December 13, 2005
More heat on Ceverha

Recently, State Rep. Pete Gallego sent a letter to former TRMPAC treasurer Bill Ceverha requesting that he resign from the board of the Employees Retirement System of Texas in light of his filing for personal bankruptcy after losing a TRMPAC-related lawsuit. He's still being dogged about this, now by State Rep. Lon Burnam, who sent the following letter regarding a potential conflict of interest for Ceverha in his role with ERS.

December 7, 2005

Ms. Carolyn Gallagher, Chair
Employees Retirement System of Texas
18th and Brazos Streets
P. O. Box 13207
Austin, Texas 78711-3207

Mr. Don Green, Vice Chair
Employees Retirement System of Texas
18th and Brazos Streets
P. O. Box 13207
Austin, Texas 78711-3207

Dear Ms. Gallagher and Mr. Green:

I am writing to formally ask that you add Mr. Bill Ceverha’s conflict of interest to the agenda for your next ERS Board meeting, December 14, 2005. I would like to address the board on why Mr. Ceverha should immediately resign his position as an ERS Board Member. I will focus my comments in this letter on Mr. Ceverha’s conflicts of interest and refrain from further comment on his bankruptcy or legal troubles (which have been communicated by multiple legislators and public interests groups, and well-documented by multiple news outlets).

Mr. Ceverha has a conflict of interest between his service as an ERS Board Member, and his for-profit lobby practice.

In 2003, Mr. Ceverha was appointed to the ERS Board. In that same year, Mr. Ceverha disclosed to the Texas Ethics Commission that he lobbied for Mr. Henry J. “Bud” Smith. On his lobby disclosure, he indicated that Mr. Smith is in the insurance business.

According to Mr. Ceverha’s own testimony during a civil lawsuit involving his role as treasurer for Tom DeLay’s indicted political action committee (TRMPAC), Mr. Ceverha was lobbying the Legislature on behalf of Bud Smith on insurance related matters in January of 2003. Mr. Ceverha acknowledged that he was lobbying the Legislature on a specific issue within the insurance industry. Mr. Ceverha stated in his deposition, “It has to do with the ability for pension funds to ensure the life of the retires and produce significant income to the pension fund at the time the retiree dies.”

By his own admission, Mr. Ceverha was lobbying for the morbid insurance scam known as “dead peasant” insurance.

During the 2003 Legislative Session, then State Rep. Kenny Marchant introduced a bill (HB 3613) that would have allowed the State of Texas to take out life insurance policies on retired state employees without their knowledge. Under the bill, the State of Texas would have been the beneficiary when our own state employees died. I cannot imagine a more grotesque or reprehensible insurance scheme.

The bill was brought to then Rep. Marchant by none other than Bud Smith, Mr. Ceverha’s lobby client. I have attached an article with quotes from Mr. Marchant and Mr. Smith, explaining in greater detail this morbid scheme.

In 2003, Mr. Ceverha lobbied the Legislature on a financial matter that would have directly impacted your agency, the same agency that he serves as a board member. How is this not a conflict of interest? Do any of your other board members have lobby contracts with clients pushing morose financial and insurance schemes that would directly affect ERS?

By his own admission, Mr. Ceverha acknowledged lobbying for a client who wanted Texas pension funds to invest in a dead peasant insurance scheme. This conflict of interest should disqualify Mr. Ceverha from serving on your board.

I hope you will grant my request, and allow me some time on December 14 (at your next board meeting) to address the entire ERS Board on this issue. Please do not hesitate to contact me if you have any questions or concerns regarding this request.


State Rep. Lon Burnam

Here's a link to the article Burnam mentioned. I've also written about "dead peasant" insurance, also known as Corporate Owned Life Insurance, or COLIs. In any event, I hope Burnam gets to testify. Ought to make for a much more interesting meeting that way.

Posted by Charles Kuffner on December 13, 2005 to Scandalized! | TrackBack