Carcieri is seeking to purge the leadership of Beacon Mutual, which has come under fire since the scathing report issued last month by outside consultants revealed that Beacon gave preferential rates to some companies and maintained "inappropriate relationships" with certain insurance agents.

Carcieri threatened to forcibly remove Nee and Boeniger, both Democrats who work for labor unions, if they did not resign voluntarily by April 25. http://www.projo.com/digitalbulletin/content/projo-20060425-beaconfolo.6ef72a14.html

Nee and Boeniger filed suit to stop Carcieri. Nee and Boeniger’s lawyer, Marc B. Gursky called the governor’s actions “illegal” and “discriminatory treatment” based on their labor union ties.

Beacon, a nonprofit mutual, was created by the General Assembly to provide coverage to Rhode Island employers at the ``lowest-possible cost.'' It has become the state's dominant workers' compensation carrier, insuring about 90 percent of all Rhode Is land employers.

Beacon is now under investigation by the state attorney general and a statewide grand jury. State investigators will be assisted in their probe by the FBI.

When Fortunato asked Gursky in court today if Carcieri has the power to remove Beacon board members, the labor lawyer replied, “Not at all.”
Gursky went on to say that even if the governor were to have the authority to do so, he would have to follow the Constitution.

“Because he has prejudged these two … [the governor] is not in a position to make a fair decision,” Gursky argued.

In the half-hour hearing before Fortunato this morning, discussion centered on what laws regulate Beacon, the state’s dominant workers’ compensation insurer, and whether the governor has the authority to remove members of the Beacon board.

-- With reports from projo.com staff writer Kate Bramson