Politics & Government

Investigator finds Washington insurance commissioner’s judge wasn’t truthful about out-of-court contacts with parties

An outside investigator hired by the state Office of the Insurance Commissioner has found the agency’s longtime hearings judge was untruthful and misleading about her out-of-court contacts with a lawyer in a case pending before her.

Such conduct may trigger personnel actions. Lawyers for Judge Patricia Petersen, who presided over administrative hearings at the insurance-regulating agency for 28 years until she was suspended in mid-May, said Commissioner Mike Kreidler is considering actions including termination.

Those lawyers issued a 14-page rebuttal to the investigator’s report Thursday, as well as a memo that calls the report inaccurate and a “whitewash.”

“We hope the commissioner will rethink his intent to discipline Judge Petersen,” wrote Petersen’s legal team, which includes Phil Talmadge, Tom Fitzpatrick and Ed Younglove.

Kreidler released a statement late Thursday, saying he appreciated the thorough investigation and clear report. He suspended the judge because it appeared Petersen improperly communicated with a lawyer in the Seattle Children’s Hospital case pending before her.

“I believe the report supports the actions I took to protect the integrity of the legal proceedings brought before my office and was the most impartial and unbiased way to look into all of the allegations,” Kreidler said.

The report may not quell the political cloud Petersen’s situation has created around the OIC. Talmadge and others have called for changes in law to forcibly move OIC administrative hearings over to the Office of Administrative Hearings, which handles legal reviews for many agencies, including the OIC in one instance over the past decade.

Petersen’s memo also says the 24-page investigative report by lawyer Patrick Pearce has inaccuracies, such as claiming Petersen’s husband had a connection with Seattle Children’s Hospital even though the husband’s connection was 32 years ago. The legal team says Petersen now faces threat of dismissal “because she stood up for judicial independence and every citizen’s right to have their case heard by an impartial judge.”

The case and the politics around it have grown a bit convoluted and tense. Republican Sen. Mike Padden of Spokane Valley held a hearing last month to look into judicial independence issues raised by Petersen’s claim that OIC’s chief deputy commissioner, Jim Odiorne, was having contact with her about cases, applying pressure to rule certain ways.

Democratic Sen. Adam Kline of Seattle suggested at the time that there may be political motivations behind the attacks on Kreidler and the Affordable Care Act, which Kreidler has been trying to implement.

In the Seattle Children’s case, the hospital was challenging approval of insurance networks that left out specialty care that the hospital provides.

The investigation by Pearce suggests that Odiorne was acting within his legal powers as supervisor of the judge.

The investigator’s report discusses Petersen’s filing of a whistle-blower complaint with the state Auditor’s Office and her subsequent attempt to anonymously send a copy to Mike Madden, an attorney in the Seattle Children’s case. Investigator Pearce writes that Petersen “feigned ignorance” during a May 14 hearing on Seattle Children’s case when asked directly by Madden if she had sent the document.

Pearce said she went further in trying “to mislead the parties regarding her knowledge, responsibility, and involvement.”

Pearce concludes that Petersen was “not truthful or candid” with Kreidler when he asked her about the issue May 14 and when she sent a May 27 letter to Kreidler admitting she had sent the complaint to Madden but saying it was an accident.