“Do as we say, not as we do” seems to be the appropriate motto for the Louisiana State Licensing Board for Contractors (LSLBC). Recent reports of insurance fraud and corruption are making it clear that there are problems within the Residential Contractors Board. According to a recent news story, it appears that at least one of these Contractors Board members has been caught for a second time defrauding workers comp insurance companies by reclassifying payroll to avoid paying premiums.
This is ironic considering that the millionaires that make up the board recently began trying to enforce unlawful rules designed to dominate their smaller competitors by requiring nearly every subcontractor to carry workers comp and general liability insurance. These new rules, which are not required by state law, are being enforced on everyone from cement finishers to brick layers.
Reporter Lee Zurik revealed in his bombshell story that one board member first skipped out on $1.2 million in premiums back in 2005. Once caught, he used his father to bankrupt the company, leaving workers comp holding an empty bag. One would think that the Contractors Board would have disciplined this board member in some way. After all, he is a licensed contractor. But sadly, no. They not only allowed him to keep his license and remain on the board, but they actually promoted him within the board. According to the report, he’s been caught again using the same accounting tricks. So what do we hear from the prestigious Residential Board for Contractors? Silence.
Now don’t get us wrong. We are not here to represent workers comp insurance companies. As a matter of fact, we couldn’t care less what LSLBC board members pay in insurance premiums. What we do care about are the everyday hardworking families who have been in the construction business for generations, who are being bullied by the board and forced to carry expensive, unnecessary insurance to do even the most basic construction tasks.
If the Contractors Board feels that insurance premiums are so high that fraud is justified among their members, why are they crushing working families with these same burdens? These insurance premiums eat up profits and add unnecessary costs to consumers.
Imagine for a moment, if you will, a board that is made up of wealthy businessmen who work to gain advantage over their smaller competitors (a board that decides who gets disciplined and who does not). And keep in mind, the only way to get on this board is to be politically connected. It’s not as though ordinary business owners are serving on this board. You have to be in the know, and be able to pay to play. As the story showed, the board member in question has donated over a million dollars to political campaigns (roughly the same amount that he supposedly swindled out of workers comp).
Now that we’ve witnessed the board’s strategy of enforcing rules on its competitors while privately cheating on their own, we will be working with the state Legislature to demand a full audit of each board member. We would ask that the board suspend any ongoing investigations into their smaller, more vulnerable competitors until these audits have been completed. Let’s make sure that the board members’ closets are clean before they dig around in other people’s affairs.
The Residential Contractors Board is a rather new arm of the Contractors Board and has proven itself to be untrustworthy, corrupt, and just plain unnecessary. The board claims to have the ability to police the industry, but it can’t seem to even police itself.
Tommy Cryar
Biscuit Smith
Independent Builders Association