in Houston, Texas
Texas windstorm agency withholds records that would shed light on consultant costs
Wednesday, Dec 05, 2012, 01:19PM CST
By Lee Ann O'Neal
Hurricane Ike

A state agency so troubled that regulators took it over is complaining the costs of that oversight have become burdensome.

The $6.4 million a year, in part for outside consultants charged with helping turn around the Texas Windstorm Insurance Association, is a “sore subject” for board members of the agency and state lawmakers, the Corpus Christi Caller-Times reports. The agency’s general manager, John Polak, points out that TWIA has no control over the hiring of those consultants and so cannot be held responsible for those costs.

Board members must have forgotten the fears of insolvency and allegations of mismanagement that led to oversight in the first place. All this outside meddling was brought about by the agency’s own bungling of claims following Hurricane Ike, which brought charges of fraud and a torrent of lawsuits.

Ongoing litigation costs stemming from Ike are expected to reach $2.5 billion, the paper reports -- or nearly 400 times the annual cost of the management consultants, who have recommended a restructuring of TWIA, reviewed legal bills and given legal advice to the board.

While board members are miffed about the mounting consultants’ costs, their agency could help shed some light on them by releasing invoices sought by the paper for Alvarez & Marsal, the costliest consultant of them all. TWIA joins the North Texas Tollway Authority, Lehman Brothers and the Central Bank of Cyprus on the firm’s client list.

But as one board member put it: “I still wonder what we are getting for the money.”

TWIA has appealed the newspaper’s request to the attorney general, saying the information may be proprietary -- a common but flawed argument when private companies do the public’s business.

Records released so far list six-figure costs for vague reasons like “special projects” and “additional services.”

By releasing the records swiftly and in full, TWIA would take a step toward rebuilding the public trust and maybe, just maybe, eventually being allowed to operate on its own.

***
Contact Lee Ann O’Neal at 713-980-9777 or leeann@texaswatchdog.org.

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Photo of Hurricane Ike by flickr user NASA's Marshall Space Flight Center, used via a Creative Commons license.

Comments
Muskrat says
Wednesday, 12/05/2012 - 07:10PM

What makes you think that TWIA doesn't want to release the info? TDI and Alvarez and Marsal won't let them. However, the OAG should rule this information is public and people will see the abuses by TDI and A&M on these no bid contracts. Just another set of friends helping their buddies get rich with no bid contracts while staying at the Austin Four Seasons and eating at Austin's finest restaurants all at the policyholders expense.

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