Sludge company's ex-representative pleads guilty
National News
A former representative of a Texas company pleaded guilty Monday to federal bribery conspiracy, admitting a multiyear scheme to win a sludge recycling contract through cash and trips for Detroit officials.
Jim Rosendall's cooperation with the FBI led prosecutors to recommend a sentence of no more than 11 months in prison, well below the five-year maximum.
The company used cash and plane trips to Las Vegas to curry favor with Detroit officials and win the $47 million contract to recycle sludge, according to a criminal charge unsealed earlier in the day.
The city officials were not identified.
The influence-peddling game reached a climax in fall 2007 when a city council member accepted payments to vote in favor of a deal with Synagro Technologies, the government alleges. The contract was approved, 5-4, in November 2007.
"People expected me to give things to get their support," Rosendall, former president of Synagro of Michigan, said in court.
Earlier Monday, Mayor Ken Cockrel Jr. addressed speculation about a federal investigation into the conduct of city government members. "I think we'll have to see how it plays out," he said.
Rosendall's guilty plea comes more than four months after Kwame Kilpatrick resigned as mayor and went to jail in a sex-and-text scandal after admitting he lied during a civil trial to cover up a torrid affair with his chief of staff.
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Workers’ Compensation Subrogation of Administrative Fees and Costs
When a worker covered by workers’ compensation makes a claim against a third party, the workers’ compensation insurance retains the right to subrogate against any recovery from that third party for all benefits paid to or on behalf of a claimant injured at work. When subrogating for more than basic medical and indemnity benefits, the Texas workers’ compensation subrogation statute provides that “the net amount recovered by a claimant in a third‑party action shall be used to reimburse the carrier for benefits, including medical benefits that have been paid for the compensable injury.” TX Labor Code § 417.002.
In fact, all 50 states provide for similar subrogation. However, none of them precisely outlines which payments or costs paid by a compensation carrier constitute “compensation” and can be recovered. The result is industry-wide confusion and an ongoing debate and argument with claimants’ attorneys over what can and can’t be included in a carrier’s lien for recovery purposes.
In addition to medical expenses, death benefits, funeral costs and/or indemnity benefits for lost wages and loss of earning capacity resulting from a compensable injury, workers’ compensation insurance carriers also expend considerable dollars for case management costs, medical bill audit fees, rehabilitation benefits, nurse case worker fees, and other similar fees. They also incur other expenses in conjunction with the handling and adjusting of workers’ compensation claims. Workers’ compensation carriers typically assert, of course, that, they are entitled to reimbursement for such expenditures when it recovers its workers’ compensation lien. Injured workers and their attorneys disagree.