New York (State). Commission for Investigation of Workmen's Compensation Law Administration.

In 1942, the New York City Department of Investigation, under the direction of Commissioner William B. Herlands, conducted a study of irregularities in the Workmen's Compensation Law affecting municipal employees and New York City as an employer. The investigation revealed such problems as the submission by doctors of fraudulent bills to employers and insurance companies. New York Mayor Fiorello H. LaGuardia reported these irregularities to Governor Thomas E. Dewey and requested that he order an investigation.

LaGuardia's report, combined with other reports of statewide maladministration of the Workmen's Compensation Law by the Department of Labor over many years, led Dewey to appoint a Moreland Commissioner to investigate the provisions and administration of the Workmen's Compensation Law. On November 17, 1942, Dewey appointed William F. Bleakley to this position for the remaining six weeks of Dewey's term of office, and Bleakley appointed Herman T. Stichman as his counsel. On January 4, 1943, having been reelected, Dewey appointed Bleakley and Stichman as Commissioners to continue the investigation.

The Commissioners hired a staff of accountants, attorneys, and New York State and New York City police officers and detectives to carry out the investigation. The staff investigated hundreds of complaints of injured workers. The Commission examined about 1,000 witnesses at private hearings and about 250 witnesses at public hearings, and subpoenaed and examined the records of doctors, insurance companies, and other parties involved in compensation cases. Among the charges and issues investigated by the Commission were: inefficient administration of the Workmen's Compensation Law by the Labor Department and appointment of political favorites, not qualified individuals, as referees; claimants virtually forced to retain Department-of-Labor-licensed representatives who were aided by a clique of lawyers to whom they paid wages, and the unequal treatment of unrepresented claimants; and illnesses and injuries were not promptly and adequately treated and money intended for such purposes was siphoned off by a "ring" of doctors, lawyers, licensed representatives, and others; for instance, doctors padded their bills and paid kickbacks to licensed representatives and lawyers in return for cases referred to them, and doctors received kickbacks from x-ray and surgical supply firms in return for referring cases to them.

The Commission submitted its final report to Governor Dewey in 1944, recommending numerous legislative and regulatory changes to ensure lawful, effective administration of workers' compensation.

From the New York State Archives, Cultural Education Center, Albany, NY. Agency record NYSV90-A43