OCPA's Jonathan Small: Government Waste

By Jonathan Small, CPA/Oklahoma Council Of Public Affairs ~ It was recently reported that the Oklahoma Employees Benefits Council (EBC) hired a private lobbying firm, Capitol Gains, to work on its behalf at the state Capitol this session.

The contract pays $4,000 a month, and up to $48,000 a year.

The EBC, according to the agency’s website, “is your employee benefits department. We design, select, and administer benefits for you and your family.”

In other words, the state legislature provides general guidelines for benefit insurance options for state employees and then tasks EBC with administering those guidelines, much like a human resources department of a company would do.

So why in the world is an agency that is a part of the human resources function for state employees hiring a lobbying firm?

According to EBC’s communications officer, Brian King, “The purpose for hiring Capitol Gains is to represent 35,000 state employees and their families, and it is ‘mission critical’ that they have that representation. The Council provides information to lawmakers relating to what’s in the best interest of state employees and their families in terms of benefits. It is our responsibility to be a resource to lawmakers as they debate and discuss legislation that impacts the health and benefits of state employees and their families.”

It’s as if EBC thinks it’s a state employees association. Oh, wait, that already exists. It’s called the Oklahoma Public Employees Association (OPEA). OPEA can’t be too thrilled that EBC has decided to outsource—tacitly admitting that private-sector firms are more effective than public employees when it comes to getting results.

Now some (including EBC) are quick to point out that EBC is non-appropriated—the legislature does not appropriate any money to the agency. But that statement conceals some important information. EBC is funded by approximately 1.25 percent of the premium paid for each employee’s benefit insurance products that are purchased through EBC.

State employees, at both appropriated and non-appropriated agencies, receive a benefit allowance (which is a monthly payment from the state) to pay for their selected benefit products. When any state-appropriated agency pays insurance premiums for state employees, 1.25 percent of those appropriated funds are kept by EBC. The legislature does not have to appropriate any funds to EBC, because state-appropriated agencies have to give appropriated funds to EBC directly.

Let’s hope that the longtime Secretary of Human Resources, Oscar Jackson, who sits on EBC’s Council, is as outraged as are many of the taxpayers who are forced to fund this waste.

EBC’s grotesque use of funds is another reminder why OCPA recommended that the EBC and OSEEGIB (the Oklahoma State and Education Employees Group Insurance Board) be consolidated. Indeed, one has to wonder if the hiring of the lobbying firm has less to do with the state employees who get services from the agency and more to do with the employment interests of some state employees in leadership at the EBC.

[Note: Capitol Gains is the firm of lobbyist Bobby Stem.]

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