Death Is The Health Of The State
Posted on January 9, 2009 at 7:19 amFirst time, I ever saw a preacher he said to me, “Son, There’s something strange about you. You’ve got something to do with death.”
Being real young I believed him. Turned out he was right.
~ Napoleon Wilson in Assault on Precinct 13 (1976)
Investigative reporter Phil Williams uncovers a scheme, hatched by one constitutional officer candidate and sold by another, to buy life insurance on state employees without their consent with the intent of enriching the state:
[T]ax watchdog Ben Cunningham was stunned by documents — first obtained by NewsChannel 5 Investigates — that detail an investment concept, by one estimate, approaching $7 billion dollars.
It pushed by a company in which Brody is now a partner. To sell it, that company hired Justin Wilson as its lobbyist. Wilson is the top contender for comptroller — in essence, the state’s budget cop, looking over the treasurer’s shoulders.
(State records show Wilson was then registered on behalf of Blue Water Capital LLC, which later became Lilac Capital LLC, then Inscap Insurance Services LLC. Brody is a partner and chief operating officer of Inscap.)
“It is absolutely essential that we have total confidence in whoever takes these positions,” Cunningham said. “For them to have proposed a scheme like this is just … outrageous.”
The documents show that Wilson, acting on behalf of Brody’s company, wanted the state’s retirement plan to do this: buy life insurance on certain older retirees, as much as a half million dollars each. Then when they died, the money would go back to the state.
His presentation notes that it would necessary to do it “without first obtaining the consent of each insured” person — a concept state employees find appalling. (Read Wilson’s proposal.)
“It’s benefiting from death,” said Jim Tucker of the Tennessee State Employees Association. “Without the knowledge and consent of the person, I just think it’s just horribly wrong.”
It was a complicated financial transaction that would have required the state to:
* issue up to $7 billion in bonds (other estimates put it as low as $1.4 billion)
* then use that money to buy a type of life insurance — called an annuity — that makes periodic payouts
* then take those payouts to pay for term life policies from another insurance company.
* When the retirees died, the money would go back into the pension fund.
SEE ALSO:
Tiny Cat Pants
Matthew Hurtt
Sean Braisted
Comments
4 Responses to “Death Is The Health Of The State”
[...] I point you to this post over at Mr. Tiny Pasture’s? It turns out that Wilson has been a major part of a scheme to lobby the state to buy life [...]
Justin is morally bankrupt and a partsian hack. Of course, B Ho, Robin and “the Rep” love him. P.S. He also tried to push an income tax on TN (what a winner!)
It should be noted that to do this, the state would have to give itself permission to do something that it prohibits private individuals from doing. Generally, a person may not buy life insurance on someone else’s life, unless the buyer has an “insurable interest.” Spouses, children, and sometimes employers of “key employees” are examples of those having an insurable interest, meaning that their financial well being is impacted by the death of the insured.
Early in the 20th century, it was somewhat common for people to speculate in insurance by buying policies on the lives of people they did not know — some famous actor or actress or just someone who lives in the community, for example. This rightly came to be regarded as disreputable and was prohibited under the laws in most, if not all states.
The Texas legislation referenced in the materials would have gotten around this by declaring the state to have an insurable interest. Well. It’s criminal for everyone else, but acceptable for the state?
[...] It should be noted that to do this, the state would have to give itself… [...]