Scott, who had earlier called on his investigators to probe reports of lavish spending by Citizens executives, is no longer satisfied with that explanation.
He wants his chief inspector general, Melinda Miguel, to conduct a deeper probe into why four corporate watchdogs were abruptly terminated at Citizens.
Miguel is likely to find that the Citizens’ investigators had drafted an explosive report before they were terminated, documenting evidence of botched internal investigations, employee favoritism and generous severance packages for executives involved in office scandals. The report — which features hundreds of pages of exhibits — comes on the heels of a Herald/Times investigation documenting lavish spending by company executives, including $600-a-night hotel stays.
The evidence of corporate excess and impropriety comes at a time when Citizens is seeking higher insurance rates for most of its 1.4 million customers, claiming that the company is undercapitalized. The state-run company currently holds more than $6 billion in cash, a record amount that heightens the risk for waste and abuse.
Here are some of the things that Scott’s Chief Inspector General, Miguel, is likely to find as she probes the recent developments at Citizens:
“Hush Hush” money
The anonymous tipster that set off a four-month investigation by the Office of Corporate Integrity was particularly concerned that Citizens was wasting money on questionable severance agreements with disgraced employees.
“When they are afraid they can’t protect certain employees or are afraid an employee will report these mishandlings, they pay them $$$$$ to keep this quiet and ask them to resign,” the employee wrote in a posting to the company’s complaint system.
During its investigation, the OCI uncovered more than $750,000 in severance payments to employees, including large five-figure separation checks to executives who resigned amid scandal.
A former underwriting vice president resigned after an inter-office sex scandal blew up, with allegations that the executive had asked an underling for $5,000 to help cover up an affair he was having with another employee.
The executive received nearly $80,000 in severance pay, along with another $40,000 in accrued annual and sick leave time. An investigation into the alleged sex scandal was never carried out and Citizens helped the executive to collect unemployment benefits.
OCI’s draft report found that Citizens gave out five-figure severance payments to several high-level employees who left the company after being investigated for misconduct.
The employees who received severance-type payments after being investigated include a former Chief Insurance Officer ($41,046), vice president of claims ($66,983) and a Tampa area vice president ($22,810).
As a part of their lucrative severance packages, outgoing employees signed release agreements promising they would “not make any derogatory or disparaging statement to anyone regarding Citizens, its current and former board members, officers, executives, or employees,” according to documents reviewed by the Herald/Times.
External law firms
Some of the more embarrassing allegations against top executives at Citizens were outsourced to private law firms to investigate.
Repeatedly, those law firms found that the allegations against the executives were “unsubstantiated.”