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After series of scandals, Citizens Insurance president defends company before Cabinet

Citizens Property Insurance President Barry Gilway went before the Florida Cabinet on Tuesday to praise his team for steering the state-run company in the right direction.

The company—which has come under fire from Gov. Rick Scott and lawmakers for management troubles  and lavish spending after a series of Herald/Times articles—is hoping to repair its public image.

Gilway praised the company for beginning to shrink in size and reducing the level of risk. He also batted down criticism about the level of expenses and spending at Citizens, saying that the company’s expenditures are lower than most competitors.

Still, after criticism from Scott and others about corporate expenses on everything from alcohol to strippers, Gilway acknowledged that changes were going to be made.

Some Cabinet members were clearly disturbed by the history of scandal at Citizens:

“This isn’t a fraternity, these are professionals,” said Attorney General Pam Bondi. “What part of reasonable and appropriate (spending) did they not understand?”

Bondi wanted to know what Gilway was doing to discipline the employees who had abused the corporate card.

“I can only focus on what is going forward,” said Gilway, who joined the company last June.

The questions continued.

Scott: “How many people have corporate cards? Why do you have them?”

Bondi: “Many of these employees (with troubled spending histories) are current employees, correct?”

Gilway said they are conducting a study and looking at potentially making changes for the corporate cards (nearly one in five Citizens employees have them). He told Bondi that he didn’t think it was appropriate to discipline employees for what they had done before strict guidelines were in place.

After public outcry and criticism from Scott, Gilway said he would lower the company’s per diem to $36 per day for food. Before last year, executives had no limit on travel spending, and they often took advantage of that by spending freely on gourmet meals and beverages. In one case, a Citizens executive spent more than $40 for afternoon tea in London.

Finally, Gilway addressed the issue of salaries, stating that he gave out large pay increases to his top brass to help make them more competitive.

“The bottom line is, I am losing good people,” he said, saying that private insurers are cherry picking his employees and offering higher salaries.

Scott said a month ago that he was “outraged” by the large raises (which come as Citizens is hiking rates on struggling homeowners) and that the executives should give the money back.

On Tuesday, Scott did not ask Gilway to give back the salary increases.

The board of Citizens Property Insurance Corp. will meet on Friday to discuss several management issues.