They came, they saw, they conquered. Such has been the run of organized labor since the election of Gray Davis in the 1998 gubernatorial primary. Although much was made of Davis' anemic Republican adversaries in both 1998 and 2000, what the Democratic primary in 1998 accomplished was to set labor alone at the top of the pecking order of the majority party's "must cater to" list. Once there, the unions were not bashful about asking or demanding.

Even before the beginning of this run, labor had managed to work its way into much of the workers' compensation system.

A labor representative sits on the board of directors of State Compensation Insurance Fund (State Fund). Assembly Bill 749 (Calderon), the massive benefit increase bill signed by Governor Davis, also added the Speaker of the Assembly and the President Pro Tem of the Senate or their designees, as ex-officio non-voting members of the State Fund board. Labor is well represented on this board.

From the other end of Market Street in San Francisco, two members of organized labor recommended by the California Labor Federation AFL-CIO are on the governing committee of the Workers' Compensation Insurance Rating Bureau (WCIRB).

Insurers fund a separate actuary for these public members (there are two employers as well) to the tune of at least $100,000 annually. This allows the union to use insurers' own money to play politics.

In Senate Bill 46 (Alarcon), the draconian rate regulatory scheme co-concocted by the California Applicant Attorney's Association and a host of labor organizations (and supported by the California Medical Association), these public members would be given full voting rights on all matters before the WCIRB, including rate setting and personnel decisions. SB 46 failed passage in the Assembly Insurance Committee earlier this year. But it will be back.

In the 1993 iteration of workers' compensation reform, Assembly Bill 110 (Peace), the Commission on Health and Safety and Workers' Compensation (CHSWC) was created. By the time Governor Davis scrambled to balance massive benefit increases with soaring employer costs and an impending recall, the Commission was effectively the braintrust for organized labor and the administration. As is the case with the State Fund and WCIRB boards, the Commission has an equal number of employers and labor representatives. But few who observe the ongoing activities of the Commission would view this as a functional balance.

The constant lament from labor about the effect of SB 899 (Poochigian) on injured workers, and the railing against insurance companies that accompanies it, thus rings a little hollow.

The workers' compensation insurance industry is under a microscope. Labor sits on the State Fund board of directors, as do representatives of the Speaker and the President Pro Tem. State Fund's board sets the rates. State Fund's board is made up of policyholders and, in the case of a labor representative, an employee or member of a policyholder. Small businesses' and injured workers' labor representatives, who claim they need rate relief, not only have input to the State Fund board, they are the State Fund board. And State Fund is the big player in the workers' comp market.

Perhaps rates are where they are because they need to be. Perhaps those who have assumed a fiduciary duty by sitting on the State Fund board, including labor members, understand that. Perhaps those who understand the data and uncertainties of SB 899 understand that much has been delivered, and there is every reason to believe more will be.

That, of course, is an analysis worthy only of Pollyanna.

There is a reason that labor, attorneys, and doctors point only to the insurance industry. It's a strategy designed to separate it from the business community. It is absurd to think that self-insured employers, with a huge percentage of the employees in this state, do not see bottom-line benefits from SB 899. Of course they are, and they haven't been shy about saying so. But that would not fit nicely into the well-orchestrated talking points developed by those who seek to undermine the reforms.

In a little over a month, a report on the insurance marketplace authorized by SB 899 will be delivered to the governor and the commissioner. What it will say is anyone's guess, but it is virtually guaranteed not to provide fodder that labor seeks to justify setting prices. Will labor back off on its demands? Hardly. Will the Speaker or Pro Tem, well-briefed by their representatives on State Fund's board, acknowledge that the insurance system is responsive but that more needs to be done to increase competition for small employers? In your dreams. In reality, they will assist their disingenuous benefactors with their pushed-aside noses.

Think about labor's bottom line: rate regulation and benefit increases, rate regulation and fee increases, rate regulation and more litigation. That is its bottom line. In the calculus of opponents of SB 899, cost drivers and price are not related. Specious analysis leading up to passage of AB 749 should have been evidence enough of this. It is happening all over again.

Only this time their friend in the horseshoe may be a Republican who wants to stay in power.