Lobbyists to the IC’s Office?
On 30 July 2009, the Delaware Insurance Commissioner’s office sent out a Press Release announcing their “new” initiative for “the formation of a new revenue generating division within the Department of Insurance entitled the Bureau of Captive and Financial Insurance Products”. There was a subsequent Press Release, this time working hard at making the case that this is an economic development task for the state.
A bit of small print at the end of the first Press Release caught my attention:
The positions of director, director of business development, and director of strategic development are independent contractor positions subject to Delaware’s procurement law and open bidding process.
So that’s interesting, right? I mean, here we have a “new” department for Captive Insurance products touted as a way to get new revenue to the state, but that work is being outsourced? Managed by outside contractors? This leads me to wonder if this is the result of that really bad RFP that was put out by the ICs office earlier this year — the one we spent some time trying to get better details on and that the ICs office refused to provide. (In part saying that we had no standing to ask — not exactly an open bidding process.)
- The previous Administrator of the Captive Insurance program was William White, who looks like a contract employee too — the DE checkbook shows his firm, Prism Strategies, received a total of $187,619.65 in FY 2009 — including what looks like monthly fees of 15K plus various travel reimbursements. He began there in August 2006 with a charge to grow this program here, and according to the Delaware Captive Insurance Association, the number of captive agencies domiciled here grow to 40 in 2008, with others in process. Mr. White returned to his consulting firm as of 31 July 2009. He was involved with the Delaware Captive Insurance Association, and provided an interview here and found himself in many pictures with the Association’s members.
- The new admin, who is Steve Kinion, works for an Illinois law firm — Zack Stamp. A look at KWS’ campaign finance reports shows that Mr. Kinion provided her with an in-kind contribution of $900.00 for a breakfast fundraiser on 9/23/2008 and a $1200.00 (the maximum individual contribution) campaign contribution on 5/24/2008. He was also on that remarkably long and out-of-town list of people on her Transition Committee.
- Zack Stamp is mostly a practice focusing on lobbying and insurance regulatory affairs issues. The link shows a list of some of their lobbying and regulatory clients. One of the things that Mr. Kinion’s bio over at Zack Stamp highlights is:
As a regular attendee at National Association of Insurance Commissioners meetings, Mr. Kinion has developed relationships with insurance regulators in many states. He makes it a priority to be at the forefront of regulatory issues in the insurance industry.
An insurance lobbyist? In charge of creating new business? Mr White’s background was directly in Alternative Risk Transfer strategies and “over thirty years of experience as an underwriter, consultant and regulator”. Putting an industry lobbyist in charge does seem to promise optimization of state revenues — it is usually a sign of a government getting ready to open the cupboards to industry.
- I can’t find contracts for any of the new firms or consultants up on the OMB list of vendors. Interestingly, there appear to be NO consulting contracts or personnel contracts available for view there.
- A search of the state checkbook shows that for FY2009, Zack Stamp Consulting got 5 checks for $16K each, for a total of $80K on June 19. There are no entries in the checkbook for Kinion. The checkbook also shows 2 payments for E M Ianni for a total of $31,086.03 on 6/23/2009. Anne Pruett shows a total of $63,211.99 since last August; no entries for the others.
So what is going on here? Did this contract change hands as a result of that horrific RFP that we spent time trying to get data on this past spring? A campaign fundraiser and contributor getting this pretty lucrative contract raises alot of questions. Then count in the claim that this was done in accordance with Delaware’s “open bidding process” — which if this was a result of the RFP that we wanted more data on certainly wasn’t open at all. And in the process of changing hands, we went from one consultant to three.
Both of the Press Releases emphasize that captive insurance agency creation generates revenue. Which is true — Vermont is the current US leader in domiciling captive companies and their revenues are upwards of $25M per year on more than 800 firms. In comparison, Montana claims to have 38 companies (about the number of DE companies) who are projected to contribute $350K this year to their coffers. I am presuming that DE’s tax on Captive’s is fairly competitive and the $350K is in the neighborhood of what we collect. But to get to that we paid almost 200K with Mr White and seem on track to pay alot more with this new team of contractors.
Developing new revenue sources are great, but you have to pay attention to ROI — the ICs office should not just say they are generating revenue with this move to hire more contractors, they should tell us what they are paid AND what their revenue generation expectations are. At the end of the year, the ICs office should tell us what revenue they actually generated so we can all see how effective this hire was — real openness, especially since a major campaign crony seems to have gotten this assignment. One again, I am reminded of the lockdown on spending that is supposed to be the new regime all over State government — and the ICs office does not seem to have to abide by this philosophy. Or at least does not have to provide detail that would show that this hire would translate into $XX of revenue.
Just like that really bad RFP that came out of the ICs office procuring something so secret that you couldn’t ask questions about it, this round of expensive hiring — including an election crony — does not line up with what is supposed to be much more careful spending and more openness. It also raises ethical questions.
I’m interested in your take on what is going on here, and why they would make the claim of openness when this has been anything but. There’s lots of unanswered questions. And if you need to comment very anonymously, you can hit us up via out tip line at the top of the page.
Tags: Insurance Commissioner
wonder how long it will take Burris to try and out ya ass for saying mean and awful dings ’bout dese sleezies
Then count in the claim that this was done in accordance with Delaware’s “open bidding process” — which if this was a result of the RFP that we wanted more data on certainly wasn’t open at all.
Delaware law doesn’t even require an RFP for professional services and is ripe for reform. (Paging John Kowalko!)
The “open bidding process” for professional services is very minimal, and DOI appears to be correct in asserting that they followed the law. All the RFP rules that you usually think of when you think of RFPS, are part of Delaware law for materials and for construction contracts, but not for professional services.
As far as learning who won the RFP, here is what the law says:
So I am assuming DOI chose the “letters to applicants” process rather than the public notices.
Anybody at DL care to submit a FOIA request to find out who the winner is?
anon,
CRI’s speciality is FOIA
Anon wrote: “Anybody at DL care to submit a FOIA request to find out who the winner is?”
Joking aside, ‘bulo agrees with Anon. No doubt, it’s something the contributors/moderators will consider.
The deliberately secretive nature of this office makes ‘bulo think that we’re dealing with a rogue agency staffed by rogue operatives. With millions of dollars in question, SOMEBODY needs to investigate what’s going on.
Which reminds ‘bulo, kudos to Cass for this report. This is complicated stuff and requires someone with the ability to explain this in an understandable way for the rest of us. Cass has done this. Now it’s up to the DL community to work to fill in the blanks the IC’s office wants kept blank.
Good post Cassandra. It does seem disingenuous to say that we are creating Delaware jobs if all of those jobs are for people that live in DC and Illinois.
Can anyone spell Glen Kenton?
SOMEBODY needs to investigate what’s going on.
LOL. This is Delaware. Ain’t nothing gonna happen. There won’t be any investigation, and even if there were, there would be no charges or penalty. Keep up the good work. It must be frustrating. KWS is a fraud and I would imagine the Delaware Way is using the IC office to continue the practice of enriching the established players. Is Merconi on the payroll?
Why is everyone so surprised. Enough people warned about KWS even before the primaries. Yes, she’s a fraud. Everything that happened since she took office and will go on happening follows from that. She’s in this for personal financial gain and for payback to whoever helped get her into office. Period. Anybody want to stop her?
Oh , here’s Cass who has had every opportunity to get answers to her questions still refusing to pick up the telephone. heh.
how is this contract paid for without General Assembly approval? was it hidden in the budget just passed?
“Oh , here’s Cass who has had every opportunity to get answers to her questions still refusing to pick up the telephone.”
Yes, because most government officials, when you ask them questions like these, will just come right out with the truth. As you like to say, Nancy: Heh.
Let’s also remember that the last time we had questions we were told we didn’t have standing to ask them. But the FOIA suggestion is not a bad one.
One other data point is that the Delaware Captive Insurance Association has gotten $23,473.75 from the ICs office since January — more than $20K of which is marked as Business Development.
This is not part of the budgeting process, per se. They seem to have a separate, self-funded budget. They seem to use this to justify spending whatever they want.
LG: Whatever KWS doesn’t spend goes into the general fund. So the more she spends for her own purposes, like paying off political debts, the less the state gets. The DOI is just as accountable to the state as any other agency, or should be, anyway.
Compare this picture http://www.sussexcountyonline.com/campaign2000/results/insurance.html to this one:
http://www.delawareinsurance.gov/default.shtml. Golly gee whiz, she hasn’t aged a day in over 10 years! That’s just one example of KWS’s lies, but to her credit she started with a small one. They’ve grown a lot since then.
LG: Whatever KWS doesn’t spend goes into the general fund.
We looked into this on the last go-round.
Joe – sort of. The fees are the reduced the next year to reflect the new costs. So any money that goes to the General Fund, would be from windfalls, rather than annual contributions.
We looked into this on the last go-round.
anon is a writer at DL? interesting? who dis is?
I would suggest a FOIA because it is the best way to get what you want if, as you claim, you aren’t getting any satisfaction any other way.
I would love to see you spend as much time on parsing your ‘county friends’ financials RE: recycled service or pay to play. But I am not holding my breath. double heh. Plus, many of the ‘players’ lining up for county contracts and services hide behind LLC etc. and are way to hard to trace. Shame.
No one here has a monopoly on parsing anyone’s financials — it seems to me that if you are so interested that you would have been picking through these a long time ago. But we’re not holding our breath, either.
From anon’s previous posting:
Would creating a new department to generate new captive insurance business here be categorized as “oversight of insurance companies”?
It’s not a new department. Bill White was contracted for and working to do the very same thing. Elliott’s press release was just a spin to make KWS look important because he benefits like the rest of her cronies. Maybe she’s bucking for higher office.
Cass, you never bother to read Delaware Way. How would you know what sort of parsing I do?
oh boy, nancy is starting early.
If you’ve got it covered, then why complain that we’re not doing the same thing? And I’m still not holding my breath.
@Joe — when White was running this group did he have the kind of staff that was announced for this new person? The Business Development person and the strategic development person?
Cass: No he didn’t but still got the job done. Word is the commissioner will put on more consultants because she can’t handle the job and still owes a bunch of contributors she promised jobs to.
Clarifying my earlier posting: The picture links I provided show that KWS is still using the same picture now that she used in her first campaign for IC in 2000. She’s aged a lot since then, like everyone else would in 9 or 10 years. She lied about her age, too. She’s not 59 but will be 62 next month. Look it up on PeopleSearch. Starting with small lies was just a preview of the big lies that followed.
It is hard to be surprised about the picture because it has looked like a 10 year old picture for a few years now.
The lying about her age though. I don’t find that cute.