[corp-focus] The Insurance Industry/FBI Connection

[Robert Weissman]

The Insurance Industry/FBI Connection
By Russell Mokhiber and Robert Weissman

Wouldn't it be great if environmentalists could have a close working
relationship with the Federal Bureau of Investigation (FBI), so that
anytime the local industrial polluter spouted cancer-causing chemicals
into the air or water, the FBI agents would bust into the corporate
executive suites and haul away the perpetrators?

Or when insurance companies rip off policyholders, or fail to pay out on
insurance policies, wouldn't it be great if consumer groups had a working
relationship with the FBI -- just pick up the phone and call your local
FBI agents, and have them knock on the door of the CEO of the insurance
company, and begin asking questions?

Wouldn't it be great if law enforcement sided with individuals against
corporate criminals in our midst?

In the area of insurance fraud, at least, it might balance the scales of
justice. Right now, the FBI has developed a very close working
relationship with National Insurance Crime Bureau (NICB). The Chicago area
crime-busting group is funded by the insurance industry to investigate
crimes against insurance companies -- for example, to crack down on
individuals who stage auto crashes to cash in on insurance policies.

Last year, the property and casualty insurance industry pumped $28 million
into the NICB. And NICB has developed a very close relationship with the
FBI. Robert Bryant, a former number two man at the FBI, is now the
president of NICB. Gene Glenn, a former special agent in charge of the
Salt Lake City Division of the FBI, is now the NICB's vice president for
field operations.

The FBI has a series of written memorandums of understanding (MOU) -- at
least three -- outlining in detail the working relationship.

According to Jim Spiller, NICB's executive vice president, one deals with
"a very highly sensitive covert operation" that he could not reveal to us,
one deals with a joint FBI/NICB crackdown on the theft and export of
automobiles, and the third addresses "the sharing of information about
stolen vehicles." (The NICB refused to let us see copies of the MOUs.)

The FBI/NICB relationship was exposed by Bill Conroy, the editor of the
San Antonio Business Journal. Over the past 18 months, Conroy has written
a series of articles that have been ignored by the mainstream media.

In his series, Conroy reported that:

* A national FBI/NICB operations called Sudden Impact involved joint
interrogation of suspects, joint search warrant raids and joint access to
medical records through an insurance industry database.

* Operation Sudden Impact netted minorities at a rate of nearly 8 to one.

* A lawyer whose San Antonio office was raided by the FBI as part of
Sudden Impact was never charged with a crime. The FBI told Conroy that it
has no records indicating that the attorney has "ever been of
investigatory interest to the FBI."  The lawyer claims that the raid
destroyed his practice and reputation.

* A former FBI informant claims that the FBI was targeting Iranians in San
Antonio as part of Operation Sudden Impact.

* An Assistant U.S. Attorney who was removed from an FBI/NICB case after
making allegations of misconduct against her fellow attorneys involved in
the case is now claiming that she is being persecuted by the U.S.
Attorney's office.

(The San Antonio Business Journal is owned by American City Business
Journals, which is owned by the Newhouse chain. American City Business
Journals owns about 40 business journals around the country.
Interestingly, after the articles appeared in print, insurance giant AIG
took out ad space on the web site of the American City Business Journals
(www.bizjournals.com). The series of articles describing the NICB/FBI
connection were never picked up by the other business journals in the
chain.)

Two members of Congress -- Charles Gonzalez, D-Texas, and Cynthia
McKinney, D-Georgia -- are looking at possible Congressional inquiries
into the NICB/FBI connection.

The NICB denies targeting minority groups. "Our criminal investigations
are conducted based on the criminality, not the culture of any
individuals," Spiller said. "It's unfortunate that the people involved in
this investigation were minorities. We follow the money."

Would the NICB investigate insurance companies who were ripping off
consumers? "No," Spiller said. "That would be a job for state insurance
regulators."

But Doug Heller of the Los Angeles-based Foundation for Taxpayer and
Consumer Rights says he wishes the FBI and NICB would pay some attention
to insurance industry rip-offs of consumers.

"The level of consumer fraud against insurance companies is minuscule
compared to the insurance company fraud perpetrated against insurance
policyholders around the country," said Heller. "But law enforcement
rarely pays attention to insurance industry crimes perpetrated against
consumers. We would love to have an agreement with the FBI to go after the
insurance industry. We have plenty of leads for them."

The FBI says that it works closely with some public interest groups, like
the American Association of Retired Persons, to crack down on
telemarketing fraud, for example.

But FBI spokesperson Angela Bell could not say whether or not detailed
written agreements -- like those hammered out between the FBI and NICB --
exist for non-industry groups.

Every year, the FBI puts out its "Crime in the United States" report,
which informs the nation about street crimes. There is no equivalent for
corporate and white collar crime.

The FBI is cooperative with industry groups who want to crack down on
street thugs. Isn't it time to show a little cooperation with public
interest groups that want to crack down on corporate and white collar
crime?


Russell Mokhiber is editor of the Washington, D.C.-based Corporate Crime
Reporter. Robert Weissman is editor of the Washington, D.C.-based
Multinational Monitor. They are co-authors of Corporate Predators: The
Hunt for MegaProfits and the Attack on Democracy (Monroe, Maine: Common
Courage Press, 1999).

(c) Russell Mokhiber and Robert Weissman