FBI informant: John Crawford destroyed Oklahoma's oldest insurance company

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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


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.


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.


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.

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Bob said:

I'm very happy that John Doak won the run-off. I'd like to think that Michael's blog with a careful analysis of Mr. Crawford's unsavory reign as former Insurance Commissioner had some influence on those that follow his political commentaries.

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This page contains a single entry by Michael Bates published on August 24, 2010 2:31 PM.

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