Gov. Rick Scott is calling for a new investigation into Citizens Property Insurance, after the Herald/Times Tallahassee Bureau reported that the organization had mishandled investigations, shown favoritism and handed out big severance checks to top-level executives accused of misconduct.
"The people of Florida are entitled to accountability and transparency within every aspect of our government," Scott wrote in a letter to his Chief Inspector General. "Accountability and transparency require an adequate number of independent, highly trained professionals. My administration will not tolerate any action taken to undermine these safeguards."
On Friday, the Herald/Times reported that Citizens had fired four corporate watchdogs who had been investigating misconduct by high-level executives. Citizens said it terminated the employees as part of a restructuring.
Scott said that he was concerned by the new revelations and would like his top inspector to take a look and see if "corrective action" was needed. It's the second time this year Scott has asked for an investigation into Citizens after a Herald/Times article. In September, Scott asked his inspector to look into reports of lavish corporate spending on travel and meals by executives.
In opinion pieces that ran in several Florida newspapers over the past month, Sean Shaw, of Policyholders of Florida and Dan Krassner, director of watchdog group Integrity Florida, called for Scott to investigate further.
Shaw welcomed the news that Scott had called for further investigation.
"This is great news, exactly what we wanted and what policyholders deserve. Without watchdogs on the inside, safe from retribution, it's impossible for consumers and consumer advocates to know exactly what is happening inside the people's insurer of last resort," he said.
From Friday's story:
The corporate watchdogs who were recently fired from Citizens Property Insurance Corp. had uncovered evidence of favoritism, improper compensation and poorly handled investigations at the highest levels of the state-run company.
A report reviewed Friday by Citizens’ Audit Committee shows that one of the final investigations conducted by Citizens’ Office of Corporate Integrity targeted top senior officials at the company. The four corporate watchdogs were investigating how Citizens had handled previous allegations of sexual harassment, drunken disrobing, irregular severance payments, falsified documents and other improprieties by employees.
All four investigators were given termination notices last month.
The report released Friday “focused on the mishandling of investigations, the mishandling of discipline and the mishandling of Citizens’ funds,” said Chief Internal Auditor Joe Martins, who recently decided that the Office of Corporate Integrity was no longer needed at Citizens.
Here's Scott's response:
Ms. Melinda Miguel
Chief Inspector General
Tallahassee, FL 32399
Dear Ms. Miguel:
On October 18, 2012, I stated in a letter to Barry Gilway, President of Citizens Property Insurance Corporation, that I was troubled by his decision to disband Citizens’ Office of Corporate Integrity and terminate its four employees. I explained that while I understood his stated desire to reduce redundancy and create efficiencies within Citizens, such efficiencies could not be achieved at the expense of accountability, transparency, and compliance. I urged Mr. Gilway to use greater caution with any future decisions affecting internal controls.
On Friday, a report released by Citizens’ Audit Committee revealed that shortly before their terminations, employees within the Office of Corporate Integrity were investigating allegations that Citizens had mismanaged internal investigations, applied disciplinary procedures inconsistently, and mishandled corporate funds. In light of this report, the timing of the firings raises new concerns. Given the appearance of impropriety, I request that you conduct a thorough review of the terminations to determine whether any of them were retaliatory in nature.
The people of Florida are entitled to accountability and transparency within every aspect of our government. Accountability and transparency require an adequate number of independent, highly trained professionals. My administration will not tolerate any action taken to undermine these safeguards. Your report will allow me to assess whether the taxpayer resources that support Citizens are properly protected and whether corrective action is needed to enhance compliance at Citizens.