State Probes Alleged Bribes of Workers’ Comp Judges : Courts: Inquiry targets L.A., Orange counties. Official cautions that rumor, innuendo surround the allegations.

State authorities are investigating whether workers’ compensation court judges in Orange and Los Angeles counties have accepted expensive gifts from private attorneys and doctors whose cases regularly appear before the court.

For several months, the state Department of Industrial Relations has been looking into complaints of corruption within the legal system that resolves claim disputes between injured workers and companies providing workers’ compensation insurance for medical expenses.

“We have an investigation under way related to allegations of corruption and misconduct among a number of workers’ compensation judges in Southern California,” said John Duncan, a spokesman for the industrial relations department. “We are taking these allegations very seriously.”

Duncan declined to comment further. But sources familiar with the investigation, who requested anonymity, said the investigation is wide ranging and has focused on a substantial number of judges, clerks, doctors and private attorneys representing injured workers who dispute the amounts their insurance companies are willing to pay for their injuries.

Among other things, state authorities are looking into whether judges and court employees received gifts, honorariums for speeches and expensive trips furnished by private attorneys and doctors who specialize in workers’ compensation cases.

At the workers’ compensation courts in Santa Ana and Anaheim, at least five of 13 judges have come under scrutiny, sources said, including presiding judges Ellen L. Flynn and Adolph U. Molina.

In Los Angeles County, it is not known how many judges and court staff are part of the investigation.

Flynn, who is the presiding judge in Anaheim, could not be reached for comment. But Molina, who oversees the workers’ compensation court in Santa Ana, denied any impropriety and said he has not been interviewed by any state investigators.

Molina said he once went to the Hawaiian Islands at his own expense to speak to a group of attorneys about workers’ compensation law. The trip, he said, was a combination of work and pleasure.

“I paid for my own vacation. I have the checks just in case anything like this ever occurred,” Molina said. “I was never paid an honorarium and I made it clear I did not want anyone to pay for me. There was nothing illegal about it as far as I was concerned. . . . This is really a surprise to me.”

So far, no conclusions have been reached in the state inquiry, said Casey L. Young, the administrator for the workers’ compensation division of the Department of Industrial Relations. Criminal charges could be filed if the investigation turns up evidence that bribery has occurred. Young cautioned, however, that much rumor and innuendo surround the investigation.

“Certainly, there is a degree of hysteria within workers’ compensation because of the cost concerns,” Young said. “Judges do tend to take the heat and get a lot of unfair criticism between the warring parties. I would not be assuming there is anything to this right now. Until we get the facts, I cannot make any judgments.”

According to information obtained by The Times, Young hired a retired state Department of Justice investigator several months ago to check into complaints that judges and court staff might be accepting bribes and substantial gifts.

Since then, the inquiry has centered on whether some lawyers in Southern California have managed to get their workers’ compensation cases before judges whom they have bribed in return for decisions giving their clients the insurance payment they request for their injuries.

Assisting in this endeavor, sources said, are court clerks or administrators who have been paid off to ensure that the claim disputes are sent to the appropriate judge.

The cases in question usually involve disagreements between insurance companies and injured workers over amounts of medical bills and the types of treatment received by the worker.

Sources said the gifts purportedly given to judges and court staff include tickets to sporting events, lavish parties, cash payments and weekend outings to Las Vegas, as well as expensive vacations to Mexico, Europe and Asia.

In addition, the investigation has examined whether judges have had business relationships with lawyers who appear before them or have been hired to perform legal work when off the bench for those same attorneys.

Suspected loans from attorneys to judges have been scrutinized, sources said, as well as honorariums and conference fees purportedly received by judges who appear at functions hosted by workers’ compensation attorneys and owners of medical clinics.

Of lesser importance, sources said, the state is looking into other reports of widespread violations of court ethics and legal procedure. They include judges who make key decisions without proper hearings or discuss important matters in a case with only one side present.

“There is an internal investigation going on,” Young said. “Obviously we are concerned enough about the allegations to hire an investigator. I want to stress, though, that this is an investigation, not a conclusion.”

The investigation comes as the state Legislature is considering proposals to revamp California’s $12-billion-a-year workers’ compensation system, which is widely criticized for its comparatively high cost to employers and low benefits for seriously injured workers.

Insurance companies and employers, who pay for workers’ compensation insurance, also contend that the system is riddled with abuse because few safeguards exist to prevent fraudulent medical bills and psychological stress claims.

The state’s increasingly costly program to compensate employees hurt on the job has been singled out by employers as a major barrier to reducing joblessness and restoring economic vitality to the state.