Citizens board responds to scandal, blasts media

Published On: Nov 28 2012 09:12:10 AM EST
Updated On: Nov 27 2012 09:10:00 PM EST

TALLAHASSEE, Fla. -

Responding to charges of improprieties at Citizens Property Insurance Corp. the state-backed insurer's CEO lashed back Tuesday, calling media coverage of the unfolding drama inaccurate and misleading.

Speaking to members of the company's governing board, Citizens President and CEO Barry Gilway acknowledged that a handful of Citizens supervisors in separate incidents behaved inappropriately but others face allegations that have been disproved or remained unsubstantiated, he said.

"The last time I looked around, we were still in the United States of America," Gilway said. "We have not been annexed to a communist regime. We still have some basic rights. Those rights include innocent until proven guilty."

Gilway requested the meeting last week following the release of hundreds of pages of documents alleging misappropriations of funds, sexual harassment, lucrative severance packages and other inappropriate behavior by a handful of Citizens supervisors between 2004 and 2010.

In one instance a pair of Citizens supervisors took off their bras and danced at the Coyote Ugly bar in Tampa during a company retreat there in 2009. The employees in question were disciplined, according to do documents released by Citizens last week.

Another supervisor was accused of practicing law in Florida without a license, an allegation Gilway says remains unsubstantiated.

Gilway said he was "disgusted" by the actions of some employees, which happened long before he took over in June. But he blasted media accounts he said took unsubstantiated information on a few to sully the integrity of the entire company.

"It is also critically important that the actions of a very, very few people over the course of four years not tarnish the reputation of 1,300 employees who come in every single day and bust their tails, even though they are getting trashed in the press on a daily basis, " Gilway said.

The company has also been under scrutiny because an internal auditing office was disbanded as the allegations were being examined.

The allegations prompted Gov. Rick Scott last week to direct his inspector general to investigate whether Citizens Office of Corporate Integrity employees were fired for conducting looking into several allegations. Meanwhile, the inspector general?s office is also looking at Citizens' business expenses following allegations of stays in upscale hotels.

Sean Shaw, a former Florida insurance consumer advocate who now works for a Tampa-based law firm that represents insurance consumers, said Citizens' anger was misdirected. Instead of focusing on the media, Citizens' energy would be better spent shoring up an internal governance structure, he said.

"Instead of spending time talking about fixing abuses of the public trust, the board seems more interested in blaming the media for finding out about it," Shaw said in a statement. "Citizens says the media is disgusting, but I assure you, policyholders and taxpayers have even more choice words about the management of Citizens."

Gilway acknowledged that a number of procedural safeguards were not in place between 2004 and earlier this year. The company, for example, had no written policy toward severance agreements while records show that more than $750,000 was spent on severance packages since 2004. Steps are now being taken to address those corporate governance issues. Travel guidelines have already been put in place.

"We will win back the credibility of this company in the eyes on the public," Citizens Chairman Carlos Lacasa said Tuesday.

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