PROVIDENCE — With his labor director, Adelita Orefice, facing an almost certain no-confidence vote by a Senate committee, Governor Carcieri withdrew her nomination, at the last possible moment yesterday, and blamed AFL-CIO secretary-treasurer George Nee specifically for exacting revenge for Orefice’s role in “exposing illegal activities” at the Beacon Mutual Insurance Company.

In a letter delivered to Senate leaders moments before Orefice’s reconfirmation hearing was to begin, Carcieri said he was withdrawing her nomination because of “the extraordinarily time-consuming and rancorous circumstances surrounding the debate on the current budget.”

“I believe Adelita Orefice is an extremely capable and hard-working public servant who deserves more time and opportunity to present herself, her credentials and her references to the Senate than will be afforded to her in the rush of finalizing legislation and the budget prior to the close of the fiscal year,” he wrote.

But, a news release that went out simultaneously carried this headline: “Governor Says Nominee To Be Voted Down By Senate As Political Retaliation. Orefice Being Punished For Role As Whistleblower In Beacon Mutual Case.”

Carcieri specifically blamed Nee, who he tried unsuccessfully to remove from the board of the state’s dominant workers’ compensation insurer, for having “convinced Senate leadership” to vote her down.

Added Orefice: “Honestly, this is like playground politics. When you scrap it up with the bully, they’ve got to pay you out to teach everybody else a lesson, so honestly I am not surprised by this.”

Nee readily acknowledged his disdain for Orefice.

Why? “Because I think she has been a very poor director of the Department of Labor and Training. I’ve dealt with directors since 1976. They’ve come from the business community. They’ve come from the labor community and they’ve come for governmental service and I would say she’s been the worst,” he said.

He cited a number of concerns, including what he called the “pathetic” enforcement of prevailing wage laws, her attempt to strip legislative grant money from the Institute for Labor Studies and Research, and her department’s use of state prisoners to transport documents with Social Security numbers, that were inadvertently dumped at the state landfill, back to her department for shredding.

Asked if his efforts to scuttle her nomination were payback for Orefice’s role in bringing problems at Beacon to light, he said: “Absolutely not.”

“Beacon is behind us. The statements in the governor’s press release are not even worthy of comment. He’s gotten to the point of being irrelevant and pathetic,” Nee said.

In response to the assaults, Orefice cited her department’s 2005 success in winning what she called the “largest prevailing wage recovery in history”: a $421,000 payment by DBI Inc. in Johnston, on behalf of 13 workers. On her watch, she said the department had also “reduced backlogs of labor standards cases … moved unemployment insurance payments to electronic benefit cards…. I am being paid back for what I did with Beacon.”

For all the sound and fury, the withdrawal of Orefice’s nomination will have little practical effect. According to the governor’s office, she can continue to serve until she — or a replacement — is confirmed by the Senate.

Orefice, 42, first joined Carcieri’s cabinet in 2003 as director of the Department of Elderly Affairs. Her shift over to the labor department a year later more closely matched her background, which included nearly eight years in a variety of positions at the U.S. Department of Labor, first in Washington, D.C., and, for the final two years, in Boston, where she was an investigator in pension and welfare benefits administration.

The state DLT is responsible for an array of job and job-training programs, and also oversees work-force protection programs, including unemployment insurance, temporary disability insurance and workers’ compensation.

Carcieri’s news release blasting Nee for exacting “revenge” over the Beacon Mutual affair reignited the war of words between Carcieri and Nee.

Carcieri last year tried unsuccessfully to oust Nee and another labor-backed Democrat on the Beacon board, former state Rep. Henry Boeniger, a lobbyist-government relations director for the National Education Association.

The fight ended in what some said was a backroom deal between the unions and the Republican governor. Nee and Boeniger, who both were appointed by previous governors, remained on the board until their terms expired, last November. Two months later, they were replaced with two other labor-backed Democrats: Raymond C. Coia and Michael J. Ruggieri. Coia, a lawyer, is president of the Laborers’ International Union of America, Local 271. Ruggieri, a former ironworker, is president of the Rhode Island Building & Construction Trades Council. Carcieri drew attention to Orefice’s role in bringing to his attention the findings of a confidential audit, commissioned by Beacon board members, that delved into allegations the company was “providing unfairly discounted insurance rates to individuals and companies with connections to its Board of Directors.”

In February of last year, the governor released a letter in which Orefice — then a member of Beacon’s internal audit committee — alerted him to an internal investigation by Beacon into a “serious ethical and management issue.”

At the time, Beacon was trying to win approval for a bill in the General Assembly which would lessen regulatory oversight of its pricing practices.

Orefice said in her letter that she was “very concerned” that the company’s president, then Joseph A. Solomon, and the board “may try to delay taking action” on the issue under investigation because it could derail passage of the Beacon bill. (Solomon was subsequently fired for cause.)

What followed was a more extensive review by former New York Mayor Rudy Giuliani’s company that painted a damning portrait of Rhode Island’s dominant workers’ compensation insurer, a nonprofit company created by the state legislature in the early 1990s to provide insurance at the “lowest possible price” to the state’s businesses for the care of sick or injured workers.

The governor yesterday alleged that: “union leaders serving on the board of directors were providing unfairly discounted insurance rates to politically-connected companies.” The review by Giuliani Security & Safety didn’t go that far.

It concluded that Beacon had given preferential rates to some companies and maintained “inappropriate relationships” with certain insurance agents. It also recommended numerous reforms, but did not address whether changes were needed on the board or in senior management.

The only board member specifically named in the report in connection with the “preferential rates” was the former board chairman, Sheldon S. Sollosy. Sollosy resigned the day the governor released the internal audit.

Nonetheless, Carcieri said: “Unfortunately, the people responsible for the corruption at Beacon Mutual are using this confirmation vote to exact revenge.” (Clarifying his remarks later, spokesman Jeff Neal said Nee and Boeinger “either knew about what was going on at Beacon Mutual and were complicit … or didn’t know and were incompetent.”)

Nee’s response: “There is nothing that has ever been reported — nothing in the Giuliani report — that has even suggested that. ... To me that’s a slanderous, irresponsible, childish statement.”

larditi@projo.com