Cabinet members were talking softly, smiling at one another, clapping each other on the back. But anyone who couldn't sense a Baileygate hangover throbbing uncomfortably over the March 29 Cabinet meeting had his head in the sand.
There were two finalists for Florida insurance commissioner at that meeting, Jeffrey Bragg of Palm Harbor and Rep. Bill Hager, R-Boca Raton. Two of 55 applicants. All Gov. Rick Scott and Chief Financial Officer Jeff Atwater had to do was agree on one of the two and get one more vote, either from Attorney General Pam Bondi or Agriculture Commissioner Adam Putnam.
"I would like to extend an offer of the position of commissioner of insurance regulation ... to Rep. Bill Hager ...," motioned Atwater.
"I won't second it," replied Scott.
And that was that. Bragg was the governor's man. No further discussion, except to keep the application process open until April 15. When the meeting adjourned, it was as if Scott had snatched up his pail and shovel and left the sandbox.
Shades of the step skipped when the governor forced the resignation of FDLE Commissioner Gerald Bailey in December 2014. You remember: Florida Cabinet members, who by law must take part in the firing and hiring of the FDLE commissioner and a handful of others, were roundly embarrassed. All said after the Bailey ousting they had been duped and had no idea the commissioner had been unilaterally fired.
After intense media criticism, Cabinet members, and even the governor, agreed to greater transparency and to keep a tighter rein on hiring-firing protocols involving agency heads.
But it may be difficult for the rest of the Cabinet to come around to Scott's choice, even if they're feeling particularly charitable toward the governor. The Capitol is buzzing over the validity, or lack of it, of Bragg's qualifications to serve as insurance commissioner at all. The basics are this:
In the past 10 years, the applicant must have had five years of private or public insurance experience. Bragg, executive director of the Terrorism Risk Insurance Program (TRIP) from 2003 to 2014, HAS been in the public sector during the past 10 years, though he misses the mark in the private sector. Yet, in the public sector the applicant must be a senior official at the state or federal level regulating companies or agents. Bragg was a senior official in Washington at the Terrorism Risk Insurance Program (TRIP). However, despite his assurance before the Cabinet ("I regulated the program," he said) TRIP itself doesn't regulate anybody or anything. Insurance executives insist TRIP operates basically as the Florida CAT fund does. It is a government reinsurance program for terrorism.
I asked all Cabinet members, Scott included, if they are re-evaluating Bragg's application to make sure he qualifies for the job. Through their staffs, each gave Sunshine State News telling if not specific answers. The exception was the governor, whose office didn't reply at all.
Aaron Keller, Putnam's press secretary, told me, "We are reviewing applications." Kyle Mason, press secretary for Bondi, said, "The candidates and their qualifications will be discussed in the open at the next Cabinet meeting." And Atwater, who personally reviewed 15 applications during the first round, said through Communications Director Ashley Carr: "We are continuing to review all applications ... in advance of the upcoming Cabinet meeting where conversations will continue in an open forum. All applicants’ qualifications are being reviewed as part of this process."
Apart from qualifications, Bragg struck the applicant gong when Bondi asked him, "What about the navigators in the Affordable Health Care Act?" He had no idea. "I'm not familiar with what you're asking," he responded.
Bragg did not return Sunshine State News calls placed to his Palm Harbor home.
It's true, the governor has always wanted people of his own choosing around him, and to find those people, he often listens to a cadre of friends and lobbyists he trusts.
But it has become a shady pay-to-play game.
To illustrate where we are now in the replacement of Insurance Commissioner Kevin McCarty, we have to look more closely at Fred Karlinsky of Greenberg Traurig, LLP, the man who has the governor's ear on insurance matters. Karlinsky is an insurance lobbyist who has raised a lot of money for Scott's Let's Get to Work political committee.
It has been well documented that Karlinsky is supporting Jeff Bragg to replace McCarty.
"Karlinsky's association with Jeff Bragg is what scares a lot of us off him," a political consultant close to Cabinet members told me on condition of anonymity. "He helps people and companies who need favors buy their way in."
Karlinsky has lobbied Florida's executive branch on behalf of several insurers including Heritage Property & Casualty Insurance Co., according to state lobbying records. Campaign records show Karlinsky personally donated at least $3,000 to Scott's campaign in 2014, and served as a co-chair for the governor's inaugural committee.
Going back a year, in 2013 Heritage wrote a $30,000 check to the Republican Party of Florida, then chaired by Lenny Curry.
Karlinsky client Heritage, you might recall, was the startup insurer that two years ago gave $110,000 to Scott's Let's Get to Work, and after only nine months in business won a sweetheart-deal of a contract that gave the company up to $52 million to carve out as many as 60,000 customers from state-run insurer Citizens. Soon after, the company told its agents it would write no new business in 18 South Florida ZIP codes, that it was canceling thousands of policies to reduce risk exposure. Many of the insureds had signed up less than 90 days before.
Records show Heritage has also contributed $30,000 to the PAC supporting former Insurance Consumer Advocate Sean Shaw’s bid for a state House seat in Tampa. Shaw is Tampa trial lawyer Chip Merlin's law partner. Merlin has a major practice area suing insurance companies. In fact, here's what Merlin is quoted as saying in the South Florida Sun-Sentinel after the March 29 Cabinet meeting: "Policyholders should breathe a short sigh of relief today and then demand the new search include candidates willing to put consumers, not the insurance industry, first," Shaw was a spokesman for Merlin on insurance issues for five years, but then dropped out of sight. Now Merlin is speaking to the media, and, as he did at the Cabinet meeting, he is blasting Hager’s bid to become insurance commissioner.
Jay Neal, executive director of the Florida Association for Insurance Reform, is a big supporter of Bragg. FAIR is a front group/de facto lobbying association for a number of insurers. Unsurprisingly, Karlinsky client Heritage Insurance is a major sponsor of FAIR’s annual meeting, and can influence FAIR’s positions. Neal and FAIR have come out strongly in the media supporting Bragg and attacking Hager as a candidate.
SNL Financial Extra, found on a Nexis-Lexis database, reported a Jan. 25, 2015 story ("Fla. governor's office asked lobbyist for candidates to replace Insurance Commissioner McCarty") saying Scott's administration consulted with Karlinsky about candidates to replace McCarty as far back as late 2014 for ideas on who might take over at the Office of Insurance Regulation. Karlinsky responded by sending Scott's team a handful of possibilities, including Louisiana Deputy Commissioner of Consumer Advocacy Ron Henderson. The administration contacted Henderson about interviewing for the job in early January, Louisiana Insurance Commissioner James Donelon told SNL. The Tampa Bay Times also had the story.
Scott was ready to bring Henderson aboard, but the move fell victim to bad timing and the Baileygate aftermath. McCarty, meanwhile, knew he was done for and planned his departure well in advance.
In December 2014, Scott showed his appreciation to Karlinsky, appointing him to a prestigious state board, the nine-member Supreme Court Judicial Nominating Commission. It gives the lobbyist a seat at the table in recommending who should be the high court's next justice.
Karlinsky's ability to find insurance interests fat enough to keep feeding Let's Get to Work is all over the Internet. What isn't there is his interest in a Bragg appointment. What is the relationship between Karlinsky and Bragg, what would the future hold for these two, one as a beholden insurance commissioner, the other as a governor-go-between with insurance interests for clients?
Like Bragg, Karlinsky did not return my phone calls Wednesday and Thursday. But Hager did. He's hoping he's still in the hunt.
"I hope Gov. Scott will continue to evaluate our applications," said Hager. "I have always supported the governor 100 percent. I believe I am well qualified and I'm completely excited about serving the citizens of Florida."
Hager, an attorney, has been vice chairman of the House Insurance & Banking Subcommittee for the past four years. Besides serving in the Florida Legislature, he manages a small business that provides expert witness testimony in complex insurance cases and arbitrates reinsurance disputes. He served as the insurance commissioner of Iowa from 1986 to 1990.
Friday is closing day for the second round of applicants. As must-see events go, I'm expecting the April 26 Cabinet meeting to be right up there with a 2016 Republican presidential debate.
[This column was altered at 10:45 a.m. Wednesday to clarify information about Bragg's qualifications. See the italicized paragraph above.]
Reach Nancy Smith at firstname.lastname@example.org or at 228-282-2423. Twitter: NancyLBSmith