My sleepy New Jersey suburb was recently rocked with scandal when our highly respected and popular mayor was accused of extorting bribes from a health insurance broker. For me, that's bad news. But what's worse is that this could happen in your hometown.
Yes, I know all about the Garden (of Corruption) State: home of the Sopranos, leaking landfills and the infamous New Jersey Turnpike. But my township, and our mayor, had a good reputation. Our garbage is collected and our taxes are no worse than any other New Jersey jurisdiction, so our mayor was re-elected by a 2-to-1 majority.
Then things went awry. First, The Citizens Campaign public interest group started to question why our school board's insurance broker had been working without a contract since 2009. Then the FBI showed up and littered our township government and school board with subpoenas. Finally, our mayor was charged by the Offices of the United States Attorneys with soliciting $12,400 from said insurance broker, allegedly "to pay his taxes." Pay to play
Insurance brokers arrange for businesses, townships and school boards to buy health insurance and workers' compensation for their employees, property/casualty insurance to protect against fires and slip-and-falls, and auto coverage.
The problem boils down to this: Just exactly who is helping who, and to what? Insurance brokers don't usually work for a township or school board, but instead are paid by the insurance company, which gets the contract with the township or school board. And because insurers make a lot of money, insurers pay brokers a lot. Citizens Campaign said that our school board's bill for health insurance alone is $1.3 million a year.
So we have brokers with millions of dollars at stake who aren't paid by our local governments and conduct business without contracts. And then there is our mayor, allegedly looking for a handout.
This is a recipe ripe for greed, bribery and corruption. But in this case, our broker turned the tables on our mayor. According to published reports, the broker taped phone calls with the mayor and then turned the tapes over to the FBI.
Making money the old fashioned way
This is a never-ending saga for insurance brokers, who've been paid by the wrong people for generations. Then-New York State Attorney General Eliot Spitzer nailed our country's largest insurance broker for bid-rigging almost 10 years ago. But when Spitzer self-destructed as governor, it was back to business as usual.
So townships like mine have lived in blissful ignorance. "We're saving money because we're not paying our insurance broker," is the consensus. "He (or she) is working for free."
Not by my account. The contracts negotiated by the broker could cost twice as much, not to mention the cost of bribing officials to keep the job.
Our township isn't unique. Similar scandals have rocked communities across our state, and in one shore town the school superintendent took more than $1 million in bribes, according to the U.S. attorneys office, and has now pleaded guilty to mail fraud and conspiracy.
As for our mayor, even though his case is still pending, life goes on. He just traded in his 2009 Crown Victoria for a new 2012 Chevy Tahoe. My guess is that he's expecting snow this winter. He glad-handed at the local Azalea Festival. And he held a $125-a-plate dinner for his defense fund.
He acts as if nothing is wrong and, perhaps in his eyes, nothing is.