance funds extends, or
how long these persons who have
been engaged in the looting have
ben operating will probably never be
known, unless someone on the inside
or outside gives up the inner secrets
of the organization.
Probe Started by q Slip.
The probe now under way was
started by slip. The ring" became
too eager-the graft was too soft
and like all easy money, it went
faster than it could be obtained, even
when taken in lump sums to the
amount Of $4,000 for few months
operations. Only comparatively
few actual fraudulent claims have
been uncovered. These are claims
which did not 60 through the regular
routine Of the Office. These may be
all of the frauds. but there is strong
reason to think not.
Operating under the same system.
but allowing the claims to follow the
regular Office routine. would only
mean a delay of several weeks, or
possibly months. There would have
: been no way of uncovering the graft
except by an element of luck. 1t may
have been done in the past. It pos
sibly was. There IL nothing to indi-
cate that It was or was not, except
the fact that the state was looted.
The commission receives something
like 1900 claims a month. One
fraudulent claim, made out and "put
over" by persons thoroughly familiar
with the routine Of the Office, could
have been cashed in, with the chances
largely in favor of the confidence
people. This may have been the
start, and then the rushing of claims
through faster as the operators be-
came more bold and certain Of them
selves. followed. This rush, by lift
ing fraudulent claims out of the ordi-
nary Office routine. resulted in the
disclosure of the frauds.
The industrial insurance depart
ment of the state is the only depart
ment Of the commonwealth where
state money is paid out without a
voucher sworn to before notary
public. Here is one of the first glar-
ing errors in the law. The state
auditor discovered this error. He
laid the matter before the attorney
general Of the state, who in turn,
after a careful scrutiny OF the law,
rendered an opinion that such vouch-
ers were not necessary. Deputy Au-
ditor Fred Jameson declares his Of
flee asked for the opinion on the mat
ter and received 1t.
Lax Method Used.
Outside of the industrial insurance
department, no state warrant Is issued
until a voucher, sworn to before a
notary public, that such money is
legally due, has been filed with the
auditor. In the insurance depart
ment this acknowledgment Of the cor
rectness of the warrant is not re-
quired. The commission certifies that
the claim has been passed through
it's department and is correct and the
money due. The claimant ID not re-
quired to swear before an officer or
any person authorized to take such
acknowledgment that such claim is
correct.
Other departments of the state re-
quire 1t.
Another defect in the law is an
absence of any requirement that the
commissioners, who handle millions
of the states funds. be bonded. The
commissioners have bonded some of
their employees, but they themselves
are not bonded to the state. This is
another departuref rom the ordinary
business precautions of other depart
ments. and was overlooked when the
compensation act was considered by
the legislature.
Third Defect in Law.
A third defect in the law is to be
found in the filing of claims. The
claimant, the employer, and the at
tapdinp Dhvsician are required to fill