Insurance chief keeps deputy on job as consultant


ANNAPOLIS -- The legislature did away with A. Samuel Penn's job as deputy insurance commissioner about three months ago to save money, but Mr. Penn is still on the job as a consultant and likely to remain there for the foreseeable future.

State Insurance Commissioner John A. Donaho, anticipating that Mr. Penn's job as a state employee would expire when the fiscal year ended at midnight Sunday, confirmed this week he has hired the former PHH Corp. executive vice president as a contractual worker at the same salary of approximately $62,500 a year.

"This has been in the mill ever since the legislature abolished the job," Mr. Donaho said, adding that Mr. Penn's duties would be unchanged except that, as a contractual employee, he would not be allowed to sign "legal instruments."

"But his duties were primarily for internal administration. That is a very critical need here," Mr. Donaho said.

Delegate Timothy F. Maloney, D-Prince George's, chairman of a House Appropriations subcommittee that reviews the Insurance Division's budget, said the General Assembly did away with the deputy commissioner's job because it had been vacant for more than a year. Other long-vacant jobs were similarly deleted to save money, he said. Mr. Penn was not named to the job until the day the subcommittee held its budget-cutting session, Mr. Maloney recalled.

At the time the position was abolished, rumors persisted in Annapolis that lawyer-legislators such as Mr. Maloney and Senate President Thomas V. Mike Miller Jr., D-Prince George's, wanted Mr. Penn out because of his interest in no-fault insurance as chairman of the Governor's Commission on Insurance. Mr. Maloney, Mr. Miller and other legislators strongly denied this.

Since the legislature adjourned, Mr. Donaho has made overtures to Gov. William Donald Schaefer and other members of the Board of Public Works to restore the deputy commissioner's position but has been rebuffed.

Mr. Donaho also acknowledged his office has hired William F. Cole to help with computerization of the Insurance Division. Mr. Cole previously worked for state Budget Secretary Charles L. Benton Jr. as a liaison to other state agencies on computer matters, but his unit was abolished earlier this year because of budget constraints.

The hirings did not sit well with Frank H. Pratka, labor relations representative for the Maryland Classified Employees Association.

"If they were able to find $65,000 for Mr. Penn, why can't they come up with funds to do other things that under normal circumstances are routine?" Mr. Pratka asked.

Mr. Donaho said the rest of the department is not affected by Insurance Division actions because, by state law, money appropriated for insurance purposes cannot be mingled with other department funds.

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