TALLAHASSEE -- At Citizens Property Insurance Corp., a corporate culture plagued by inter-office scandals, sexual impropriety, lavish spending, alleged cover-ups and big severance checks for disgraced employees has simmered under the radar for years, according to hundreds of internal documents obtained by the Herald/Times.
The corporate cauldron of misconduct boiled over this year when internal investigators tracked the trail of scandal up to the highest levels of the company, drafting a scathing 73-page report that highlights a laundry list of improprieties.
Last month, the investigators were terminated, their report was gutted, and Citizens’ Office of Corporate Integrity was abruptly shut down.
As Citizens has become notorious throughout the state for hiking homeowners’ insurance rates and slashing their coverage, the company’s internal scandals and corporate excess now offer a new reason for infamy.
For the second time in three months, Gov. Rick Scott is calling for an investigation into Citizens’ highest levels of senior management.
“Citizens is committed to ensuring the highest level of ethics and welcomes a full investigation by the Inspector General into the changes made in the office of corporate integrity,” said president Barry Gilway, who has requested a special hearing next week to discuss the recent developments with his board of directors.
There will be much to discuss, including the following allegations, unearthed by the now-fired investigators:
• Susanne Murphy, Chief Administration Officer at Citizens, served as a legal advisor to the company for years, despite not being a licensed attorney in Florida. When it was discovered, top officials at the company altered incriminating documents and allowed Murphy to resign in August while continuing to receive salary and benefits until December.
• Citizens paid more than $80,000 in severance to an underwriting executive accused of having an affair with a subordinate, and helped him receive unemployment benefits after he resigned from the company. The company declined to pursue an investigation.
• Citizens executives showed favoritism to certain employees, firing one employee who used company resources to promote a line of sex toys, while barely disciplining an executive who drunkenly slipped off her bra during a company retreat and promoted a side-business on company time.
• The company outsourced several internal investigations to private law firms. In some cases, the firms cleared high-level employees of charges without considering crucial pieces of incriminating evidence.
A Citizens spokeswoman declined to comment further on the various allegations prior to next week’s hearing.
Scott said he was concerned that Citizens terminated the very employees that discovered these improprieties.
“In light of this report, the timing of the firings raises new concerns,” Scott wrote in a letter this week, calling on his chief inspector general to investigate. “Given the appearance of impropriety, I request that you conduct a thorough review of the terminations to determine whether any of them were retaliatory in nature.”
Executives at Citizens claimed that members of the Office of Corporate Integrity were terminated as part of a company restructuring, aimed at “avoiding unnecessary redundancies” and beefing up fraud detection.