What Gulf Coast Congressman Gene Taylor wanted the Easter Bunny to bring him.
South Mississippi Living 4/07

Tuesday, June 19, 2007

State Farm Paying Attorney Fee for Miss. Insurance Commissioner

State Farm Paying Attorney Fee for Miss. Insurance Commissioner

While I’ve been busy the last few weeks sanding baseboards and crown molding and painting ceilings for family members’ homes, Mississippi Deputy Insurance Commissioner David Lee Harrell was busy preparing for his deposition in one of the big insurance cases. The fee for his attorney? State Farm funded that.

Yes, you read that correctly.

State Farm is paying the attorney fee for the lawyer helping the Mississippi Deputy Insurance Commissioner prepare for his testimony under oath and representing him at the proceedings in one of the large lawsuits that Mississippi policy holders are bringing against . . . State Farm.

Can you believe it?! Talk about the fox guarding the hen house!! But this is really more like a criminal defense team paying the salary of the local prosecuting attorney assigned to its case. What a whopper of a conflict of interest. Here’s a guide to the deposition and links to the deposition itself.

The insurance commission claims that it got approval from the Attorney General and that there is some kind of law permitting this conflict of interest. I've seen horrifyingly disgusting relationships between regulators and those they are to regulate. Clearly, this example is quite troubling. The Insurance Transparency Project agrees.

It’s not as if the Mississippi Insurance Commission sent out a press release or held a press conference to inform the state’s good citizens of this obvious fox/hen house relationship.

The only reason that we even know about this unsavory tryst is because courageous policyholders, regular Jane and John Q. Citizens here in Katrina Land, have hired one of the sets of pit bull attorneys, the Scruggs Katrina Group, who is determined to ensure that the insurance companies make good on their legal obligations to these policyholders.

Praise God for trial lawyers!

Even Senate Republican Whip Trent Lott (MS), who also lost his family home in Katrina, has seen the light about the importance of a good trial lawyer. Bloomberg News wrote

“Lott, a longtime critic of trial lawyers, went to court with the aid of his brother-in-law, Richard Scruggs, who in 1998 wrested a $206 billion settlement out of the tobacco industry.”

Lott has also seen the light on the corruption of the insurance industry with which he had been so closely aligned for many decades. Bloomberg News reported

“"Lott says he is willing to work with the industry, though his words would seem to leave little room for compromise. ``These are venal people,'' he says."
I never thought I’d see the day when Trent Lott and I would agree on something of substance. Yet here we are. U.S. Senator Mary Landrieu, a good democrat from New Orleans, Louisiana, summed it up quite nicely. “Disasters make for strange bedfellows."

The online Merriam-Webster Dictionary defines ‘venal’ as “capable of being bought or obtained for money or other valuable consideration : PURCHASABLE; especially : open to corrupt influence and especially bribery : MERCENARY.” You know, like the Bush White House.

Now, let’s get this straight.

The Mississippi Insurance Commission licenses and regulates the practices of all insurance companies and agents. State Farm and its agents are among the companies that the Mississippi Insurance Commission, a state government agency, regulates. State Farm is paying the fees of the outside attorney that the government commission hired to help it prepare for testimony under oath in a lawsuit against State Farm. Well if that don’t beat all!

To top it all off, on Monday, June 11th, Mississippi Attorney General Jim Hood (another good Democrat) filed a lawsuit against State Farm for breach of contract. Apparently, State Farm did not live up to its legal obligations under the court sanctioned agreement. Does this sound familiar, this failure of a corporation to live up to its legal obligations?

Can we say . . . Enron? Halliburton?

Thankfully, Attorney General Hood is hauling State Farm back to court to ensure that the insurance company lives up to its responsibilities to Mississippi policyholders.

Attorney General Hood is “asking that $50 million be set aside to pay Coast policyholders for Katrina damage and an unspecified amount for damages they suffered because State Farm has breached its agreement. He also is seeking an unspecified amount of punitive damages, designed to deter bad behavior.

Good. That is the point of these kinds of lawsuits. First to make whole the parties who were injured. In this instance, that would be the citizens to whom State Farm refused to pay its obligations under the terms of their insurance policies.

The second point of these lawsuits is punishment. With big corporations like State Farm, Enron, and Halliburton, the only way to assist them in becoming good corporate citizens is to punish them in ways that they understand: depleting their profits.

Corporations are legal entities that are neither moral nor immoral. However, the men and women who run the corporations, those members of the boards of directors, they demonstrate their moral core—or lack thereof—through the policies they propose and implement. Their god is the Almighty Dollar. Eagerly, they bow down to the Almighty Dollar’s Altar of Greed.

In their pursuit of big boons from their god, Almighty Dollar, should we, our family members, our friends and neighbors, or our coworkers be hurt in the process, well, greed is their god and ruthlessness is their rapture. ruthlessness is their rapture. In our civil court system, paying money, taking away their scandalous profits made at our expense is the way to make these creatures pay for wronging us. Punitive damages is about punishing wrong doers so that we can protect the next person from being victimized.

This is what the Mississippi Attorney General is doing: protecting the citizens of the state against a major corporation that is victimizing its policyholders.

Dale, DINO, Lieberman
The Mississippi Insurance Commissioner, an elected officer just as the Attorney General also has this same obligation. Apparently, Mississippi’s Insurance Commissioner George Dale is a DINO, Democrat in Name Only. Mississippi’s Democratic Party Officials voted to prohibit Dale from running as a Democrat because he had supported Bush’s campaign in 2004.

Dale went to court over the Democratic leaders’ decision and hired “Greg Copeland, an attorney who is a longtime lobbyist for the insurance industry” to represent him. When asked about it, Dale retorted, "I don't see any conflict." Oh, I see. The man must think we’re stupid.

Dale’s lawyer asserted that the bad press had hurt Dale’s ability to run as a Democrat and asked that he be allowed to run as an Independent. Yes, Dale has the distinct honor of being a poster child for turncoat Democrats, a Mississippi Lieberman, if you will. Hell, if Dale likes the Republican values so much, why doesn’t he just come out of the closet and declare himself to be one?!

Copeland “has been a registered lobbyist for the American Insurance Association since 2000.” The website for his firm, Copeland, Cook, Taylor & Bush, states that CCTB “serves as general counsel to Mississippi's largest property and casualty insurer and as local counsel for numerous other insurance companies. The American Insurance Association selected the head of the firm's insurance practice group to serve as Mississippi counsel for the Association. . . . The Mississippi Department of Insurance . . . and numerous other insurance-related organizations utilize the services of the insurance practice group.”

Excuse me?! More conflicts of interest?! Holy Moly.

Since the judge ordered that Dale be put on the ballot to run as a Democrat in the primary this August, hopefully Mississippi Democratic voters will elect a real Democrat as insurance commissioner rather than putting back into office George Dale who has obviously developed toooo cozy of a relationship with the folks he is supposed to regulate.

Insurance commissioners don’t have to be this way
Let’s contrast Mississippi’s insurance commissioner with California’s former insurance commissioner John Garamendi, who won his race for Lt. Governor in last November’s election. Garamendi has a fierce reputation for defending California’s policyholders and going up against insurance companies like State Farm. About a year ago, Garamendi went public “accusing California's largest auto insurers of using political extortion to get him to delay implementing laws that would save California motorists money.”

San Francisco’s CBS television station reported that Garamendi received a phone call in which “he was offered a take it or leave it deal. [Garamendi] says a lobbying group that represents the state's top auto insurers threatened to spend over $2 million in a negative ad campaign unless he delayed new insurance regulations - regulations that require auto insurance companies to give more weight to how people drive rather than where they live, a practice known as red lining.”

Garamendi said the lobbying group behind the threats “is funded by State Farm, Farmers, Safeco, Allstate and other top insurers.” The San Francisco television station reported that “State Farm confirmed to CBS 5 that the phone call to Garamendi did take place, but they denied blackmail or coercion.” State Farm sure is busy these days, and apparently not with taking great care of its policyholders.

Rather than buckling under the weight of the alleged blackmail and extortion, Garamendi went public. View news clip. He also turned the matter over to the FBI and state officials. Read Garamendi’s letter to the FBI and state officials.

Garamendi is proof positive that standing up to corporate bullies can be successfully accomplished. All it takes is courage, character, and commitment to the public good. I am proud to have cast my ballot for Garamendi for California’s Lt. Governor and proud that he won the election. Garamendi is the kind of public servant we need all over this country. We need the likes of him from the local court house straight through to the White House, from one side of this country to the other—including my homestate of Mississippi.

I’m proud, too, of Mississippi’s Attorney General Jim Hood for doing his job in the face of what must be enormous political pressure to back down. He is keeping his promise to the citizens of Mississippi to "strictly enforce our consumer protection laws [and] advocate for the rights of victims." Between Hood’s efforts and those of pit bull attorneys like the Scruggs Katrina Group, State Farm will be forced to live up to its PR and become a good corporate neighbor.

Of course, the ultimate remedy is to expand the federal government’s flood insurance program to include all natural perils. Gulf Coast Congressman Gene Taylor (D-MS) introduced the Multiple Peril Insurance Act of 2007 (The bill is H.R. 920.)

We can partner with Congressman Taylor to take the wind out of the insurance industry. You know what that means! It's political hell raising time again. We can call and email our own congressional representatives to request that they co-sponsor the Multiple Peril Insurance Act of 2007.

That way next time a natural disaster befalls any of the “55 percent of the U.S. population already living within 50 miles” of our nation’s coastlines, we can be assured we will be treated fairly . . . just like a good neighbor.

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