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SALEM — A Marion County judge ordered the state-owned workers' compensation insurer Thursday not to destroy or conceal records after a former Saif Corp. employee said his bosses ordered him to do just that.

A lawyer for Saif — which is already under investigation by a state ethics panel because of questions about its dealings with former Gov. Neil Goldschmidt — flatly denied the allegations and said they are politically motivated.

Gov. Ted Kulongoski, a longtime Saif supporter, said he had asked Attorney General Hardy Myers to investigate the charges by Mark Cohen, a former Saif public relations manager.

"Unauthorized destruction of public records is against the law, and cannot be tolerated by any public official," the governor said. "These allegations are very serious, and I believe they require immediate investigation."

Circuit Judge Paul Lipscomb granted a restraining order sought by John DiLorenzo, a Portland lawyer representing Oregonians for a Sound Economic Policy, a group financially supported by rival insurer Liberty Northwest, a private company.

In an affidavit filed with the court, Cohen said he was ordered by Saif officials to delete documents from his computer "to avoid producing them pursuant to" DiLorenzo's requests.

Cohen also said he was following orders when he made paper copies of the records before deleting them from the computer and then took the copies home.

Mike Mueller, Saif vice president for legal affairs, said Cohen is a disgruntled ex-employee who was "asked to resign in early March" because of poor performance.

DiLorenzo has waged a lengthy court battle to obtain Saif documents under the state public records law. He argues that Saif's status as a publicly owned corporation gives it tax breaks and other advantages that are unfair to private rivals like Liberty Northwest.

Saif officials respond that the company's nonprofit status helps stimulate competition and make insurance more affordable.

DiLorenzo said Thursday that he believes some records he has sought may have been destroyed or concealed. Many records he has requested over the past two years involve Saif's public relations strategies.

Lipscomb ordered Saif to appear in court July 2 to show cause why it shouldn't be held in contempt of his 2001 order that it produce records sought by DiLorenzo.

DiLorenzo won a state Court of Appeals ruling last year that gave him access to many Saif records, including ones showing Saif paid Goldschmidt's Portland consulting firm about $1 million.

That led to a complaint filed with the state ethics panel alleging that Saif illegally failed to report all of its lobbying expenses. The case is under investigation.

Goldschmidt cut off ties with Saif in December following publicity about the payments. Goldschmidt took a leave from his firm after revealing last month that he had had illegal sexual relations with a 14-year-old girl while he was Portland mayor in the 1970s.

Mueller said Saif has given DiLorenzo "20,000 pages over the past year. We are absolutely not withholding anything he's asked for."

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Saif at the July hearing "will totally show how unfounded and unsubstantiated are the accusations that Cohen has made," Mueller said.

He said Cohen could have consulted him or the attorney general's office if he thought he was given an improper order about documents.

Instead, Mueller said, "when he finally releases them, he goes to a political operative who runs a smear campaign" against Saif, referring to DiLorenzo.

Mueller said it's "just a bit convenient" that the development comes as Saif opponents are running television ads urging voters to sign initiative petitions to put a measure on the November ballot that would abolish Saif.

DiLorenzo told reporters he is "not a consultant on the ballot measure" but has "had input" because of his interest in Saif. He claims Saif has surpluses in excess of its needs that should be returned to its policyholders.

The records battle is part of a long effort by competing insurers to get information about Saif's finances to determine whether it has more money than it needs.

The company has unsuccessfully argued that some records should be exempt from release because of information such as trade secrets that could benefit Saif's competitors. The courts said state law required disclosure.

Saif is Oregon largest workers' compensation insurer, covering more than half the state's employers. It is financed by employer-paid premiums and gets no tax money.

Copyright 2004 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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