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A Times Editorial

Drain the Citizens ethics swamp

Before four internal investigators were dismissed last month, it's now clear that the top echelon of Citizens Property Insurance Corp. — including its new president — were aware the quartet had compiled an extraordinary file on dysfunction at the state-run insurer. The details are far more salacious than the sanitized report released last week to the company's audit committee, and they are a damning counterpoint to president Barry Gilway's initial claim that the four employees of the Office of Corporate Integrity were terminated to make way for restructuring.

Gov. Rick Scott has called for an investigation by his own inspector general, the second in recent months. Scott and the Legislature need to follow the evidence wherever it leads and hold Citizens to account. The company must be run in the interest of Floridians, not its insiders.

It was bad enough learning earlier this year that the top leaders at Citizens — even as they were hatching plans to dump customers and raise premiums — felt entitled to treat themselves to lavish meals, car services and resort hotels while on official business.

Gilway, upon accepting the job in June, promised to put an end to all that. But in hindsight, he was apparently learning more about the lack of integrity within the company's ranks. The Office of Corporate Integrity had compiled a 73-page report highlighting an assortment of improprieties, most between 2008 and 2011. But before that report became public, the four were terminated in October and handed confidentiality agreements.

Last week, a sanitized, five-page version of the report was released to the company's three-person audit committee. But it wasn't until the Times/Herald Tallahassee bureau's Toluse Olorunnipa pieced together the details from other public records that the governor called for a second investigation by his inspector general. A subsequent Times/Herald article Wednesday exposed even further a working environment short on integrity. The improprieties included executives accused of misconduct receiving five-figure severance packages, a cover-up that the legal counsel was not a member of the Florida Bar and disparate treatment of human resources employees caught using company resources to run side businesses. One who ran a sex toy business was fired; the other was not, even though she had also removed her bra and danced on a table at an Ybor City bar during a company retreat.

All this from a company whose board has sought end runs around a legislative 10 percent cap on annual increases in hurricane premiums; voted to raid the company's reserves to bribe private insurers with $350 million in sweetheart loans to take policies out of Citizens; and launched reinspections of thousands of Florida homes, looking for any reason to eliminate mitigation discounts that homeowners get for hardening their homes against a storm.

These policy initiatives have been done with the implicit blessing of Scott, whose only proactive agenda with Citizens has been to support reducing its exposure in the event of hurricanes. But Scott's singular private-insurance-industry-friendly focus is misplaced. The company has a record $6 billion in reserves and Floridians are still struggling to find affordable property insurance — which remains an absolute necessity if the state's real estate market is to continue to rebound. The governor's and Legislature's first priority must be ensuring that this state-run company accepting hard-working Floridians' money is accountable and well-run.

Drain the Citizens ethics swamp 11/22/12 [Last modified: Thursday, November 22, 2012 3:30am]
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