“SHOULD COUNTY JUDGE LOYD NEAL’S “INSURANCE CONSULTANT” (and longtime business partner) Be Employed Full-Time?” – this very suspicious question is being asked.
Nueces County, TX -- A verbal exchange transpired between County Judge Loyd Neal and Commissioner Chuck Cazalas last week (Thursday, August 5) during a meeting of the County Commissioners Court. The commissioners were discussing cutting the budget. The significance of this exchange is that it hints at political corruption. It seemed to be more than just a Freudian slip so to speak, but a resolute charge underlining how how County Judge Neal is abusing the political power entrusted in him by voters. How he is, presumably, extracting from public resources and utilizing it to accumulate for private enrichment and/or a business advantage, and signals that such ploys have surface as a result of lack of transparency.
What is political corruption? It can be defined as "the abuse of public authority and power for private benefit". The corrupt motive usually is wealth, status and/or power, or more specifically it is more about self-service than public service. It is about self-enrichment, and power preservation. The consequences of such political behavior is (in the long run about) institutional decay, arbitrary power, authoritarian tendencies and reduced liberty.
To return to the crux of the article: During the verbal exchange on Thursday, August, 5, County Commissioner Cazalas referred to Insurance Consultant Thomas Duran (Neal’s longtime associate and insurance business partner), who appeared on the budget payroll as “Neal’s (Insurance) Consultant.”
County Judge Neal, who has some 44 years in the insurance business in the area, fired back by saying, “He is not ‘my’ consultant, but the ‘county’s consultant.’” Cazalas, whose blood-ridden face turned a cherry crimson, returned fire: “Yeah! Right!”. This exchange occurred during the discussion of budgetary cuts Thursday after the commissioners reviewed a two-page list of proposed spending cuts.
Neal tried to justify his specious recommendations to cut $1.4 million in spending and keep the tax rate at 35.5 cents per $100 valuation. He claimed it would be a way to avoid raising taxes in a manner that would anger the community. Commissioner Cazalas’ rejoinder was a skeptical one: “Yeah, right.” When all was be said and done, Neal’s budgetary cuts and increases were perceived as a protracted planned subterfuge; it was exposed by some of the commissioners. Even Commissioner Mike Pusley, who is Neal’s top supporter on the commission was clearly disenchanted, and asked: “Why can’t he take a pay-cut (referring to Neal’s former business partner Duran who appeared on the county’s payroll) if we are asking all the other employees to do so?”. Neal insisted that Duran deserved every dollar he was being paid.
Neal said Duran – who is working for the “county” supposedly to advice them on the route to decide on which route to take with their “group health insurance.” [Note 1: Some suspect that Duran – who has a reputation for lobbying and pushing for what is known to be ‘Self-Insured’ or “Employer-Funded Group Health Insurance plans, as opposed to ‘Fully Insured” plans (and who has worked closely with Neal in the past) was hired to help put a process in place that benefits Neal’s scheme for his favored (Employer-Funded) health insurance type dominate in the county]; [Note 2: “Fully-Funded” plan is when an insurance company covers catastrophic losses; “Employer-Funded”, when Employers do.]
Clarrisa Gonzalez, who is a candidate running against County Judge Neal, said: “Why is Tomas Duran being hired full-time when an ‘Insurance’ consultant usually is only hired for a short span of time until the course for deciding on a group insurance plan is laid out?”
Ms. Gonzalez added: “This does not seem right with this picture. The matter needs to be looked at more seriously.”
A brief history: Neal’s and Duran’s business relationships dates back many years. In fact Neal, when he was first elected Mayor of Corpus Christi back in 1997, received a reputation in town for having brought in the first controversial Self-Funded (or Employer-Funded Health Insurance) program in the county. Neal sold one to Sam Kane Meat Processing. Duran was his business partner back then (they worked for the same insurance company that runs by the name of ENTRUST). During his mayoral tenure, Neal conveniently introduced the City of Corpus Christi to this “Self-Funded” insurance plan and brought in his close associated Tomas Duran to pitch it before the city council. When the council voted on it back then, it was split right in the middle. Neal, as mayor, broke the tie. It set off an explosion in that he had a clear conflict of interest. [Note: There was an FBI investigation after that vote and other matters related to the insurance deal ended up in the courts. ENTRUST went on to represent the city, and Duran was hired by the city to oversee it. Despite the move, the city would go on to lost money as a result of having contracted with ENTRUST in that there were catastrophic losses were incurred that overshadowed its gain.]
Other questions are being raised by local agents who operate in the area: Are there bribes and/or "commissions" and/or fees being taken from private sector businesses? The law clearly prohibits consultants from doing so. “Is there a watchdog agency looking into this Neal/Duran ‘very suspicious’ arrangement and into political contributions and other in-kind services?” one source admonished.
Historical notes show that when a health insurance consultant is hired by a government entity, the salary totals to about $30,000 or up to $40,000 depending on the situation, but the job is never a full-time deal. But in the case of what has been referred to as the Neal-Duran agreement in the county, Duran’s salary has far exceeded any precedent figure: it is believed to lead into the hundred of of thousands.
The Neal-Duran “consulting” agreement is very suspicious in that the person hired by the county, Servando Caballero (the AT-RISK MANAGER), who is in-charge of overseeing this insurance issue, has been taken out completely out of the formula. Neal is micromanaging the deal with Duran and a few others it is believed such as his administrative assistant (Steve Waterman). “There is a lot of money involved. Waterman seems to get involve when there is a major insurance deal. County Judge Neal has decided to get the top guys involve with his ‘favorite’ insurance and not living it up to the ones that should have handled it such as Servando Caballero – the AT-RISK MANAGER for the county. Why should Waterman makes the decisions instead of Caballero?” an insider in the field ruminated.
Other related notes: Duran has a history of being brought in as the “middleman” (or consultant) to set up the process in this type of “employer-funded” healthy insurance as was done at the Corpus Christi Independent School District several months ago at the insistence of some of the school trustees such as John Longoria.
“I believe Duran is brought in to set up the process, the guru. He sets up the process I believe and then manipulates the process to make sure the arrangements to make sure what agents are involved with the insurance (Art Granado has been been designated an agent in the past)… The agent chosen I believes can get a big chomp of change via commissions. Is their payola? Rebates? What is there preventing the agent from turning back and writing a check every month or so to the person who had something to do with he being appointed? The payola could be enshrouded justified under the umbrella of administrative overhead,” another inside source shared. “It is very suspicious to have County Judge Loyd Neal (who was an agent for the Insurance company Duran represents), in setting up the process for this health insurance deal.”
Duran is the middle-man that negotiates deals with the insurance companies and related the related-business network involved. But here you have a clear opportunity, where Duran has coordinated with politicians (Neal etc, who have been involved in the insurance business). “Who is stopping them from getting a piece of the pie? Caballero, whose job description in the county is to make sure no hanky-panky takes place has been removed from this deal and course of action altogether,” a local man involved in the insurance business asked. “If one prying eyes are around, then everyone involved can get taken care of and their was no transparency.”
Other questions linger: “Why is County Judge Loyd Neal using off-budget transfers to keep Duran as a consultant all year round? Where Duran is offered an opportunity to make up to ten times what he earned while working as a consultant at the Corpus Christi Independent School District?”
Many critics fancy that County Judge Neal is circumnavigating around the radar of public accountability. “Duran as a consultant will get to decide the different companies the insurance will work with as well as the pharmacists, the third-party management and so forth. Will there be a percentage rebate coming in from every prescription being filled? Etc. To whom will it be channeled and who is overseeing the process?”
Most of the persons interviewed in reference to the above insurance scenario felt that Duran should not be employed full-time as a consultant in a business of that size.