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Riscorp ties still casting shadow over Gallagher

The fund-raising scandal follows him into the education commissioner contest.

By DIANE RADO Times Staff Writer

© St. Petersburg Times, published October 8, 1998


TALLAHASSEE -- No other politician has figured more prominently in the Riscorp campaign finance scandal than former Insurance Commissioner Tom Gallagher.

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A longtime friend of Riscorp insurance company founder Bill Griffin, Gallagher received more illegal campaign contributions from the company than any other political candidate.

Griffin hatched an illegal scheme to funnel contributions to candidates after Gallagher's campaign solicited money from Riscorp in 1990.

Now, Gallagher's ties to Riscorp have come back to haunt him as he campaigns for state education commissioner, the state Cabinet official who oversees Florida's public schools.

A Republican with high name recognition -- this is his fifth campaign for statewide office -- Gallagher has raised nearly $600,000 and spent only $107,000. His opponent, former state House Speaker Peter Rudy Wallace, has less than $50,000 after a Democratic runoff election last week.

But Wallace brought out his ammunition Wednesday, demanding that Gallagher "come clean on his involvement with an illegal campaign contribution scheme."

"The questions surrounding this situation are many," said Wallace, who urged Gallagher to waive confidentially and allow the release of any federal records that would show whether he or his staff were involved in Riscorp's scheme.

A judge would have to authorize such a release, an unlikely scenario because federal prosecutors have said their inquiry into campaign finance illegalities remains open. So far, no politicians who accepted illegal contributions, including Gallagher, have been charged.

Gallagher has said that he never testified before the grand jury that charged Griffin and four other Riscorp executives.

In August, Griffin got a five-month federal prison sentence for his part in the scheme to funnel $381,885 in illegal contributions to politicians and candidates who could help his insurance company in Sarasota. The other four executives pleaded guilty to misdemeanor charges and received lesser sentences.

In a written statement issued by his campaign, Gallagher said: "I am very disappointed that the education Commissioner's race has veered from legitimate issues and degenerated so quickly into a negative campaign. . . . I am committed to staying focused on what is important -- our children's education -- and I had hoped Mr. Wallace would do the same."

Regarding Riscorp, Gallagher said: "No one in my campaign, including me, had any idea that there were illegal contributions being given. This was confirmed by the federal prosecutor and reported widely in the news media."

Federal court records show Riscorp helped Gallagher in a variety of ways:

Riscorp and its employees gave $109,189 in illegal contributions to Gallagher's 1990 Insurance Commissioner's campaign and his 1994 run for governor. Of the 96 candidates Riscorp helped, no one got more than Gallagher.

Under Florida's public financing program, the illegal Riscorp contributions were used to get $21,250 in matching public dollars for Gallagher's gubernatorial campaign.

Riscorp reimbursed a consultant who provided $5,789 in services to Gallagher's campaign. Among other things, the money went toward Gallagher's flight time on a plane owned by Cocky McGriffin Inc., a Riscorp affiliate.

Riscorp affiliates also gave $4,455 in legal corporate contributions to Gallagher, as well $76,500 to Citizens for a Safe Florida, a political committee he helped form.

One legal corporate contribution for $5,000 also went to a "Peter Wallace Campaign Fund" in July 1994, according to the records. Wallace said he was unaware of any Riscorp contributions to his campaigns. He had no opposition for his House seat in 1994, and began his two-year term as House Speaker that November.

Griffin testified during his sentencing hearing in August that he was solicited for contributions when Gallagher was seeking re-election as state Insurance Commissioner in 1990.

Griffin said he met with Gallagher's campaign -- he didn't specify if Gallagher was there -- and agreed to pledge $100,000.

When fund-raisers didn't get him to that figure, he got employees to write checks and then reimbursed them in the form of "bonuses." Employees also could doctor their expense reports to get repaid, and the company would claim the reimbursements as business expenses on federal tax returns.

After Griffin's testimony, Gallagher said he did not personally solicit any contributions in 1990 because his campaign staff handled fund raising.

He met Griffin when he was a state lawmaker serving on the House Commerce Committee in the late 1970s, and Griffin was on the committee's staff.

News reports in South Florida newspapers have described a close relationship between the two men, who went skiing together in Colorado and watched Florida State football from a skybox Griffin rented.

In his news release, Wallace referred to reports that Gallagher's Insurance Department gave Griffin the approval he needed for a lucrative merger in 1994. Gallagher has denied that Griffin received any special treatment.

Gallagher told the Times after Griffin was sentenced that campaign contributors probably do enjoy special access to state officials.

"I think that a person who contributes probably gets access to people in the department quicker than somebody else," Gallagher said. "Good, bad, or indifferent, that is just a fact."

 

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