TALLAHASSEE -- When the president of Citizens Property Insurance Corp. learned that his chief financial officer had used corporate funds to finance a luxurious weekend at a $633-a-night resort in Bermuda, he initially described the expenses as “absolutely appropriate.”
But President Barry Gilway changed his tune after a Herald/Times story and a subsequent inspector general report documented evidence that executives regularly ran up huge expenses on the company credit card, traveling and dining at four-star locations across the globe.
“As guardians of public funds, we must hold ourselves to a more rigorous standard,” he said.
It was a full-throated mea culpa, following sharp rebukes from Gov. Rick Scott, state Chief Financial Officer Jeff Atwater and top lawmakers. But behind the scenes, Gilway was quietly handing out huge salary raises for the well-traveled CFO, Sharon Binnun, and several other executives who run the state-backed company.
As news stories were documenting her $35,000 tour through four-star hotels in four different countries, Binnun was enjoying a new $31,000 pay hike, boosting her salary 14 percent to $255,000.
Several other top officials got pay hikes of more than $25,000 late last year as well, even as the company’s executive suite was enmeshed in corporate scandals and reports of questionable spending. Citizens says the raises were justified because of increased responsibility and “parity” with the private market.
Meanwhile, tens of thousands of other state employees have gone six years without a pay raise. This year, the governor has proposed $2,500 pay raises to public school teachers, a move top legislative leaders have yet to endorse.
While company execs enjoyed big salary hikes and generous perks, Citizens was pushing homeowners to pay higher insurance rates and slashing their coverage.
“I thought I could take some consolation in the 45 percent [premium] increase because I would be getting better coverage [turns out to be less],” Coral Gables homeowner Patricia Temple wrote in a letter to her state senator this month. “That was quickly destroyed [after] learning money was recklessly and unnecessarily spent on lavish dinners, luxury hotels, etc. — partly paid with my money.”
Temple, an 80-year-old retired librarian whose insurance premium went up $2,100 last year, was featured in a 2012 Herald/Times series on Citizens’ statewide home reinspection program. The program hit more than 250,000 homeowners with average premium increases of about $800, costing them nearly $200 million. That’s on top of the $250 million from a 10.8 percent statewide premium hike approved last year.
Citizens says the rate increases are necessary because it needs to raise more money in order to avoid “hurricane taxes” that would be levied on Floridians after a massive storm. Despite seven straight years with no hurricanes, Citizens officials say the company’s $15 billion portfolio is not large enough to handle the kind of apocalyptic storm that happens once in a century.
While Mother Nature has spared Florida from hurricanes since 2005, Citizens has taken in billions of dollars in premiums from homeowners. Citizens also received a $715 million taxpayer bailout and the promise of millions more if it ever runs out of money again. Awash in a record amount of cash and bolstered by a taxpayer safety net, the state-run insurer has been operating more like a private company than a tax-exempt government entity.