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As Poe companies were sinking, leaders fed campaigns

TALLAHASSEE — As Poe insurance companies sank toward insolvency after two record hurricane seasons, Poe family members and managers were not just collecting hefty payments, they were also flexing their political muscle.

Poe board members and family members gave more than $65,000 to state political candidates during the 2006 election cycle, even as their companies' bottom line plummeted.

About $38,000 went to the Republican Party of Florida and $6,500 to the Florida Democratic Party.

About the same time, Poe was paying its own managers and family members more than $100-million in dividends, according to a lawsuit filed Tuesday by the Florida Department of Financial Services.

Hurricanes from the 2004 and 2005 storm seasons saddled Poe companies with more than $2.5-billion in damage claims.

The state assumed control of the companies in May 2006, eventually liquidating Poe affiliates Atlantic Preferred, Florida Preferred and Southern Family as part of the largest insurance insolvency in Florida history.

Now, all Florida insurance customers are footing the bill through recurring assessments to cover nearly $800-million in Poe's debts.

Public records show even as Poe was going under, its leaders, including former Tampa Mayor Bill Poe Sr., were still politically active.

Poe managers bundled at least $6,500 in direct campaign contributions to former Chief Financial Officer Tom Gallagher, a failed candidate for governor, all on the same day, June 20, 2005.

As the state's then-chief financial officer, Gallagher was instrumental in 2006 in making sure Poe's insurance policies got transferred smoothly to Citizens Property Insurance Corp.

Poe managers also gave nearly $3,000 to Senate president Tom Lee, then a candidate for CFO. Poe unsuccessfully lobbied Lee in spring 2006 for a state loan to keep it solvent.

Poe affiliates also gave money to several who would have a say in its future: $1,500 to Charlie Crist's bid for governor and $3,000 to Alex Sink's CFO campaign.

Sink's office now controls Poe's fate and filed Tuesday's lawsuit. She said she wants to use any recovered money to lessen the burden that insurance consumers have paid in Poe's leftover bills.

The financial investigation into Poe's bank accounts started late under Gallagher's administration and continued on for more than a year under Sink's administration, said CFO spokeswoman Tara Klimek.

"We're alleging those officers and directors should have known the company was insolvent or on bad financial grounds," Klimek said.

On Wednesday, Bill Poe Sr. said in a statement that his lawyers are reviewing allegations made in the lawsuit, but called it a matter of "lawyers fighting lawyers." He said the state's lawsuit was in retaliation for a lawsuit Poe has filed against the state-run insurer Citizens. The Poe companies contend they are owed the commissions made by Citizens insurance agents on policies that had been Poe's.

"Until this is resolved there is nothing more to say while these cases are pending," Bill Poe Sr. said in the statement.

As Poe companies were sinking, leaders fed campaigns 04/02/08 [Last modified: Wednesday, April 9, 2008 5:42pm]
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