I’ve been on the phone with several friends in the money management and insurance business regarding our picks for Comptroller and Treasurer.  

Was the Justin Wilson-Ira Brody life insurance plan illegal?  Uhmmm….from what I gather: no…but highly questionable and definitely stretching the limits of ethical boundaries.  Folks in the business who know Brody know that he is extremely bright, but that in this particular economic environment and the fast money/Wall Street backlash, his ideas would be in their view, a bit risky for the management of state funds. 

Some questions that my friends in the business have raised regard the disclosure of possible personal gains. These type of sales are generally commission rich, that is, for the first year premium, the cut would be 30% to upwards of 70% of the initial premium per employee.  From there it drops dramatically, but nevertheless, did Wilson and Brody disclose any personal gains or financial benefits of the proposed plan?

Another friend said, “Who, Ira Brody?  I can’t recall much, but try doing some research on attorney Norm Taplin and some insurance questions in Oklahoma and North Dakota.”  Heck, on my first internet search, I discovered this information:

People have been bilked out of hundreds of millions of dollars through viatical settlement industry scams.  If you Google the words “viatical” and “scam” or “viatical” and “fraud,” you’ll eventually come upon stories about Florida Democrat Bill Nelson, who found himself embroiled in the middle of a viatical settlement scandal (read this, for example).  In 2006, Oklahoma’s former Insurance Commissioner, Carroll Fisher, was sentenced to 3 years in prison and a $20,000 fine for his involvement in a number of issues, some of which appear to have involved, on some level, the viatical settlement industry.  It looks like before his criminal conviction, Fisher apparently played ball with some in the viatical industry , too.  This industry is not a universally clean industry by any stretch of the imagination.   

Over the past 3 or 4 years, North Dakota’s Republican Party and Jim Poolman have been cozying up to one little corner of the viatical settlement industry.  From all appearances, they specifically have been cozying up to the folks at one company:  InsCap.  The publicly accessible money trail between the viatical people and North Dakota’s Republicans appears to start in 2004, when Norm and Jay Taplin, two lawyers in Florida whose office does work for the viatical settlement industry, started making contributions to the NDGOP.  The West Palm Beach duo — with no other obvious connection to North Dakota — contributed $4,500 to the NDGOP in 2004 and another $1,500 in 2005.  If you do a little digging online about the Taplins, you’ll find that Norm Taplin was sued for his alleged involvement in an alleged viatical-related Ponzi scheme in Florida.  It is reported that Taplin personally paid out $125,000 to get out of the lawsuit.  [His law firms malpractice carrier paid out another $6 million, according to the Law.com story.]

and this:

In 2006 — a year when Jim Poolman wasn’t even running for office — a “Sara Bachrach” contributed $25,000 to Jim Poolman’s political campaign.  The same year, an “Ira Brody” made a $15,000 contribution to the NDGOP.  Bachrach and Brody shared the same street address.  Brody is an executive at InsCap, the big company that does viatical settlement work of the type most benefitted by Poolman’s back-room handywork.  That’s $40,000 from one New York household.

This stuff is somewhat complicated and, to some, is probably incredibly boring, but it’s not impossible to understand.  The bottom line is this:  Poolman proposed what many in the industry perceive as being a big favor for one corner of the viatical industry, namely this InsCap company that has had its people pump money into Poolman’s campaign committee and the North Dakota Republican Party.

But the story doesn’t end there. 

During the 2007 legislative session, Poolman ushered his new pro-InsCap viatical settlement legislation through the North Dakota legislature.  (I don’t remember hearing anything about it during the session.)  InsCap got what it wanted from North Dakota.  It got a law that pretends to protect investors from STOLI viatical scams, but that — according to many — doesn’t because it leaves open the InsCap loophole.  

Just head over and read the entire piece.

I’ll continue working on this, but I suggest for the benefit of our state and my party, others start doing the same.  I’m not making any claims that Mr. Brody is a crook, though Justin Wilson was content to WORK for a crooked administration and won’t disavow the criminality, but I am raising a host of questions that definitely need answering.

In doing research, the Nashville City Paper reported on the company back in December here.

In talking with some folks about Brody, they tell me he is a great guy.  To be clear, I’m not casting any personal aspersions.  But we have to be very concerned when he can’t give some straight answers.  Check out the latest here.