Taxpayers deserve a full accounting of the abuses legislative auditors are uncovering in the finances of Louisiana Citizens’ Property Insurance Corp. and two related entities. But detailing the problem should be only the beginning.
Any executives and state employees who broke the law need to be aggressively prosecuted, and it’s encouraging that U.S. Attorney Jim Letten is taking an interest in the case. The state also needs to do what it takes to recoup money paid for illicit expenditures, as Treasurer John Kennedy and state Rep. Karen Carter are urging.
The findings by Legislative Auditor Steve Theriot’s office are jaw dropping. With only a partial audit, his office found numerous instances of alleged fraud at Citizens and at the Property Insurance Association of Louisiana and Louisiana Automobile Insurance Plan. Employees at the three entities spent more than $1 million between 2004 and 2006 on meals, travel and entertainment, in many cases in possible violation of state and federal laws, the auditors concluded.
No one spent as much as Terry Lissota, former head of the agencies, who racked up more than $264,000 in expenses. Those included gems such as $1,219 to buy his wife air tickets to Bermuda and New York and $3,227 for New Orleans hotel rooms for his daughters and himself during Carnival 2005. When one of Mr. Lissotta’s daughters needed help meeting her cheerleading squad fund-raising goal of 200 Zephyrs baseball tickets, daddy used public funds to buy 100 tickets, the report says.
Mr. Lisotta, however, was not the only executive who saw the public treasury as his personal piggy bank. LAIP board members spent almost $49,000 in meetings in Sandestin, Fla., for “bonding, socializing, and strategizing.” Even workers in the information technology department used public money for personal purposes, the auditors found.
Officials at LAIP and PIAL argue that whether they are in trouble or not depends on whether the two entities are treated as public or private bodies. Mr. Theriot and Attorney General Charles Foti have said the entities are public. PIAL is challenging that in court.
But even if these were private entities, their expenses were bankrolled by taxpayers — and taxpayers are paying for Citizens’ post-Katrina bailout.
The audit’s findings are so egregious that even one of PIAL’s attorneys admitted that some of the expenses would likely be questioned whether the organizations are public or private.
Legislators and prosecutors need to get to the bottom of this. And if the law was broken, somebody better get some prison time.