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From the staff of the Tampa Bay Times

Scott to Citizens Insurance: I'm concerned about firing of corporate integrity unit

18

October

 Gov. Rick Scott told Citizens Property Insurance on Thursday that the recent decision to abruptly disband the Office of Corporate Integrity was concerning to him. As the Herald/Times reported on Tuesday, the state-run insurer fired its four corporate watchdogs abruptly last week, even though signs of corporate impropriety at the company are on the rise.

“While I understand your desire to reduce redundancy and create efficiencies within Citizens, such efficiencies cannot be achieve at the expense of accountability, transparency, and compliance,” Scott wrote in a letter to Citizens President, Barry Gilway. “To ensure that all safeguards are in place, I urge you to use greater caution with future modifications affecting internal investigations, audits and compliance.”

The Office of Corporate Integrity was responsible for handling office complaints such as internal corruption, sexual harassment or misuse of funds. After firing the four members of the unit, Citizens asked them to sign confidentiality agreements.

Citizens said it was eliminating the Office of Corporate Integrity in order to reduce redundancy and focus more specifically on forensic fraud detection.

In a damage-control press release issued Thursday, Citizens said press reports had “mischaracterized” the “realignment” of the company’s integrity efforts.

“We believe these changes strengthen our ability to ensure Citizens employees operate with the highest level of integrity,” said Citizens President Barry Gilway.

But Scott, in his letter, pointed out that Citizens had not hired any new investigators, meaning that there were fewer eyes watching what appears to be a growing problem of fraud, waste and abuse.

In August, Scott called his chief inspector general to investigate excessive and improper corporate spending by Citizens executives.

In August, a story in the Miami Herald and the Tampa Bay Times documented a pattern of lavish executive spending by Citizens’ executives, who regularly roomed at luxury hotels and dined on gourmet meals while pushing for painful insurance rate increases.

The story chronicled $600-per-night hotel stays, first-class flights to Bermuda and improper use of the company credit card for alcohol and haircuts.

Scott said he was concerned that the entire Office of Corporate Integrity was disbanded while the inspector general investigation into improper spending is ongoing.

“Your decision to disband the Office of Corporate Integrity while this investigation remains ongoing is troubling,” the governor wrote.

@ToluseO

[Last modified: Thursday, October 18, 2012 5:32pm]

    

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