Hunting and fishing trips taken by state officials and paid for by the state-run insurer of last resort, may have broken the law, according to a legislative audit report made public May 28.
The audit found that Louisiana Citizens Property Insurance Corp. picked up part of the cost for Chad Brown, deputy insurance commissioner; then-Insurance Commissioner Robert Wooley; and others to hunt at a club in Ville Platte.
Brown told the Legislative Auditor’s Office that the trips were “purely social” and that he was unaware Citizens was billed for them.
Wooley told the office that he took similar trips with the host, Chris Faser III, when Faser worked for the insurance department.
At the time of the trips cited in the audit, Faser was an independent insurance consultant.
According to the Legislative Auditor’s Office, Wooley, Brown and others may have violated state law by accepting gifts from Faser.
“I had no reason to believe that these trips were any different than those when we worked together,” Wooley, now an attorney for New Orleans-based law firm Adams and Reese, said in a written response to the audit.
The report recommends that Citizens management “discontinue reimbursing entertainment expenses, such as hunting or fishing trips.”
Efforts to contact the principals were unsuccessful on the Memorial Day holiday. But their responses were included in the auditor’s report.
Citizens new chief executive officer, J. John Wortman, agreed in a letter to the auditor’s office with the recommendations to bring “discipline to expense control, with proper documentation of expenses and contracts.”
The Legislative Auditor’s Office is looking at the operations of Citizens and the private association hired to run the quasi-state agency.
The Legislature created Citizens in 2003 to offer property insurance to homeowners and businesses unable to get coverage through the private market. Citizens hired Property Insurance Association of Louisiana, or PIAL, to run the day-to-day operations.
The legislative auditor found numerous examples of Citizens not having proper documentation on expenditures.
Earlier this year, auditors discovered that the taxpayer-guaranteed insurance company could not access its financial records because of longtime computer and accounting
According to the audit, PIAL hired Faser, owner of P&C Insurance Consulting, on April 1, 2004, for advice and consultation on regulatory matters and rate structures.
P&C was to receive $5,000 a month plus reasonable expenses for food, travel and lodging through March 31, 2005. P&C ended up receiving $192,336 from April 2004 to December 2006. About $102,000 of that was charged to Citizens without explanation of the costs or an extension of P&C’s contract, the audit states.
According to the audit, Faser’s work may have violated state law. Faser retired as a deputy commissioner of the state Department of Insurance in 2002. The Louisiana Board of Ethics determined – at Faser’s request before he entered into a contract with PIAL – that Faser could not assist in matters involving the insurance department’s property and casualty division for two years after leaving state government.
Faser told the Legislative Auditor’s Office that he did not remember the ethics opinion and that 90 percent of the work he performed was for PIAL and not related to Citizens.
P&C’s expenses included $7,043 for eight hunting trips at the Bon Amis Hunting Club in Ville Platte, the audit states. PIAL charged Citizens $3,522 for the trips.
Faser told the Legislative Auditor’s Office that his “usual guests” were Brown; Wooley; Steven Ruiz, a PIAL board member and Louisiana Insurance Rating Commission member; Kip Wall, then CEO of the Office of Group Benefits; and the late Steve Cavanaugh with the Louisiana Workers Compensation Corp.
P&C also charged $1,020 for an October 2004 fishing trip to Venice with Ruiz and other rating commission members. The reimbursement included $170 for food and alcohol from Winn-Dixie.
Brown told the Legislative Auditor’s Office that the hunting trips should not have been submitted for reimbursement. He showed the auditor’s office personal banking records that indicate he paid Faser $370 on May 3, 2005. Brown said he also may have given Faser cash for the trips.
Wooley told the office that he did not pay Faser for any of the trips he attended. The other guests gave a similar response.
Information from: The Advocate, www.theadvocate.com
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