After series of scandals, Citizens moves to become more like a state agency

After a series of corporate scandals, Citizens Property Insurance Corp. is hoping to conduct itself less like a high-flying private insurance firm and more like a government agency.

Blasted by regulators, investigators and lawmakers for lavish spending on travel and meals and poorly negotiated contracts, Citizens has agreed to remake parts of its operation using government as a model.

The state-run insurer of 1.3 million policyholders announced Friday that it will begin to implement procurement policies and travel guidelines that mirror those used by other state agencies. The Office of Insurance Regulation rapped Citizens last month for de-emphasizing price negotiation as it gave out $604 million in contracts to private companies. As a quasi-governmental entity, Citizens has operated under separate rules from most of Florida's government.

Also on Friday, Gov. Rick Scott’s chief inspector general released a final report on the company’s spending on travel and meals. As part of the report, Citizens agreed to adopt travel policies that “more closely mirror” those that govern state employees.

 “Citizens is aggressively looking for ways to tighten its financial belt,” said Citizens President/CEO and Executive Director Barry Gilway, in a statement.

Citizens has long insisted that it is not a government agency and should not be held to state limits on travel and food spending. Auditors have questioned Citizens’ rationale for this position since 2006, but the company ignored those concerns. Last year, the Herald/Times documented how Citizens’ loosely defined travel policies have allowed executives to charge the company hundreds of thousands of dollars for luxury hotel stays, limousine rides and expensive dinners.

As late as December, Citizens executives were arguing that the company—which received $715 million from taxpayers, has the ability to levy “hurricane taxes,” and claims governmental immunity in court—was not bound to rules governing state agencies. After Scott’s inspector general drafted a scathing report, Citizens agreed to follow the state’s travel rules, which would ban many of the luxurious expenses company execs have become accustomed to.

Some of the expenses flagged by reporters and inspectors include:

- More than $1,000 for a limousine ride and personal chauffeurs/car service for Citizens’ interim president and CFO.

-$236 for six-hour “day-use” of a hotel in Zurich, Switzerland, for the company CFO.

-$454,000 for “car expenses” between January and August 2012.

-$539 per night hotel stay in New York for top officials

The company offered explanations for many of the expenditures in a response to the inspector general report but agreed that stricter policies were necessary.

Meanwhile, the company has pushed to raise rates on homeowners and slash their coverage.

Citizens has also faced scrutiny over allegations of misconduct among its top executives, some of who later resigned and got large severance packages.

After Herald/Times stories about Citizens move to fire four investigators who were looking into the allegations, Scott called on his inspector to probe the company again.

That probe is ongoing, but some lawmakers are already pushing for more scrutiny.

Bills filed in the Legislature and backed by Scott would define Citizens as a state agency for the purposes of having an independent Inspector General. Citizens is supporting the proposal.

“According to reports in The Miami Herald late last year, an internal audit brought to light issues at this company charged with being stewards of public funds,” said David Richardson, D-Miami Beach. “The firing of four auditors who were responsible for reporting these indiscretions and completely disbanding the Office of Corporate Integrity has led me to believe that officials at Citizens may think they can operate without accountability, which I find appalling.”

@ToluseO

Government Inc.: Cashing in on contracts grows faster than the oversight

Even for Tallahassee standards, the scene was notable: lobbyist Brian Ballard dining with a nursing home executive, Gov. Rick Scott and a top aide at a pricey restaurant just blocks from the Capitol.

That Ballard’s clout could command a private dinner with the governor for a client speaks to the influential lobbyist’s fundraising finesse.

But equally important, and less celebrated, is Ballard’s talent for helping his clients land lucrative state contracts: $938 million this year alone, according to a Herald/Times analysis of contracts in the $70 billion state budget.

“Is that all?’’ joked Ballard, who said he had never added it up. “A big part of my business is protecting contracts, and outsourcing. Outsourcing saves [the state] money.”

Ballard is not alone. The lobbying offices that line the moss-covered streets of Tallahassee have grown exponentially larger in the past two decades as governors and legislators have steered a greater share of the state’s budget to outside vendors.

No one is keeping track of the total, but Chief Financial Officer Jeff Atwater last year estimated the total contract expenditure for Florida’s 2011-12 budget cycle at $50.4 billon — 72 percent of the budget. The bulk of it, nearly $42 billion, was for healthcare contracts and service sector grants that often are never competitively bid. Read more here.

Read more here: http://www.miamiherald.com/2013/02/09/v-fullstory/3226029/cashing-in-on-state-contracts.html#storylink=cpy

Dolphins get unanimous support for stadium tax deal in first Senate hearing

The Miami Dolphins started off the legislative season 1-and-0 in their attempt to get lawmakers to approve a multi-million dollar deal to upgrade its 25-year-old stadium.

Lawmakers in the Florida Senate Commerce Committee gave unanimous support to a bill that would clear the way for higher hotel bed taxes and a new sales tax rebate to help fund a $400 million renovation of the Fins’ digs.

The bill, sponsored by Sen. Oscar Braynon, D-Miami Gardens, has cleared its first hurdle, but it still faces an uphill climb. There will be several more committee stops and the bill also has to clear the Florida House, where Braynon acknowledged that there’s still some heavy lifting to do.

“In the Senate, I don’t think that we’re going to have as many problems as we’re going to have in the House,” he said.

The bill would allow the Dolphins to collect an annual $3 million in sales tax rebates from the state for 30 years, as well as millions more in new bed taxes.

Several stakeholders came up to Tallahassee to support the bill at its first committee hearing, including Miami Gardens mayor Oliver Gilbert,  SunLife stadium CEO Mike Dee and Miami-Dade Chamber of Commerce President Bill Diggs.

All supporters pitched the same message: This tax deal is a smart economic move for the state, and would lead to Super Bowls, college championships and other major tourism events. 

Fla. House Republicans release football-themed "Jobs Playbook"

Florida House Republicans are taking some inspiration from the Super Bowl to produce their plan for creating jobs in the state. The plan, called the “Jobs Playbook,” features many of the trademark GOP proposals—lower taxes, less debt and some old-fashioned bashing of the federal government to boot.

A football-themed infographic pits House Republicans’ strategy for winning up against the policies of the federal government—“higher debt, more deficits, economic uncertainty.” The release states, “Republicans have the playbook for economic success.”

This year, jobs and economic development have not played a starting role in legislative rhetoric, as in years past. Instead, legislative leaders are huddling up for some internal soul searching, hoping to clean up many of the problems created by the Legislature and the political class—ethics loopholes, campaign finance issues, elections problems, etc. Education and federal health reform are also top issues the Legislature must tackle.

Looking to show that job-creation has not been sidelined, lawmakers are pitching a playbook for economic development.

“Republicans have the playbook for economic success and we are dedicated to getting Florida over the goal line,” said House Majority Leader Steve Precourt, R-Orlando, in a statement.

House Speaker Will Weatherford, a former college football player, is quarterbacking the Florida House’s Republican majority as it prepares to take on a growing and more confident Democratic caucus with a very different playbook.

Despite boasts of an improving economy, the jury is still out on whether policies listed in the report and pushed by Florida lawmakers are the best way to boost the state’s economy.

Gov. Rick Scott proposes $74.2 billion budget

Gov. Rick Scott on Thursday unveiled details of a $74.2 billion budget proposal — the largest in Florida history.

Scott, who is seeking re-election in 2014, proposes to increase spending statewide by $4 billion, including $1.25 billion more for education. Much of that would cover a $2,500 teacher pay raise and a pension fund contribution that won’t be felt in classrooms.

“It’s the right thing to do for our children,” Scott said of his spending plan as he stood at a lectern adorned with his budget logo, “Florida Families First.”

As a candidate in 2010, Scott campaigned on a promise to shrink government, and his first budget in 2011 cut school spending by $1.3 billion. But his spending plan contains one of the biggest one-year increases in spending in Florida history.

Follow the developing story here.

House Democratic leader blasts decade of GOP governance, pushes for Medicaid expansion

Rep. Perry Thurston, the House Democratic leader, said voters in Florida are not impressed with Republican-led governance, and said even GOP leaders are beginning to feel the same way.

In a 30-minute talk that covered issues ranging from Florida’s elections debacle to implementing federal healthcare to investing in education, Thurston blamed his Republican counterparts for problems facing the state. He said reform efforts currently being pushed by Republican officials—election reform, ethics reform, education financing, healthcare implementation—all seek to deal with problems caused by the GOP-led Legislature.

Thurston said the ruling party had been “foot dragging” when it comes to implementing the federal healthcare reform. He pointed to a letter from former House Speaker Dean Cannon in 2010 that effectively kept state agencies from planning for reform. The state is now trying to figure out how to conform to the law and facing several deadlines. The decision about whether or not to expand Medicaid is a critical one for the state, and Thurston supports the expansion.

 “We’re going to save lives.  We’re not talking about turning down money fro a rail system; we’re talking about saving lives,” said Thurston. “Not to do this would be morally reprehensible.”

Anti-Castro bill would ban medical licenses for American doctors trained in Cuba

Two South Florida lawmakers are pushing for a law that would stop American doctors who studied in Cuba from receiving medical licenses in Florida.

Rep. Manny Diaz Jr., and Sen. Rene Garcia, both Hialeah Republicans, filed bills last week, seeking to clamp down on U.S. medical students who go to Cuba for training.

“U.S students who turn a blind eye to basic human and civil rights abuses in Cuba do not possess the moral clarity to serve patients in Florida” said Diaz in a statement. “The Fidel Castro medical scholarship program is purely a propaganda tool. Hopefully this legislation will stop American citizens from participating in Cuba’s medical apartheid system.”

The Cuban government offers a free medical training program that has drawn in thousands of students from around the world, including many from the United States.

If the bill pushed by Diaz and Garcia passes, any American student who goes to Cuba for training will not be able to get a medical license to practice in Florida.

The ban would not apply to those who trained in Cuba prior to coming to the U.S. According to Diaz’s press release it would only apply to “those who willingly go to Cuba to be used as propaganda tools by the Cuban government.”

Last year, Garcia pushed a bill that would prevent local governments from contracting with firms that had Cuban branches. Gov. Rick Scott signed the bill, but also said it could not be enforced, sparking backlash in the Cuban exile community in Miami. The measure led to a federal lawsuit and is tied up in court. 

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Bondi, lawmakers take on state's surging foreclosure problem

Lawmakers in Tallahassee are renewing their focus on Florida’s foreclosure problem, after the state ended 2012 as America’s foreclosure capital.

Attorney General Pam Bondi, Senate President Don Gaetz and House Speaker Will Weatherford held a press conference Thursday to discuss a newly approved $60 million program for housing aid.

The program—which includes money for homebuyer assistance, legal aid and foreclosure prevention—is part of last year’s multibillion dollar national settlement that included cash payments to states.

Bondi reached a deal with Weatherford and Gaetz after an initial disagreement over who had authority over the $334 million in funds allocated to Florida. In the end, the groups compromised to allow the Legislature to direct the money during the 2013 legislative session, with $60 million carved out for release prior to the session.

Bondi’s office organized a press conference Thursday to discuss the details of the $60 million program. The deal includes:

• --$35 million for Down Payment Assistance (Florida Housing Finance Corporation)
• --$10 million for Foreclosure Counseling (Florida Housing Finance Corporation)
• --$5 million for Reducing the Foreclosure Backlog  (State Courts System)
• --$5 million for Legal Aid (Various providers)
• --$5 million for Attorney General’s Legal Fees (Attorney General’s Office)

Transparency developers say Senate leaders had access to site for more than a year

It remains one of the most perplexing questions surrounding the tug of war over the Senate's now-defunct Transparency 2.0 web site: Why would Senate leaders pay $5 million for a budget transparency web site for members but let it sit idle for more than a year until the contract expired?

Now, a letter from the developers of the web site to Senate President Don Gaetz reveals that user names and logins were provided to 58 Senate members and staff in 2011, including Gaetz himself. It doesn't answer the question but sheds some light on the he-said/she-said nature of this kerfuffle.  Download Mattson Response to Senator Gaetz

Gaetz told the Herald/Times in December that he had no recollection of ever getting a log-in for the web site that was set up under previous Senate President Mike Haridopolos to offer unprecedented access to state budget documents and accounting. He said he was underwhelmed by the performance of the web site, when he saw it demonstrated, and disappointed in its cost.

"I was a senator a year ago,'' Gaetz said. "I don’t remember anybody ever saying: ‘here’s your access code.’ I’ve asked for a list of all those who used the data and how often they used it so I could get a sense of the utility.”

The company, Spider Data Systems, provided Gaetz with the list of users earlier this month. It not only includes Gaetz but five other Senate leaders, including Sens. John Thrasher, Andy Gardiner, JD Alexander, Lizbeth Benacquisto and former Senate President Mike Haridopolos. So, why didn't the Senate use this high-priced tool?

Big bill—and maybe higher rates—coming soon on Citizens Property Insurance

A massive, multipronged bill to reform Florida’s property insurance market could be introduced soon in the Florida Legislature, as influential committee chairs are determined to shrink Citizens Insurance and stave off potential “hurricane taxes.”

Sen. David Simmons, R-Altamonte Springs, said the Florida Senate and House will work on a major bill to fix the state’s property insurance market, encompassing several controversial ideas while trying not to cause “rate-shock.”

“We’re not going to pull the needle out of the arm of South Florida in one year,” he said. “We’re talking about being able to in fact provide a viable alternative to doing nothing. And that’s critical to us.” 

The statement came after the Senate Insurance and Banking Committee heard testimony from a number of pro-business groups, state officials and other stakeholders. Most groups had a similar message: rates at Citizens are too low and are keeping the private market from expanding. 

The bill to be introduced by the committee would likely encompass a number of different measures, including raising rates faster, shrinking the state’s Hurricane Catastrophe Fund and creating stricter requirements for homeowners seeking coverage from Citizens.