More misconduct allegations arise at Citizens

02/27/2013 6:37 PM

02/28/2013 11:12 AM

In an attempt to clear its name after a series of scandals involving corporate misconduct and improper spending, Citizens Property Insurance Corp. released a laundry list of 474 internal complaints Wednesday.

While Citizens released the documents to prove that it has properly handled allegations of misconduct in recent years, the move also shined an embarrassing light on much of the company’s internal dirty laundry. The list of complaints reads like a trove of office sex affairs, corporate corruption, fraud, workplace pornography, discrimination, theft and other allegations. In at least one case, a Citizens employee swiped his corporate credit card at a strip club. Names of employees were not disclosed. But law enforcement authorities were alerted in cases of possible alleged criminal activity.

“This review is an important piece of Citizens’ ongoing efforts to strengthen internal policies to ensure that our employees are held to the highest standards of corporate integrity,” said company president Barry Gilway, in a statement. The company stated that “all complaints were addressed and corrective action taken in accordance with Citizens’ policies in place at the time.”

The release of the complaint information is the latest dustup for Citizens, which is still reeling from revelations about lavish corporate spending, large raises for executives and various allegations of impropriety.

Gilway has said that he was immediately hit with news of various corporate scandals when he joined the company last June. After taking what he called “a bashing in the press,” Gilway asked Citizens’ Internal Auditor, Joe Martins, to look over the company’s handling of misconduct allegations. Martins — who disbanded the company’s Corporate Integrity Office and gutted one of its most scathing reports — found that Citizens had handled internal complaints well over the last five years.

“Where we found weaknesses, we are making necessary improvements to strengthen our complaints and disciplinary procedures,” Martins said in a statement. Many of the complaints involved run-of-the-mill employee grievances, such as a supervisor “wearing too much cologne.”

But others involved more serious allegations, including fraud and improper gifts from vendors who do business with Citizens, a multibillion-dollar company backed by state taxpayers.

The release comes as Citizens is looking to reform itself after a series of scandals. Over the past year, the Herald/Times has documented evidence of luxurious business trips, drunken exploits on company retreats, large raises for executives and the abrupt firing of four internal investigators. Many of the misconduct allegations surfaced as Citizens was raising rates on homeowners and reducing coverage.

Before it was disbanded, the Office of Corporate Integrity was responsible for investigating many of the complaints listed in Wednesday’s document release.

The abrupt firing of the OCI investigators — who had recently discovered evidence of misconduct by Citizens’ highest executives — led to allegations that the company was seeking to cover up the group’s findings. In addition to huge severance packages for disgraced executives, the investigators found that Citizens had mishandled several internal complaints and shown favoritism to some employees, including top execs.

Citizens says the four investigators were fired as part of a restructuring. Gov. Rick Scott’s chief inspector general is looking into the firings after the governor said they had “the appearance of impropriety.” The inspector general report on the firings is expected to be released soon. It could offer more tawdry details on the corporate culture at Citizens, where Gilway said he is trying to rebuild the company’s tarnished reputation.

Wednesday’s document release provides ammunition for Citizens’ critics, who say the company needs to fix its own shop before pushing for higher rates for homeowners.

Even Scott, who has generally supported Citizens’ push to downsize, has bashed the insurer of 1.3 million for its corporate missteps. In an interview last week, he used words like “outrageous,” “foolish” and “ridiculous” when describing some of Citizens’ actions.

“When I see some people doing some foolish things, this is a government-organized entity,” he said. “People shouldn’t be doing these things.”

Adding to the company’s long list of embarrassing revelations is a case in which a Citizens employee used his company credit card to purchase “adult entertainment” in 2010.

“The preliminary review of outstanding charges disclosed that the employee had purchased alcohol on at least six separate occasions and entertainment at an adult entertainment establishment,” Wednesday’s report reads. The employee resigned in 2011.

The document release comes several weeks after the Herald/Times requested public records on several complaint cases, including the case involving the adult entertainment. That request remains pending.

Toluse Olorunnipa can be reached at tolorunnipa@MiamiHerald.com or on Twitter at @ToluseO.

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