Investigation of State Fund Ends With No Charges Filed

A four-year criminal investigation into the State Fund has ended without any charges filed reported the Los Angeles Times this week. News of the investigation was released by State Fund in an internal staff memo made public. 

According to the Times, Tom Rowe, State Fund's president, said he was told officially that a task force made up of the California Highway Patrol, the state Department of Insurance and the San Francisco district attorney's office "has completed its investigation of former State Fund employees and directors."  The district attorney "will not be filing any criminal charges," Rowe said.

The investigation began in March 2007 when State Fund's board of directors fired then-President James Tudor and Vice President Renee Koren after an internal review.  A Department of Insurance audit, released in December 2007, found potential conflicts of interest with two board members whose private firms collected at least $265 million over 10 years from State Fund for administering group policy programs. The two had resigned under pressure from the governor's office six months earlier, reported the Times.

The investigation served as a catalyst for changes at the $21-billion State Fund, including requirements for holding open meetings and making the insurer subject to the California Public Records Act.

"The end of this investigation marks another important step in closing this chapter in our history," Rowe told employees in the State Fund internal memo, reported the Times. "[The] most recent operational review has confirmed that State Fund is a much stronger and more transparent organization today."

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