Wednesday, November 23, 2005

Grand Jury Probes Citizens

Star reporter Paige St. John is reporting in Florida Today and other Gannett newspapers that a federal grand jury in Tallahassee has commenced a criminal investigation into Citizens Property Insurance and its officials.

Citizens is the state-owned property insurance company. It sells or oversees privatized insurance policies for windstorm coverage of structures in higher risk Florida areas, including Pensacola Beach.

Although the feds are mum about it, two claims adjusting firms told the reporter they have been subpoened to testify. St. John explains: "One of them alleges the state-run insurer allowed millions of dollars in adjusting work to be handed out by consultants, who steered the work to their own companies."

The whistle-blower is said to be Gary Perna, president of B & H Claims. Beginning in December, 2004, he apparently started sending e-mails to a growing list of just about everybody with any power over Citizens. The list is a Who's Who of Florida insurance regulators. It includes --
  • Citizens Executive Director Bob Ricker
  • Citizens corporate counsel Susanne Murphy
  • State Financial CEO Tom Gallagher, who is also running for governor
  • Florida's Insurance Consumer Advocate Steve Burgess, and
  • Gallagher's former top aide and legal counsel, Pete Dunbar.
So far as it appears, all of them ignored Perna. At least some responded with what might charitably be called dissembling answers.

"Management personnel working for Citizens have been hiring adjusters through their personal companies to work as claims adjusters for Citizens. This conflict of interest is overlooked by Citizens," Perna wrote in an e-mail to Hulsebusch that was forwarded to Ricker and Murphy.

When Perna turned down an invitation by Murphy to meet in person "to resolve any misunderstanding," Murphy responded in writing, telling him, "No Citizens employee owns an adjusting company."

By that time, Citizens officials had already told Hulsebusch, at the time a consultant put in charge of Citizens' floundering claims operation, to shed his ownership of a company that was also doing work for Citizens.

Invoice records show those employees, including a family member, stayed on with Citizens but under Quantum Claim Services, a Texas firm whose owner Hulsebusch put in charge of assigning hurricane claims.
Perna's warning messages were flowing freely a year ago when all the public knew was that their hurricane claims were being mishandled. Gallagher busied himself stroking upset hurricane victims but did nothing about the mess. Ricker was writing pompous and misleading op-ed articles for newspapers like the Pensacola News Journal while promoting Hulsebusch and showering him with salary raises.

"Someone really has to look at the management of Citizens," a January message from Perna pleads. "We have some compelling information."

Someone finally has: a federal prosecutor and grand jury.

Related Blog Articles

Citizens Exec Resigns Amid Corruption Allegations

Ethics Lesson - Updated

Independent Investigation Is Needed

Slapped In The Face -- Again

Tough Talk

Bull From the Pulpit

Ground Hog Day

Show Us Some Warmth


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Can anyone get an update on the class action lawsuit that is challeging the Mierzwa case. I believe it is in the First District Court of Appeals. When will it be heard and when do we get our money when we win? Thanks, Jerry Lazenby--Austin, TX.

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