State Compensation Insurance Fund spent more than $100,000 recruiting a president who was its interim president and who lasted only six months, according to documents obtained by Workers’ Comp Executive. Jim Tudor was hired in September 2006 by State Fund as its permanent president after a lengthy IR Group search. Tudor was shown the door in March 2007 under a storm cloud of scandal.

It’s not known how many candidates State Fund had to consider, but it chose to hire from within. The search was guaranteed by the headhunter, IR Group, and the contract says if the placed candidate leaves “for any reason other than death or disability after six months of service but short of one year, we will, at your option, conduct a second search at a cost of 50% of this project plus travel expenses. [bold type by IR Group] Please do not be alarmed by this clause. We do not expect this to happen.” Little did they know.

IR Group also was retained as the recruiter that searched out and brought Janet Frank to State Fund. She resigned in August 2007. But because Tudor was not an external hire, it appears State Fund paid full price or in the vicinity of $100,000 for Janet Frank.

After issuing 15 requests for proposals and receiving only four responses, State Fund’s Board of Directors opted to continue its relationship with IR Group.  The board made that decision in January (see story Search On…). IR Group is currently engaged to find a replacement for Frank. It appears to be having trouble finding candidates to fill the spot, yet it refuses to release the terms of the current contract.

State Fund lawyers and spokespeople say that State Fund contracts can be kept under wraps for a year per the California Government Code. This isn’t standard practice for most agencies, First Amendment attorneys tell Workers’ Comp Executive.

“It does fall under the one-year complete exemption. Because of the sensitive nature of contracting, State Fund has never waive[d] that exemption,” says State Fund attorney Chuck Fortunato.

State Fund spokeswoman Jennifer Vargen confirmed the exemption as necessary to protect the integrity of the contracting process.

“IR Group is the only recruiting firm we have hired and only for the CEO position,” she says.

The two-page “Letter of Understanding” lists several terms, including that IR Group would conduct formal reference checks and use an outside resource for DMV, criminal and financial background checks. It also says the IR Group will provide a timeline with key milestones and written progress reports.

Because Tudor was not an external hire, that would indicate that there was no reduction in the cost to hire Frank. Workers’ Comp Executive asked for a copy of the recruitment contract that was used to hire Janet Frank. It’s not even known if a new contract was negotiated. For that reason there is no way to know if IR Group negotiated new pricing or retained the same structure. State Fund, which was very responsive to last-minute questions, was unable to confirm if there was a new contract by deadline.

“I still have not been able to verify whether there was or was not another contract.  I have reviewed the [Board of Director] minutes and they are silent on the issue,” Fortunato says.

Janet Frank was hired in August 2007.  She announced her resignation in September 2009.

For copies of the the complete contract for the Jim Tudor recruitment effort, click here or visit our Resources section at www.wcexec.com.