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Published on: 1/15/2008
Last Visited: 1/15/2008
The state Department of Commerce and Insurance has sued Ronnie Hart, president and chief executive of the Tennessee Restaurant Association, contending that he mismanaged the workers' compensation fund and dipped into reserves without proper approval.
The suit says that Hart's company, Hospitality Management Plus, was sometimes paid double the contracted rate in the nearly 10 years it ran the fund, and that Hart traded on personal relationships with the trust's board to "induce them to approve otherwise excessive fees."
Hart, a fixture in the restaurant industry who makes roughly $102,000 a year as the group's top lobbyist, says he did nothing wrong while running the fund, which was set up to pay injured workers' medical bills.
Suit: Hart was overpaid
Hart said he no prior experience running a worker's compensation fund, but he learned on the job from 1993 to 1995, when the restaurant association hired a firm to administer the trust.
Hart started a for-profit company to run the fund starting in 1996.
Each year from 1998 to 2005, Hart's company was paid more than the contracted amount for running the fund, according to the state's lawsuit.In 2004, for example, Hart's company was paid $642,000 in administrative fees - or more than double the $315,000 a year called for in his contract, the suit says.
Hart and his company were also paid $662,438 in marketing fees from 2003 to 2005 without the trust board's permission, the suit contends.
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Hart acknowledged that the Franklin-based consulting company was partly owned by his son, Clint Hart.
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Lobbyists Ronnie Hart, left, and Josh Hilton wait outside House chambers in 2002.Hart, Tennessean Restaurant Association head, has been sued. (FILE / THE TENNESSEAN)