What a surprise! Deputy Commissioner of MID joins law firm representing State Farm

The announcement in the Sun Herald  mentioned Deputy Commissioner of Insurance Lee Harrell was leaving the Department to join a law firm.

The Mississippi Insurance Department’s deputy commissioner, Lee Harrell, is leaving after 16 years to work for Baker, Donelson, Bearman, Caldwell and Berkowitz law firm…Harrell spent most of his career under former Insurance Commissioner George Dale, who was defeated for re-election in 2007. Dale, the nation’s longest-serving commissioner, now works in the government relations department of Adams and Reese law firm.

Unlike Dale, Harrell is an attorney. He was unavailable for comment Wednesday. Chaney said Harrell will focus on insurance cases in his new job. Baker, Donelson represents insurance companies and policyholders…Harrell oversaw a market conduct study of State Farm after Dale’s departure. (emphasis added)

Chip Merlin connected the dots.

Anita Lee, of the Sun Herald, recently reported that the deputy insurance commissioner who “oversaw” the Mississippi Insurance Department’s Market Conduct Study of State Farm following Hurricane Katrina has left the Mississippi Department of Insurance. Guess who hired him? The lawyers who represent State Farm in Hurricane Katrina matters.

Given this, you do not need to be a psychic to guess how well State Farm did in the Study. I noted the serious problems with the Mississippi Insurance Department study in a previous blog. In an article published in the Sun Herald, a noted consumer advocate wrote that State Farm could have written the report itself. Only legislation which prevents those regulated from hiring, directly or indirectly, those who recently regulated them can prevent this kind of conflict of interest.

This revolving door has a particularly interesting “spin”.

After Hurricane Katrina ravaged the Gulf Coast in 2005, thousands of homeowners received only small payouts for wind damage from their insurance companies, most of which didn’t cover flooding. In cases brought by the Katrina Litigation Group (formerly Scruggs Katrina Group), hurricane victims sought to have a greater portion of their damages covered by their insurers.

Welch, a shareholder in the Jackson office of Baker, Donelson, Bearman, Caldwell & Berkowitz, represents one of those insurers. He was the lead trial counsel for a major insurance company in cases filed by the attorney general of Mississippi, the Katrina Litigation Group and related putative class actions. He was hired shortly after the attorney general of Mississippi filed a case against several insurance companies seeking to have a part of their policy declared void.

The depositions of Lee Harrell in his capacity as Deputy Commissioner make for interesting reading in this new light – as does the MID market conduct survey.

Time will tell if and how Mississippi’s Ethic’s laws, including these provisions at 23-4-105 of the State Code, fit in this picture:

(e) Perform any service for any compensation for any person or business after termination of his office or employment in relation to any case, decision, proceeding or application with respect to which he was directly concerned or in which he personally participated during the period of his service or employment.

(5) No person may intentionally use or disclose information gained in the course of or by reason of his official position or employment as a public servant in any way that could result in pecuniary benefit for himself, any relative, or any other person, if the information has not been communicated to the public or is not public information.

(6) Any contract made in violation of this section may be declared void by the governing body of the contracting or selling authority of the governmental subdivision or a court of competent jurisdiction and the contractor or subcontractor shall retain or receive only the reasonable value, with no increment for profit or commission, of the property or the services furnished prior to the date of receiving notice that the contract has been voided.

At least the slabbed no longer have their taxes paying his salary.

6 thoughts on “What a surprise! Deputy Commissioner of MID joins law firm representing State Farm”

  1. Too bad the revolving door didn’t hit him–and Dale–where the good Lord, uh, well, you get the visual. May the Law of Karmic Justice quickly pay him a quick and graciously vicious visit.

    I’m still convinced the only way to solve this problem is through passage of Taylor’s multi-peril insurance legislation and bringing the insurance industry under the same anti-trust laws as all other financial services in the United States.

    Another great piece, Nowdoucit. 😉 I’ll be thinking of you guys tonight when I’m out dining with some annual volunteers from upstate New York. Good hearted progressives eager to lend their energy and strength to the slabbed. We may end up at Daniel’s if it’s open this evening. Keep up the great work!

    – am

  2. All yes the revolving door. Is it any wonder this bunch at the top of MID have zero credibility with the public?

    I’m certain Mr Harrell will be paid well for his past and present services to State Farm.

    I remember the youtube vid from last year AM. Daniels can use the business so please eat drink and be merry and safe. Have a brew for me!


  3. By the way Nowdy I wonder how leaking info to David Rossmiller fits 23-4-105(5)? The sleazy part of Harrell comes into full bloom with the rush to hang Dickie Scruggs. PPL down here with open cases suffered the results. The silence on Harrell and his new employer on both Yallpolitics and Folo tells the tale.

    You’d expect such from the corporate apologists at Yall. But the feds never needed State Farm’s help convicting Scruggs. The fact others were willing to bed with the Farm to indulge their personal grudges is most telling.


  4. Don’t forget the commissioner from Alabama who left office earlier this year for a very similar job.

    Frankly these insurance commissioner posts are excellent workforce development tools for insurance industry law firms and their lobbying arms. I’m not certain the taxpayers are getting much of a deal over the long run though.

    Policyholders were reduced to taking cold hose showers on wood pallets while the people supposedly on watch for the public at the time were all angling for industry jobs. Against this backdrop Sam Friedman wonders on his blog why the industry has such a bad name.

    The contrast in perspectives in most striking.


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