Make us your home page
Instagram

Fired investigators uncovered evidence of misconduct at Citizens' top levels

TALLAHASSEE — 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.

The investigation by the now-terminated employees found that, among other things, Citizens:

• Gave large severance packages to some top employees accused of misconduct, including more than $80,000 to an underwriting executive who resigned after being accused of "inappropriate behavior" with another employee.

• Gave only a warning to its deputy director of human resources after she got drunk at the Coyote Ugly bar in Ybor City, removed her bra and danced on top of a table during a company retreat.

• Failed to complete certain investigations or did not file them into the official complaint system, potentially shielding them from public view. Certain employees were shown favoritism after they were discovered breaking company policy.

Citizens declined to respond to several followup questions about the various allegations, stating that more public records would be released on Monday.

The state-run insurer disbanded its Office of Corporate Integrity abruptly in October, terminating all four members and presenting them with confidentiality agreements. The move sparked rebuke from outside groups, state lawmakers and Gov. Rick Scott.

The reports of corporate excess and impropriety come at a time when Citizens is raising insurance rates on homeowners and slashing coverage in order to reduce risk on the 1.4 million policies it insures.

Citizens said the move to terminate the four investigators — T.W. Smart, Selisa Daniel, Melanie Yopp and Meghan Walker — was actually a restructuring effort aimed at beefing up its fraud detection system and "avoiding unnecessary redundancies." The company is currently looking to hire new fraud detectors.

The report reviewed Friday is the first evidence of what the Citizens investigators were doing shortly before they were told their services were no longer needed.

In March, an anonymous tipster complained that Citizens had mishandled internal investigations, spent funds on improper severance agreements and shown favoritism to certain employees engaged in misconduct. The accusations implicated some of the highest-ranking executives at the multibillion-dollar insurer.

OCI, which was led by a former economic crimes investigator and an agent with the Florida Department of Law Enforcement, was brought in to investigate.

A five-page report issued by Martins summarizes the findings of OCI's inquiry in broad terms, omitting many specific details.

Though members of the Office of Corporate Integrity spent months conducting the investigation, their names are not listed on the final report. Martins, whose name is on the report, played a major role in dismantling the OCI.

Internal emails at Citizens indicate that Martins' final report was not as comprehensive as the report drafted by OCI before it was disbanded. It is unclear what information gathered by OCI was left out of Martins' report.

"It looks like the Integrity Office investigation is being swept under the rug," said Dan Krassner, executive director of Integrity Florida, which advocates for tougher ethics laws. "Citizens gagged their now-terminated watchdogs with confidentiality agreements, so the public is still just hearing one side of the story."

While Martins' report does not name any of the employees involved in the allegations, other reports reveal the names of several top officials involved in various improprieties. Some have since resigned.

A few examples:

• Susanne Murphy, Citizens' chief administration officer, was accused of practicing law without being licensed in Florida. While one report indicated some accusations against her were "unsubstantiated," she resigned abruptly in August.

• Citizens' director of human resources, Gena Buonamici, and general counsel Dan Sumner both led departments accused of showing favoritism to employees within their units. Both are still with the company.

• Citizens' former director of underwriting was accused of getting drunk during a Key West business retreat and sexually harassing a co-worker. He resigned abruptly, days before he was to be questioned by OCI. It is not clear whether the employee, who was paid $145,000 annually, received a severance package.

The news of large severance payments to departing employees comes as Citizens has a record $6 billion on hand due to Florida's seven-year streak of no hurricanes. The company is under investigation for using corporate cash to fund lavish business trips for executives, including $600-a-night hotel stays.

Citizens also is facing scrutiny as it considers shifting $350 million to private companies in the form of low-interest loans.

The improprieties announced Friday add to the swirl of controversy engulfing the state-run insurer of last resort.

"Legislators may want to consider oversight changes for Citizens beyond the rubber stamp board (of directors), to hold them accountable," said Krassner.

Fired investigators uncovered evidence of misconduct at Citizens' top levels 11/16/12 [Last modified: Tuesday, November 20, 2012 11:00am]
Photo reprints | Article reprints

© 2017 Tampa Bay Times

    

Join the discussion: Click to view comments, add yours

Loading...
  1. Federal agencies demand records from SeaWorld theme park

    Tourism

    ORLANDO — Two federal agencies are reportedly demanding financial records from SeaWorld.

    Killer whales Ikaika and Corky participate in behaviors commonly done in the wild during SeaWorld's Killer Whale educational presentation in this photo from Jan. 9. SeaWorld has been subpoenaed by two federal agencies for comments that executives and the company made in August 2014 about the impact from the "Blackfish" documentary. 
[Nelvin C. Cepeda/San Diego Union-Tribune/TNS]
  2. Legalized medical marijuana signed into law by Rick Scott

    State Roundup

    TALLAHASSEE — Gov. Rick Scott on Friday signed into law a broader medical marijuana system for the state, following through on a promise he made earlier this month.

    Gov. Rick Scott signed legislation on Friday that legalizes medical marijuana in Florida.
  3. Line of moms welcome Once Upon A Child to Carrollwood

    Business

    CARROLLWOOD — Strollers of all shapes and sizes are lined up in front of the store, and inside, there are racks of children's clothing in every color of the rainbow.

    At Once Upon A Child, you often as many baby strollers outside as you find baby furniture and accessories. It recently opened this location in Carrollwood. Photo by Danielle Hauser
  4. Pastries N Chaat brings North India cuisine to North Tampa

    Business

    TAMPA — Pastries N Chaat, a new restaurant offering Indian street food, opened this week near the University of South Florida.

    The menu at Pastries N Chaat includes a large variety of Biriyani, an entree owners say is beloved by millions. Photo courtesy of Pastries N Chaat.
  5. 'Garbage juice' seen as threat to drinking water in Florida Panhandle county

    Water

    To Waste Management, the nation's largest handler of garbage, the liquid that winds up at the bottom of a landfill is called "leachate," and it can safely be disposed of in a well that's 4,200 feet deep.

    Three samples that were displayed by Jackson County NAACP President Ronstance Pittman at a public meeting on Waste Management's deep well injection proposal. The sample on the left is full of leachate from the Jackson County landfill, the stuff that would be injected into the well. The sample on the right shows leachate after it's been treated at a wastewater treatment plant. The one in the middle is tap water.