Sen. Fasano and watchdog groups call for expanded investigation into Citizens Property Insurance Corp.

"This government corporation needs a thorough review of its management practices and policies by the governor's chief inspector general," Krassner continued on a conference call from Tallahassee this morning.


Today, New Port Richey state Sen. Mike Fasano sent a letter to Gov. Scott writing that he was "shocked" by the firings "because it does little to shed light on how the people who took the trips and meals were allowed to do so without the scrutiny that quasi-governmental officials should have been given."


The Tampa Bay Times / Miami Herald reported that Citizens had a "52-percent increase in internal complaints" and "is being investigated for lavish executive spending and other corporate improprieties," another reason why the advocates say the firings are suspect.


Claims of improprieties began in March after an anonymous letter was sent to the board of directors stating that the corporation's employees spent more than $500,000 on beverages, and millions of dollars on expensive furniture and illegal no-bid contracts.


Citizens' Office of the Internal Audit investigated the claims and found that although some of the allegations were true, others could not be immediately proved. Reportedly no staff members were interviewed in that preliminary investigation.


However, controversy continued.


Last month, Citizens' board approved a plan to loan $350 million from its $6.2 billion surplus to private insurers — under very generous terms — to incentivize the companies to take over some of the state's policies. That move has been questioned by a number of state legislators including incoming House Speaker Will Weatherford.


"It's very concerning to me. It should be to every legislator, to every cabinet member, that Citizens is now doing away with the Office of Integrity, if for no other reason, perception is everything," Sen. Fasano said (Fasano is being term-limited out of the Senate but is running for a state House seat).


Fasano asked why "not one board member, not one board member of Citizens questioned it?"


Below is Krassner and Shaw's letter to Gov. Scott:


October 22, 2012
Honorable Rick Scott Governor
The Capitol
Tallahassee, Florida 32399
Dear Governor Scott:


We are concerned about the lack of oversight and accountability at Citizens Property Insurance Corporation.


Last week, we learned that Barry Gilway, President of Citizens, terminated every employee within the Office of Corporate Integrity. As you know, these firings came on the heels of reports of lavish, non-mission critical spending. Abusing travel expenditures is unacceptable, but gutting the watchdog inside of the so-called people’s insurer of last resort is incomprehensible. We find it especially troubling that the terminated employees were asked to sign confidentiality agreements. It certainly gives a perception of corruption.


We appreciate your public concern and your request that Florida’s Chief Inspector General scrutinize the wasteful travel expenditures. However, we are asking you today to expand the focus of the Chief Inspector General’s ongoing investigation to review the disbandment of the Office of Corporate Integrity.
Floridians deserve a closer look at Citizen’s accountability, ethics, transparency, and compliance. As consumer advocate and government watchdog coalitions, we can only scrutinize and protect policyholders and taxpayers with publicly available information. We rely on internal watchdogs, inspectors, investigators, auditors, and a transparent process to prevent corrupt use of public money and to safeguard the integrity of the public sector.


Taxpayers and policyholders deserve accountability. Thank you for your consideration of our request. Sincerely,


Dan Krassner Executive Director Integrity Florida
Sean Shaw
Founder
Policyholders of Florida
Cc: Barry Gilway, President of Citizens Property Insurance Corporation Melinda Miguel, Chief Inspector General

Earlier this month, Citizens Property Insurance Corp. dumped four of its Office of Corporate Integrity members, claiming the action was to reduce redundancy and beef up its fraud investigation unit.

The incident coincided with state inspector general Melinda Miguel's investigation of Citizens' alleged lavish executive spending, which prompted officials with two consumer advocacy groups to call on Gov. Rick Scott to expand the inspector general's research into the company's actions.

"We see these moves by Citizens as making government in Florida less responsive, less accountable, and this could potentially increase the state of Florida's corruption risk on national and international integrity rankings," said Dan Krassner, executive director of the nascent good-government group Integrity Florida.

This morning, Krassner and Sean Shaw — the founder of Policyholders of Florida — penned a letter to Gov. Scott asking him to allow Miguel to expand her investigation by looking into the termination of the four members, as well as why they were required to sign confidentiality agreements at the time of their departure.

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