Bakke Calls Defendant Indvik

November 12, 2010

Indvik was WSI's board chair from January 2004 to December 2007.  He said that his relationship with Jim Long started out pretty fair, but as time progressed Jim had problems with the team concept.  He always spoke in terms of I not we. 

Regarding the board thinking that Sandy Blunt's charges were political, Indvik thought that it was convenient that one of WSI's most ardent critics was at the news conference which announced Blunt's charges.  Joel Heitkamp is a democrat and no republicans were there. 

He noted that the charges against Blunt were regarding promotional items, that many CEOs did exactly the same think, and OMB gave us their blessing.

He said the board chose Halvorson as interim CEO because he had the best rapport with the staff and a long association with workers comp.  Halvorson was not controversial.  Indvik said Long's name was not even mentioned for consideration for CEO, that WSI would have lost 90% of its staff if it had appointed Long.

Regarding the alleged inappropriate relationship with Billie Peltz, Indvik stated that Sandy Blunt had told him he had to do something and that Blunt said Long told him Billie wanted an affair with him.

With regard to the issue of nepotism, the board understood they'd have to address the fact that Halvorson's wife and brother-in-law worked at WSI and so he met with Tim Wahlin, Jodi Bjornson, and ran it by the AG's office.  Wahlin said that Halvorson's wife and brother-in-law would report to Long and not Halvorson.  Bakke presented minutes of a board meeting where it stated nepotism could be waived in cases of emergency and on a temporary basis. 

Indvik said he was aware of a power struggle between Long and Halvorson and he had daily conversations with Halvorson who said Long was trying to go around him. 

Regarding the ITTP issue, board member Evan Mandigo emailed Long and cc'd Indvik that the board did not wish to intervene.  Staffing of the ITTP project was not a board issue.  Indvik said that Halvorson was of the opinion he was pushed out of the loop by Long.  He thought Justin Data's email meant that when Blunt was there, there was a clearer chain of command. 

At this point Bakke asked whether Long was trying to notify the board of violations of law or illegal conduct.  Indvik said no.  He asked whether Long ever complained about injured workers not getting a fair deal or whether Long complained about the Chamber of Commerce meeting.  Indvik said he had not, nor had he complained to him about anything manifesto.

Indvik said Long did not have authority to search Mark Armstrong's desk and that Grinsteinner did not advise him that she wanted to search that office.  He said the audit charter finds no authority for Grinsteinner to do that search.  Indvik said he was never shown ethical standards for internal auditors and he was aware of none.  He said the Connolly report recommended terminating Grinsteinner and he would have voted for termination. 

Regarding Long's October 22, 2007 whistleblower complaint, Indvik said all whistleblower complaints are investigated.

He criticized Grinsteinner for sending an email to the state auditor's office about concerns at WSI from her home computer.  He said that it was a violation of the chain of command.  She should have gone to Mandigo.  Regarding Grinsteinner's concerns of WSI improperly denying claims, he said she had nothing to do with claims, but he figured the press would love it.  As a result of Grinsteinner's complaint, they had to have the governor and state auditor's office do an independent review which cost $500,000.  He said that it was important to have the governor's office involved as they needed transparency and if people doubted WSI and the governor, then ok. 

Plaintiff attorney Tom Tuntland then did his cross examination of defendant Indvik.  He asked if an employee believed a CEO was engaged in illegal activity with the consent of the board, who would that employee bring the issue to?  Is there anything in the handbook that says they can go to law enforcement?  Indvik said there was nothing that said they could not. 

Tuntland asked whether Indvik had ever seen the internal audit ethical standards.  He had not.  Tuntland then read from the internal audit charter which stated internal auditors would have full and unrestricted access to records, property, and personnel and also stated that the document referred to a code of ethics.  He questioned whether Indvik had ever asked Grinsteinner for her ethical standards.  Indvik had not. 

Tuntland asked if Grinsteinner found evidence of wrongdoing by the board, who would she go to?  Indvik said he didn't know if that were in the charter but in his opinion, go to the CEO.  What if the board and the CEO work together?  You'd go to legal.  Not police?  Indvik said that they could not prevent that.  Tuntland established that the board expressed a belief that Sandy Blunt was innocent. 

Regarding democrat Joel Heitkamp being at the news conference, Heitkamp also hosts a radio show and the fact that WSI CEO was charged with a crime was news.

He asked Indvik whether he'd ever read Mark Armstrong's journal.  Indvik said no.  Tuntland read an excerpt that said, "Chair Indvik wants to be aggressive against media.  Figure out a way to battle against Riha (Burleigh County States Attorney)."  Indvik said they wanted to get the story out.  Why pick on Sandy out of all the CEOs for buying a birthday cake.  Tuntland asked if the States Attorney brought charges, approved by a judge, you thought it appropriate to go after the States Attorney.  Indvik said they could look at that.

Tuntland:  You're asking Mark Armstrong to short circuit a criminal proceeding?
Indvik:  No, I'm just questioning why Sandy was charged for something every CEO had done.

Tuntland asked whether he was aware that Blunt had committed WSI to issue a $150,000 safety grant before the safety grant program had been approved.  Not that I'm aware of, Indvik replied. 

Tuntland then turned to the ITTP software project.  He looked at excerpts of an email Justin Data had sent Jim Long stating that he had witnessed an erosion of the management structure that had proved successful over 14 months, "especially in executive committee decisions you are making to support the project are being reversed or changed at the 9th hour by your superior".  Tuntland asked whether there was anyone else who the superior could be besides Halvorson.  Indvik stated that Justin Data didn't know who Long's superior was.  Tuntland told Indvik that since Jim had received an alarming email from Data indicating the 14 million dollar project was in jeopardy, did Jim do anything wrong in bringing that to the board of directors?  Indvik said without going through Halvorson first, yes and that he thought Data's letter fit in with what he had been hearing from Halvorson.  That Halvorson was being shut out of the loop.

Defense attorney Randy Bakke then began has redirect of Indvik.  He established that since Grinsteinner's job was on the line, he would have expected her to produce her code of ethics to save her job.  He also noted that if Long had been the one to do the search, he could not have relied on the internal audit charter. 

Regarding the news conference, Bakke noted that Heitkamp was standing directly behind Riha and asked whether the press normally stands.  Indvik said no it was just other democrats and that it was more then just dumb luck. 

Regarding the ITTP software project, Indvik felt that as Halvorson was not kept in the loop, the project was doomed to failure.  He also noted that Halvorson was the project executive sponsor after Blunt left and was the final arbiter for significant decisions.  Indvik said Data referred to how well it went when Sandy Blunt was there. 

Bakke asked whether any of this was a violation of the law or an indication of illegality.  Indvik said no.

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