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Harris backed bill aiding Riscorp

But the Republican senator's campaign manager denies she gave Riscorp favorable treatment in exchange for campaign contributions.

By DIANE RADO

© St. Petersburg Times, published August 25, 1998


TALLAHASSEE -- Needing help in the state capital, Riscorp insurance company turned to a lawmaker they had helped with thousands of dollars in campaign contributions: Sen. Katherine Harris, R-Sarasota.

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Harris obliged, sponsoring a bill in 1996 to block Riscorp competitors from getting a greater share of Florida workers' compensation market.

She also pushed a proposal that would hurt a particular competitor.

Harris, now running for Secretary of State, has denied any favorable treatment toward Riscorp, based in Sarasota.

"She never gave more weight to one person or another because of campaign contributions," said campaign manager, Marc Reichelderfer. In fact, he said, Harris has also worked against Riscorp's interests since she became a state senator in 1994.

Today, Harris' relationship with Riscorp has been in the spotlight, caught up in a campaign finance scandal that has raised questions about the influence of money in politics.

Federal prosecutors say nearly $400,000 of Riscorp contributions to Harris and dozens of other politicians were illegal. Five Riscorp executives have pleaded guilty to felony and misdemeanor charges. Riscorp's founder, Bill Griffin, was sentenced to five months in federal custody earlier this month in connection with the scheme to reimburse his employees for the illegal contributions.

A week before the primary election, Harris is airing a television commercial that criticizes her opponent, Secretary of State Sandra Mortham, for taking "illegal contributions from insurance executives."

Mortham got $5,825 from Riscorp in 1993 and 1994, but she has since put that amount into a special elections trust fund that combats voter fraud. She also got $1,500 in legal contributions from companies associated with Riscorp.

In contrast, Harris got $20,292 in illegal contributions from Riscorp during her 1994 state Senate campaign -- more than any other legislative candidate. She also has put that amount into the special elections trust fund. Harris also received $13,000 in legal corporate contributions from various Riscorp companies, more than any other candidate in any race, federal records show.

Federal prosecutors described her 1994 campaign manager as one of the "co-conspirators" or "co-schemers" in an effort to hide the true identity of campaign contributors on campaign finance reports.

And a 1994 memo shows that Riscorp advised the campaign manager on how to change the addresses on Riscorp checks to keep the media from tracing them back to Riscorp.

Harris said she thought her campaign wanted different addresses for Riscorp checks because they preferred street addresses rather than post office boxes.

When she came to Tallahassee, Harris was appointed to the Senate's Banking and Insurance committee. That made it natural for Riscorp to approach her about legislation, said Gary Guzzo, a Riscorp lobbyist who asked for Harris' help in 1996.

Harris agreed to sponsor a bill proposed by the company that would eliminate certain price discounts that workers' compensation insurers can offer with approval from state regulators.

Guzzo said the discounts were largely used by out-of-state carriers who wanted a share of Florida's market.

The state Insurance Department had done a study on the issue, Guzzo said, recognizing that large deviations from rates set by the state could destabilize the worker's compensation market.

Pete Mitchell, chief of staff for Insurance Commissioner Bill Nelson, agreed Monday that the agency was concerned about the effect of large discounts, as well as the limited state guidance on when the discounts should be approved or rejected.

However, Mitchell said the department was not pushing Harris' legislation as part of its own legislative agenda that year. It did sign off on a compromise on the bill -- to freeze use of the discounts for a year, rather than eliminate them. Not everyone was happy with the change. After all, banning the discounts could also help Riscorp ward off competitors trying to get a piece of the market.

"They (Riscorp) only advocated things that put money into their own personal pocket," said Jon Shebel, head of Associated Industries of Florida, a powerful business lobby that also sells workers' compensation insurance.

Shebel himself was stung by a Harris move on behalf of Riscorp at the end of the legislative session in 1996.

At Guzzo's request, she sponsored an amendment that would have required Shebel and three directors of the workers' compensation business to undergo a public hearing to determine if they were fit to serve.

"Obviously, we were very upset with Katherine Harris at the time," Shebel said. He said she apologized to him, saying she didn't know the amendment was aimed at him specifically. The amendment was approved by the Senate but not by the House, Guzzo recalled.

Guzzo also said Harris has worked against Riscorp, including filing legislation against the company's interests in a Sarasota managed care operation.

"It is a very clear sign that whatever campaign contributions they gave had no influence," said Reichelderfer. Still, there is a general concern any time a legislator helps out a campaign contributor, said Sally Spener, of the public interest group Common Cause.

"The main reason that we have worked so hard for campaign finance reform legislation over the years is that we believe that campaign contributors have special access and special influence," Spener said.

 

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