Citizens settles lawsuit alleging bribes to exec

Published January 20, 2007

TALLAHASSEE - A Texas lawsuit that spawned a federal investigation into Citizens Property Insurance Corp. in the wake of the 2004 hurricanes has been settled by Citizens for just under $1-million.

Universal Risk Insurance Services of Houston, an adjuster hired to work 2004 claims, has received $950,000 from Citizens in exchange for dropping its lawsuit, which claimed the company was unjustly fired from its contract. The Houston firm sought up to $3.6-million in lost, past and future profits.

Universal's 2005 lawsuit included explosive allegations that the Citizens executive who hired Universal took bribes, including a boutique motorcycle, in exchange for doling out Citizens' adjusting work to other companies.

Universal president Joe LeBrun contended he was cut out of Citizens work when he refused to give kickbacks to Citizens' then-chief operating officer, R. Paul Hulsebusch, who resigned two days after the bribery allegations surfaced.

"It wasn't good for the taxpayers of Florida to keep having to pay this bill," LeBrun said Friday. "I got what they owed me. It covers all my expenses plus what they owed me for work from the 2004 storms. There's not much left over."

Citizens officials, who acknowledged no liability in settling the case, said senior staffers made the decision on the advice of legal counsel that it would be cheaper than litigating the matter. Individual board members have been informed of the decision, said Perry Cone, Citizens general counsel and senior vice president.

Gov. Charlie Crist said he hadn't heard of the settlement, but that he was comfortable with it. During the Legislature's special session this week, he is seeking to expand Citizens to function more like a private insurer and sell homeowners policies statewide. Crist is among four state officials who appoint Citizens' board members. Last year, as attorney general, he joined lawmakers in pushing legislation to toughen ethics requirements for Citizens' employees.

"We all agree that it was bad," Crist said Friday. "Does anybody disagree with that?"

In the settlement, Citizens reserved the right to pursue restitution against the other defendants in the case, including Hulsebusch and the individuals who were alleged to have bribed him, should they ever be prosecuted by a state or federal authority.

"And we will do that if we have the chance," said Citizens board member Carlos LaCasa, a former state representative from Miami. A federal grand jury was convened in the case in December 2005, but the U.S. Attorney's Tallahassee office declined again Friday to discuss the investigation.

Hulsebusch couldn't be reached for comment.

The allegations in Universal Risk's lawsuit in September 2005 proved a watershed event for state-run Citizens, which already was reeling from customer outrage over its sluggish claims performance in 2004 and 2005.

The company added tougher standards for vetting job candidates; adopted a more stringent purchasing policy for any contract over $25,000; set new employee ethics standards; and accepted the resignation of its longtime, politically connected general counsel. Then a 250-employee company totally overwhelmed by eight hurricanes in two years, Citizens now has a staff of 800.

Joni James can be reached at jjames@sptimes.com.