Oklahoma Politics: August 2010 Archives

UPDATE: midnight, 2010/08/25. Nearly 120,000 Oklahoma Republicans voted in the runoff, and 70% of them voted for John Doak. Congratulations to Mr. Doak and the Oklahoma GOP. This year's turnout is only slightly lower than the 2006 runoff, which was dominated by the high-profile, expensive and fierce runoff for Lt. Governor between Scott Pruitt and Todd Hiett.

(Turnout was up almost 10% in the 5th Congressional District runoff. About 42,000 voted in the 2006 runoff between Mary Fallin and Mick Cornett, while about 46,000 voted in this year's James Lankford vs. Kevin Calvey bout. Fallin beat Cornett 63-37. Lankford beat Calvey 65-35.)

There's always the danger, in a minor election especially, that people will vote for someone with a familiar name. That's a problem if the name is familiar for the wrong reasons. How else can you explain a first place primary finish for John Crawford, the former Oklahoma Insurance Commissioner who was the subject of a federal corruption investigation.

James L. Harlin (FSA, CLU, ChFC, FLMI, MAAA) was an informant to the FBI during its investigation of John P. Crawford during his term as Oklahoma Insurance Commissioner from 1995 to 1999. Last week, Harlin spoke to the Oklahoma Conservative Political Action Committee (OCPAC). Charlie Meadows, OCPAC chairman, sent Harlin's statement out to his email list. (If you'd like to subscribe to the OCPAC's weekly email newsletter, send a note to Mr. Meadows at charliemeadows7 at gmail dot com.)

Harlin alleges that Crawford, as Mid-Continent Life actuary, created an actuarially unsound insurance product, then, as Insurance Commissioner, interfered with the sale of the company, abused his power to seize the company, destroyed the company and hundreds of Oklahoma jobs, and deterred other investment in Oklahoma by an outside company; Crawford's official actions, according to Harlin, convinced them that Oklahoma was a corrupt backwater of cronyism.

Oklahoma Republicans need to show up at the polls today, August 24, 2010, and vote for John Doak for Insurance Commissioner. Doak has strong industry experience, is a conservative, and has a sterling reputation. He will be a strong standard-bearer in the November election. Crawford's name on the ballot would not only kill our chances of having a pro-life, anti-Obamacare Insurance Commissioner, but it's likely to stain the entire Republican ticket.

Here is Mr. Harlin's statement:

John Crawford & Mid-Continent Life August 18, 2010

Purpose

To share my direct experience with John Crawford when he was Insurance Commissioner. To defeat Crawford in the primary runoff August 24 because there is a strong chance that the Republican nominee will become the next commissioner.

Opening

There are numerous examples of John Crawford's incompetence, cronyism and corruption. These include his weak credentials as an actuary, channeling money to his son in a dubious technology scheme, having his chief of staff raise campaign funds while on the payroll of a company he illegally seized, FBI investigations, etc.

MCL

However, I want to focus on Mid-Continent Life Insurance Company. MCL was the oldest insurance company incorporated in the State of Oklahoma and was formed by the Stewart family around the time of Statehood.

MCL operated successfully for over 70 years in the traditional life insurance business.

In the late 70's a group of MCL managers designed a new product called "Extra Life" that tried to take advantage of the hyperinflation and inordinately high interest rates caused by the financial mayhem created by the Carter administration. That mayhem is being repeated today by Obama... but that's a story for another day.

The actuary for MCL at the time this product was created was John Crawford. He certified the financial strength of the company, the integrity of the dividends, and the pricing of the products. He did this certification every single year up until 1986. He did this even though the economic circumstances changed during the Regan years to the point that the dividends and the pricing of the product were no longer sustainable.

In 1987, Florida Power bought MCL. Seeing Florida Power's financial resources, Crawford decided to increase his fees tenfold. At this point Crawford was summarily fired.

In the early 90's Crawford ran as a Democrat for congress (I remember meeting Crawford at the park in Crescent on the fourth of July when he was running) and lost. In 1994 he switched parties and rode in on the coattails of Gov. Keating to become the insurance commissioner.

A new management team arrived at MCL in 1995, 18 years after the "Extra Life" product was launched. Within 3 months this new management team discovered the problem of unsustainable dividends and pricing in the product. The management team laid out a course of action to correct the problems in order to maintain the solvency of the company. In 1996 the point was reached of needing to cut the dividends and raise the rates. This plan was contractually allowed within the provisions of the policy and was later judged by the court to be the proper course of action.

In early 1997, as a standard of protocol, the management team presented the plan to Crawford in a confidential meeting. Four days later MCL's President received a solicitation along with an offer of a bribe from a friend of Crawford's to channel the company to him (the friend) in conjunction with Crawford's support. The MCL President refused and reported the incident to Florida Power officials.

Two months later, Crawford abused his power as commissioner to seize the company. He demanded that Florida Power pay millions of dollars to cover up the financial shortfall that he had mishandled when he was the company actuary. Statements from people at the time of his firing showed this was Crawford's way of getting retribution against Florida Power.

Crawford removed the entire MCL management team and proceeded to try to prosecute them and their lawyers even though none of them designed the product or certified to the financial integrity of the company for the nearly two decades prior to their arrival. That prosecution was ultimately dismissed for lack of evidence.

Each member of the MCL management team went on to establish very successful careers. The President became the Chairman, President & CEO of Chase Insurance, the largest bank insurance enterprise in America. MCL's general Counsel became the General Counsel for the National Association of Insurance Commissioners. He now oversees the legal framework for the entire U.S. insurance industry for every state in the country. The Chief Actuary is now the Chief Actuary of the largest TPA in America. The Chief Financial Officer became the CFO of a large Oklahoma company. The marketing officer became the President of several international insurance companies. This was a superb management team with outstanding credentials and an impeccable record of performance excellence.

Because of John Crawford, MCL no longer exists. Hundreds of Oklahoma jobs were lost. The insurance industry considers Oklahoma a "backwater" for doing business. Florida Power had an opportunity to invest $500 million in a power related industry in Oklahoma. They passed on this investment because of their treatment by Crawford and his cronies. The MCL President had first-hand knowledge that Florida Power shared their dim view of Oklahoma with many of their Fortune 500 friends.

So bottom line, all the headlines of corruption, cronyism and incompetence surrounding John Crawford are vividly real. Oklahoma consumers, the insurance industry, and Oklahoma businesses cannot afford a repeat of Crawford as Insurance Commissioner.

It is imperative to defeat Crawford in this primary runoff on August 24.

Here are Charlie Meadows's comments on the Doak-Crawford runoff:

John Doak has a great deal of experience in a variety of levels in the insurance industry. He is a solid conservative and I believe a man of high moral character and integrity which is a most important qualification for this office. The insurance commissioner has enormous regulatory powers over both small and very large businesses and as such the person must be above reproach. I believe his opponent, John Crawford to be corrupt, a charlatan and an opportunist. He was the first Republican elected to this position on the coat-tails of Frank Keating's election to governor. During his one term in office, before voters sent him packing in 1998, his office was under numerous allegations of fraud, nepotism, mismanagement and corruption.

The liberal Democrat Incumbent Kim Holland really wants John Crawford to become the nominee as she will have a field day bringing up all those very serious allegations from the past. She will have a difficult time defeating John Doak, but Crawford is so bad, I will even vote for Holland over Crawford if he is the nominee as the Republican party can not afford to put a suspected crook in office with a "R" by his name.

For all Oklahoma Republicans and for some Democrats around the state, there's a runoff election next Tuesday, August 24, 2010. Early voting at county election boards across the state began on Friday and continues Saturday, August 21, 2010, from 8 a.m. to 1 p.m. and Monday, August 23, 2010, from 8 a.m. to 6 p.m.

The runoff is to decide party nominees following a primary in which no candidate received 50% of the vote. There are only 11 nominations for federal, statewide, and legislative offices to be decided on Tuesday. (Runoffs for non-partisan judicial races will be held in November.)

Republican runoffs:

U. S. House District 2: Daniel Edmonds, Charles Thompson
U. S. House District 5: Kevin Calvey, James Lankford
Insurance Commissioner: John Doak, John Crawford
State Senate District 44: Ralph Shortey, James Davenport
State House District 27: Josh Cockroft, Richard Bennett
State House District 100: Elise Hall, David Looby

Democrat runoffs:

State House District 3: James Lockhart, Matt Webb
State House District 18: Carolyn McNatt Hill, Donnie Condit
State House District 21: Jerry Tomlinson, Nathan W. Williams
State House District 66: Eli Potts, Andrew Thomas Williams
State House District 86: John Auffet, William T. Will Fourkiller

The only runoffs for Tulsa County voters are for the Republican nomination for Insurance Commissioner and the Democrat nomination for HD 66.

I'm supporting John Doak for Insurance Commissioner, and I urge my fellow Republicans to do the same. Doak, a Tulsan, has been an insurance agent and an insurance executive, in the business since graduating from OU in 1988. Doak has been endorsed by many prominent Oklahoma Republicans, including former Sen. Don Nickles, State Sen. Randy Brogdon, Tulsa County Assessor Ken Yazel, and Corporation Commissioner Dana Murphy, who writes:

The office of Insurance Commissioner is extremely important to our state. The Republican Party and the citizens of Oklahoma are best served with John Doak, who is passionately pro-life, as our nominee. He has joined a federal lawsuit against Obama Care and is the insurance commissioner candidate who best represents Oklahoma values. Through John Doak's experience with his daughter, who is the survivor of three open-heart surgeries, as well as his outstanding professional experience in the insurance industry as both an agent and executive, I believe he truly understands consumers' needs as well as the business aspects of the insurance industry.

Here's Doak speaking at the Muskogee Tea Party Voter Education Rally on July 2:

And an ad that aired before the July primary:

I heard Doak speak at the candidate forum sponsored by the USA Patriots. He was a very impressive and dynamic speaker, and he won over the audience.

Doak's opponent is John Crawford. Crawford was elected Insurance Commissioner in 1994 but was narrowly defeated for re-election in 1998 by Carroll Fisher, who left his own personal stain on the office.

Crawford's final year in office was overshadowed by a Federal investigation into whether he misused his office to the benefit of a company connected with his son:

In 1998 the Daily Oklahoman reported Crawford was the target of an FBI investigation into alleged fraud and nepotism regarding computer contracts he awarded on behalf of Enid-based insurance company American Standard Life & Accident Co. The FBI probe focused on allegations Crawford's son, the late John P. Crawford III, profited from the contract.

American Standard Life was declared insolvent and placed in receivership in 1991. When Crawford became insurance commissioner in 1995, he became responsible for either the rehabilitation or dissolution of the Enid insurance company. The liquidation of American Standard was ordered in October 1997 in Oklahoma County District Court.

In 1995, while under Crawford's control, American Standard allegedly entered into a $60,000 contract with a Nevada firm, Advanced Computer Technology Inc., a company whose registered agent was "John P. Crawford," the Oklahoman reported.

The investigation was dropped without charges against Crawford. Key Insurance Commission documents regarding the contract had gone missing, and John P. Crawford III committed suicide in January 1998.

Crawford jumped into the 2010 campaign on the last day of filing, apparently with no previous announcement of his intention to run. Crawford reused a 1998 TV ad featuring a general election endorsement from Jim Inhofe. While the ad's run on Cox Cable may have been a mistake, blogger Jamison Faught has his doubts:

While this may be the case, it does not explain why the Crawford campaign knowingly placed the ad on YouTube and on his website. A Cox employee might have mistakenly aired the wrong commercial, but they could not have edited his website. In addition, the ad was re-worked to include a "paid for by" disclaimer reflecting his 2010 account, so some work had to have been done on the ad before running it, and I find it hard to believe that Cox did not ask for approval on the re-worked edition.

Right before the primary, I received a couple of strange form letters in support of Crawford, similar in appearance to one another, one from a gun rights group that I'd never heard of (signed by political consultant Kirk Shelley) and one from an individual I'd never heard of. It made me wonder just who is in the shadows backing Crawford's run.

The person who will most benefit if Crawford wins the runoff: incumbent Insurance Commissioner Kim Holland, a Democrat from Tulsa. Many Republicans would have difficulty backing Crawford because of the questions about his stewardship of the office, and you can expect that Holland's campaign and the media will call attention to Crawford's history.

In John Doak, we have a Republican candidate for Insurance Commissioner with a truly squeaky clean record, a long history in the insurance business, and the energy and message to win the office in Novermber. Please join me in voting for John "Okie" Doak.

That page about Oklahoma's "Blaine Amendment" (linked by Brandon Dutcher, regarding school vouchers vs. tax credits) had an interesting summary of an Attorney General's opinion:

1984 Op. Atty. Gen. No. 227. ("Funds raised by or through a public trust organized under 60 O.S.1981, § 176 that do not come from the public treasury are not 'public money' and not subject to Article II, § 5 of the Oklahoma Constitution.").

Title 60 trusts are everywhere in Oklahoma government. They exist in part as a way to bypass constitutional limits on government contracting.

Although OSCN has Attorney General's opinions online, I wasn't able to find the one mentioned.

This is just a brief note to self to see what I can learn about this.