FBI Works Closely With Insurance Industry Group

by Russell Mokhiber and Robert Weissman

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?