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State-run insurer drops contractor

Quantum Claim Services is at the center of charges of paying kickbacks to Citizens' former chief operating officer.

By JONI JAMES
Published December 29, 2005


TALLAHASSEE - Three months after allegations erupted that one of its top executives took kickbacks from a contract vendor, Citizens Property Insurance Corp. has dropped the vendor.

Citizens Property abruptly terminated Quantum Claim Services' contract last week. The Texas adjuster's last day on the books was Friday.

Citizens spokesman Justin Glover said the decision "was based on Citizens' current operational needs and the ongoing investigations." He did not elaborate.

The move came as Citizens executives met last week with legislative auditors investigating the state-backed insurer, which provides coverage to property owners who can't find it in the private market. Federal and state officials are conducting a criminal investigation.

Quantum's owner, Rod Harrell, told his employees in a memo dated Dec. 21, "I don't understand why we are being released ... I am sorry for the short notice however this decision was sent to me late yesterday evening via email."

Reached by phone, Harrell said he was not clear why his firm had been released and referred questions to his attorney, James Parkman of Dothan, Ala., who could not be reached for comment.

Another adjusting firm, Universal Risk Services, alleged in September in a Texas lawsuit that Harrell paid kickbacks to Citizens' former chief operating officer, R. Paul Hulsebusch, in exchange for winning heftier contracts to work Citizens claims during the 2004 hurricane season. Among the alleged payments: a $28,095 Big Dog motorcycle Harrell bought for Hulsebusch.

In an interview with Gannett News Service published Sunday, Hulsebusch claimed the motorcycle wasn't a kickback but was a payment for contracting work he had sold to Harrell. He said Harrell also bought a Ford pickup truck for him this summer as part of the same deal.

Originally hired as a consultant for Citizens, Hulsebusch told Gannett he sold his outstanding Citizens' contracts to Harrell after he began overseeing Citizens' claims processing because his bosses had told him it was a conflict of interest. He said he didn't realize the transaction might run afoul of laws governing government employees.

[Last modified December 29, 2005, 01:00:08]


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