A View From The Press Box

Sam:

I was thinking about e-mails the other day.

“I know you disagree, but you are stuck on the shameless misbehavior all being pre-Cherkasky.To me, Spitzer dealing any differently or on more friendly terms with Cherkasky than he would any other exec is the most shameless misbehavior of all.

"The Caped Crusader, if he was half the man he pretended to be, should have bristled at the suggestion that he was anything other than even-handed in his dealings, and the hiring of Cherkasky was exactly that. Instead he picked up the phone, giggled with his buddy from the steam room and made nice. The message? Do as I say and not as I do.”

I sent you (Sam) this on 12-20-07…Once in awhile I get one right!

SAM RESPONDS:
For those who are uncertain about what David refers to, his reference is to the hiring of Mike Cherkasky as CEO of MMC after AG Spitzer's probes of bid-rigging at Marsh forced the company to toss overboard its then CEO, Jeff Greenberg. Mr. Cherkasky had worked with Mr. Spitzer when both were prosecutors, and reportedly had remained friends.

Take Care!!!

-David C. Wash

Sorry Sam, but I don't share the same sentiments for Mr. Spitzer as you do.

Mr Spitzer, by his own admission, "steamrolled" an entire industry and didn't worry about collateral damage to innocents when he did it.

He did this in order to obtain nothing more than the advancement of his political career. I for one hope the door hits him square on the ass on the way out.

I'm sorry that he has resigned.

Buying the sexual services of a willing seller at a mutually agreeable price is no more a moral issue than buying the services of a dental hygienist on similar terms. (Dental hygienists could be "expoited", too.)

It's a legal issue only because misguided moralizers have induced legislators to criminalize it.

Spitzer identified some REAL unethical and criminal conduct by insurance carriers and brokers, and had the moral force to do something about it.

I don't buy the argument that a lot of innocent small insurance agents have been unjustly harmed by the fallout from corrections of criminal conduct by some of the big boys. The very essence of the relationship between insurance carriers and their independent agents or brokers stinks.

It is conducive to corruption, which must inevitably break out regularly, because we are all weak, when the agents/brokers represent themselves as advocates of the buyer's interests while getting paid by the carriers--be that through "contingent" commissions or otherwise.

Independent agents and brokers ought to get paid by negotiating fees payable directly by the buyer for their services.

Make it illegal to take anything of material value from the carriers (unless they are actually company employees working exclusively for that one company).

That's "transparency"--no hidden kickbacks (Commission = Kickback).

They should get paid whatever the buyer thinks their services are worth, at the balance of supply and demand. Then there's no question of where their loyalties actually lie.

Sam, I can't add a thing to your comments. You nailed it.

And Mikk, you try selling insurance based on what many buyers are willing to pay you for it. Their hatred for the industry will guarantee you starve.

Transparancy as to what you are actually getting paid is what is needed and what we now have. All my carriers now show percentage commissions right on the proposal, and I have no problem telling anyone who asks.

And you are technically wrong when you say the companies pay us. It's the insured's money--they are paying us, even if it has to pass through the company first. I never forget that.

To Bill Lockhart:

What you are saying is that the only way you can get paid enough to make it worthwhile to be an independent insurance agent or broker is to have your fees hidden in a total premium number, and to get paid by a third party out of that sum, without the knowledge of the buyer.

If the premium were only the amount that the carrier required, and you had to negotiate your fee separately, you'd starve.

What does that tell you about how much the buyer values your services?

How many customers realize that they are paying you with a part of the premium they pay? How many ask you how much they are paying you? How often do you tell them even when they don't ask? I would guess "not many" and "not often."

Maybe a good first step would be not only to have your commission rate disclosed to you in the quote by the carrier (which you might or might not disclose to the buyer), but also to have it printed, both as a percentage and a dollar amount, on the policy as delivered to the buyer, too.

Then maybe on the next renewal, they can start talking to you about the amount of it.

Unlike you, Sam, I did not like Spitzer or his actions as soon as I heard of him.

I read a newspaper article the other day that referred to the things that Spitzer persecuted others for as "accepted industry practices." In fact, a judge threw out all charges but one for one individual broker, and that one conviction is being appealed.

Spitzer destroyed people's careers, dragged them through the courts and created negative publicity for them.

Well, karma does exist. Now Spitzer is on the other end of the stick.

Prosecute and persecute have the same Latin roots. Prosecuters should NOT be BULLIES. They should be respected ladies and gentlemen who pursue fairness and the truth with kindness and understanding.

Too many are like Spitzer. You are absolutely correct that poetic justice would be for him to share a cell with one of his victims. It might send a message to prosecutors to be good boys and girls.

As a small agent, of course I am happy to see Spitzer's demise. Just like any bully in the school yard, it was inevitable he would get what he had dished out.

My one regret is that his cohorts got off scott free. Without the pulpit, there would be no bully.

You indict yourself and the media when you say in your own column: "Mr. Spitzer...preferring to tar and feather targets and parade them before the court of public opinion..." I would think you would be feeling used and foolish at this point.

All of the unquestioning lemming journalists gave this out-of-control prosecutor his power. The media (including you) should get off your high horses and look in the mirror.

Whether its the Duke rape case or this man's misdeeds, justice has been short-circited. Is that tar and feathers on your hands, Sam?

P.S. And why are you not demanding Elliot be tried for breaking the law?

SAM RESPONDS:
It's always shoot the messenger! I would remind you, sir, of the motto of the Society of Professional Journalists: If the press didn't tell you, who would?

Let's keep one fact in mind--Spitzer is not McCarthy; he did not make things up. The smoking gun e-mails his investigations unearthed provided hard evidence of blatant, shameless bid-rigging and contingency fee abuse on the part of major brokers and carriers.

Second, I believe I said if there was any justice, he would be sharing a cell with one of those he prosecuted.....I am not exactly letting him off the hook. However, again, his crime was a personal one, affecting only his family and integrity. The crimes of those he prosecuted were against the general public.

PHILIP HAS THE LAST WORD:
Spitzer and the media were not interested in justice, just sensationalism for their respective ends--higher office and ratings.

Does the Society of Professional Journalists ever promote and encourage knowledge and truth? These things come from telling the full story, not just being a prisoner of the sound bite or headline.

In my opinion, what happened at Marsh took place because of regulatory failure first, followed by a failure in moral leadership and corporate ethics.

The Marsh model in purchasing J&H and Sedgwick was designed to exploit market dominance. Marsh paid blue sky prices to corner the market and then sought to extort higher margins to cover the buyouts.

Contingent agreements were not the problem--they were only the means. Even today, if the bigs could get in a similar position, they would attempt the same play, charging exorbitant fees. To indict the whole industry and system for the behavior of the bad apples is a travesty.

The shame of it is that Spitzer didn't try his cases. If he had been a prosecutor rather than a self promoter, the guilty, the innocent and the uninformed would all have benefited from the process. That assumes the media would tell the whole story, Sam.

Your column was very good, Sam, but I wish it did not have to be written.

Not just is it a tragedy for public confidence in our elected officials, and especially those who have been entrusted with guarding our laws, but it is foremost a personal and family tragedy.

But, two items I had issues with are:

1. No doubt some, but I am not sure if many in our industry are dancing with glee over this. Yes, he hurt our image by exposing wrongdoing, but there are many ethical people in our business who have deep pride in their work and the industry. Just because our industry could use a better public image is not a reason that many of us would actually resent exposing insurance corruption.

2. "He should have known better than to scam the financial system to pay for call girls." When I first read this it sounded like an insinuation that he is guilty of some money crimes, too, and maybe he will be convicted, but I would favor innocence until proven guilty.

But re-reading this, I think your intention is to point out that he was so smart catching people, yet so dumb himself in his sneaking around.

I had an opportunity to recently review your March 17 column in NU regarding the former governor of New York.

You appear to have a deep respect for Mr. Spitzer’s efforts while acting as New York attorney general General with regard to taking down the "bad guys" of the insurance industry, but you never mentioned how he hurt the American Agency System by forcing many insurance carriers to eliminate legitimate contingency agreements.

Unlike the common misperception perpetuated by those in the media, the contingency agreements that I am referring to were legitimate profit-sharing agreements, not the same agreements that Marsh or Willis received.

Those particular firms were receiving compensation for rigging bids, yet when all was said and done, Mr. Spitzer categorized them as contingencies and in turn my firm was punished under the same banner that the criminals were.

No one ever accused my firm of any wrong doing, yet in the end Mr. Spitzer essentially set out to punish me when he included me in the same pool as the large national brokers that were guilty.

In the end I guess I am one of those guys sitting up there in the peanut gallery who understand how his zeal to do a right hurt so many of the innocent.

Spitzer was reckless in his pursuits and I am not ashamed to admit that I am very happy to have him removed from power.

Supporting him is like saying that the policeman that shot and killed 10 people to get to the one bad guy was justified.

I would have preferred a long, drawn out trial of the guilty. At least justice would have been served and the truth would have been spread throughout the media. It would have been a clean decapitation of the ills of our industry vs. his bullying approach.

The long and short of my argument is the fact that tar and feathering the industry received by Mr. Spitzer was essentially his way of expediting his road to the governorship.

Trials didn’t fit into his political timeline--now we are all paying for it.

The next time you want to support vigilante justice, please make sure that it affects your bottom line, Mr. Friedman.

I took issue with Gary Wolcott's Spitzer piece from your March 24 edition (posted on your blog on March 26 as well). He was nice enough to expand his thoughts and we reached common ground.

But, in a curious twist of fate, your March 17 issue reached my desk after the March 24 edition, featuring this blog posting here.

Your take on the Spitzer affair seems to be that he was the caped crusader all his life and did all these wonderful things you list.

But, like another "good" man, Bill Clinton, he lost his focus by not keeping his fly zipped up on government payroll time.

I do believe that is a horrible thing for a family man to do. To have made his wife and THREE YOUNG, IMPRESSIONABLE DAUGHTERS stand with him in front of the cameras so they could share in his degradation, is the latest show of force for a truly sick and corrupt mind.

But that is not why I condemn him. He, by his own admission, was always and is, just another cheap, bullying thug. He grossly broke every law of judicial jurisprudence by any means at his command.

He tried insurance company officials in the press, slandering them until their stock value fell, resulting in their dismissal without a trial.

Then he forced those same companies to hire who he demanded (the fact that they couldn't do the new job and continued the damage didn't concern him).

If you got in his way, then he tried you in the press hoping to damage your company (see the Wall Street Journal feature over that one).

His whole public service duty was a lie. He didn't make things better, he made them worse for everyone else in the industry.

Almost none of his real trials resulted in convictions. But he sure ruined a lot of people while the press was ecstatic over the coverage.

What this comes down to is: the end justifies the means mentality. And the refutation of this methodology is what separates Western culture from the Hitlers, Stalins, Pol Pots, Mussolinis and, yes, the Clintons of the world (the Tuzla walk-a-thon in Bosnia).

Well, I refuse to swallow the Goebbels "Big Lie." I refuse to to go along with "a lie told often enough becomes the truth" (Stalin).

I refuse to "go along" with the theory of Stalin's dictum that in order to make an omelette, ya gotta break a few eggs when those "eggs" are living people with families.

Spitzer was no better, and probably worse than most of the people he went after.

We deserved better. And we deserved a better press that should have seen this.

Unfortunately, the free press gave him a free pass for his whole career. You should have done better. Shame on you.