Cindy Ossias
Encyclopedia
Cindy Ossias is a San Francisco, California
, based lawyer
and musician
. In the early months of the year 2000, while serving as a long-time senior lawyer for the California Department of Insurance
(CDI), Ossias leaked confidential documents exposing the allegedly illegal and corrupt activities of Chuck Quackenbush
, then Insurance Commissioner of California and head of CDI, to the state legislative consultant investigating the Commissioner's actions. In 2004, Ossias also took a seat as Director for California government watchdog group Californians Aware
.
School of Law. In 1991, she was appointed by then CDI commissioner John Garamendi
, to a special task force that wrote the state's regulations governing unfair claims practices by insurance companies. During her tenure at CDI, Ossias served as project manager and lead counsel for CDI's activities following various natural catastrophes, including the Oakland firestorm of 1991, the Southern California wildfires of 1993, and the Northridge earthquake of 1994.
Insurance committee, and disclosed that fact to the California Highway Patrol
. In testimony before the California State Assembly Ossias detailed how the CDI's upper management had suppressed findings of insurer wrongdoing after the Northridge earthquake of 1994 and instructed her to shred documents. The reports detailed claims-handling violations by State Farm
, Allstate
and 20th Century Insurance, used by Quackenbush to reach settlements with those insurers requiring them to contribute millions of dollars to foundations created by the commissioner. In return, Quackenbush agreed not to fine the companies or to finalize the reports, allowing the firms to donate $12.8 million to private foundations in lieu of fines of up to $3 billion. Quackenbush routinely neutralized staff members who were effective in prosecuting insurer misconduct by moving them out of enforcement positions. In exposing the corruption within the California Department of Insurance, Ossias risked losing her State job, held since 1990, her license to practice law, and her very liberty.
Ossias uncovered evidence of corruption while reviewing the insurance company claim files reflecting the claims handling practices following the 1994 Northridge earthquake
. The scandal also involved a scheme whereby fraudulent settlements were entered into between the CDI and insurers who had committed unfair claim and business practices. Quackenbush and top aides also used money from insurers to fund projects for personal financial gain and political advancement.
Quackenbush was once considered the most promising Republican candidate for the next Governor’s race, before Ossias came forward to reveal CDI corruption. According to testimony by CDI employees, including Ossias, and Assistant Chief Counsel Robert Hagedorn, the commissioner and his top aides abused their positions for personal gain and acted against consumers’ interests for many years.
In the wake Ossias' whistleblowing, a measure was passed (AB 363) permitting lawyers representing governmental clients at any level to report crimes and fraud to law enforcement or to government oversight bodies "in order to prevent or rectify substantial harm to the public." That bill was vetoed by Gov. Gray Davis. A subsequent similar measure passed and was vetoed by Gov. Arnold Schwarzenegger.
Cruz Bustamante
defeated Kraft Foods
heir John Kraft for the Democratic nomination. Bustamante, in turn, lost to Republican
businessman Steve Poizner
.
San Francisco, California
San Francisco , officially the City and County of San Francisco, is the financial, cultural, and transportation center of the San Francisco Bay Area, a region of 7.15 million people which includes San Jose and Oakland...
, based lawyer
Lawyer
A lawyer, according to Black's Law Dictionary, is "a person learned in the law; as an attorney, counsel or solicitor; a person who is practicing law." Law is the system of rules of conduct established by the sovereign government of a society to correct wrongs, maintain the stability of political...
and musician
Musician
A musician is an artist who plays a musical instrument. It may or may not be the person's profession. Musicians can be classified by their roles in performing music and writing music.Also....* A person who makes music a profession....
. In the early months of the year 2000, while serving as a long-time senior lawyer for the California Department of Insurance
California Department of Insurance
The California Department of Insurance , established in 1868, is the agency charged with overseeing the regulation of insurance regulations, enforcing statutes mandating consumer protections, educating consumers, and fostering the stability of insurance markets in the state of California...
(CDI), Ossias leaked confidential documents exposing the allegedly illegal and corrupt activities of Chuck Quackenbush
Chuck Quackenbush
Charles "Chuck" Quackenbush is a Florida law enforcement officer and former California Republican politician. He served as Insurance Commissioner of California from 1995–2000 and as a California State Assemblyman representing the 22nd District, from 1986–1994.- Background and political career :As...
, then Insurance Commissioner of California and head of CDI, to the state legislative consultant investigating the Commissioner's actions. In 2004, Ossias also took a seat as Director for California government watchdog group Californians Aware
Californians Aware
Californians Aware, The Center for Public Forum Rights, also known as CalAware, is a Carmichael, California based nonprofit organization established to help journalists and others keep Californians aware of what they need to know to hold government and other powerful institutions accountable for...
.
Education and early career
In 1983, Ossias graduated from Golden Gate UniversityGolden Gate University
Golden Gate University is a private, nonsectarian, coeducational university located in the South of Market district, immediately south of the Financial District of downtown San Francisco, California...
School of Law. In 1991, she was appointed by then CDI commissioner John Garamendi
John Garamendi
John Raymond Garamendi is the U.S. Representative for , serving since November 2009. He is a member of the Democratic Party. Garamendi was the California State Insurance Commissioner from 1991 to 1995, the U.S. Deputy Secretary of the Interior from 1995 to 1998, and the California State Insurance...
, to a special task force that wrote the state's regulations governing unfair claims practices by insurance companies. During her tenure at CDI, Ossias served as project manager and lead counsel for CDI's activities following various natural catastrophes, including the Oakland firestorm of 1991, the Southern California wildfires of 1993, and the Northridge earthquake of 1994.
Insurance industry corruption whistleblower
In early 2000, Ossias photocopied confidential department documents, supplied them to the California State AssemblyCalifornia State Assembly
The California State Assembly is the lower house of the California State Legislature. There are 80 members in the Assembly, representing an approximately equal number of constituents, with each district having a population of at least 420,000...
Insurance committee, and disclosed that fact to the California Highway Patrol
California Highway Patrol
The California Highway Patrol is a law enforcement agency of the U.S. state of California. The CHP has patrol jurisdiction over all California highways and also acts as the state police....
. In testimony before the California State Assembly Ossias detailed how the CDI's upper management had suppressed findings of insurer wrongdoing after the Northridge earthquake of 1994 and instructed her to shred documents. The reports detailed claims-handling violations by State Farm
State Farm Insurance
State Farm Insurance is a group of insurance and financial services companies in the United States. The company also has operations in Canada....
, Allstate
Allstate
The Allstate Corporation is the second-largest personal lines insurer in the United States and the largest that is publicly held. The company also has personal lines insurance operations in Canada. Allstate was founded in 1931 as part of Sears, Roebuck and Co., and was spun off in 1993...
and 20th Century Insurance, used by Quackenbush to reach settlements with those insurers requiring them to contribute millions of dollars to foundations created by the commissioner. In return, Quackenbush agreed not to fine the companies or to finalize the reports, allowing the firms to donate $12.8 million to private foundations in lieu of fines of up to $3 billion. Quackenbush routinely neutralized staff members who were effective in prosecuting insurer misconduct by moving them out of enforcement positions. In exposing the corruption within the California Department of Insurance, Ossias risked losing her State job, held since 1990, her license to practice law, and her very liberty.
Ossias uncovered evidence of corruption while reviewing the insurance company claim files reflecting the claims handling practices following the 1994 Northridge earthquake
Northridge earthquake
The Northridge earthquake was a massive earthquake that occurred on January 17, 1994, at 04:31 Pacific Standard Time in Reseda, a neighborhood in the city of Los Angeles, California, lasting for about 10–20 seconds...
. The scandal also involved a scheme whereby fraudulent settlements were entered into between the CDI and insurers who had committed unfair claim and business practices. Quackenbush and top aides also used money from insurers to fund projects for personal financial gain and political advancement.
Quackenbush was once considered the most promising Republican candidate for the next Governor’s race, before Ossias came forward to reveal CDI corruption. According to testimony by CDI employees, including Ossias, and Assistant Chief Counsel Robert Hagedorn, the commissioner and his top aides abused their positions for personal gain and acted against consumers’ interests for many years.
Aftermath
Quackenbush resigned from office shortly after Ossias testified before the Legislature. He was never charged, although his Deputy Commissioner was charged with and pled guilty to having accepted kickbacks from contributions made from the insurance foundations set up by Quackenbush. Two others were indicted in the same scheme.In the wake Ossias' whistleblowing, a measure was passed (AB 363) permitting lawyers representing governmental clients at any level to report crimes and fraud to law enforcement or to government oversight bodies "in order to prevent or rectify substantial harm to the public." That bill was vetoed by Gov. Gray Davis. A subsequent similar measure passed and was vetoed by Gov. Arnold Schwarzenegger.
Present career
Ossias was lead counsel in CDI's case involving the claims and business practices of the nation's largest disability income insurance holding company, UnumProvident Corp. The investigation concluded with a settlement with UnumProvident, in which the company paid an $8 million fine, agreed to make substantial changes to their disability income insurance policies sold in California to make them more favorable to their insureds, and agreed to reassess claims that had been denied or terminated between 1997 and 2005. The company also agreed to provide an independent third party review to those claimants not satisfied with the company's reassessment. Some sources indicated that Ossias thought about running for Insurance Commissioner in 2006 as a Democrat. However, she did not run, and Lieutenant GovernorLieutenant Governor of California
The Lieutenant Governor of California is a statewide constitutional officer elected separately from the Governor who serves as the "vice-executive" of California. The Lieutenant Governor of California is elected to serve a four year term and can serve a maximum of two terms...
Cruz Bustamante
Cruz Bustamante
Cruz Miguel Bustamante is an American politician. He was the 45th Lieutenant Governor of California, a former Speaker of the State Assembly and a member of the Democratic Party...
defeated Kraft Foods
Kraft Foods
Kraft Foods Inc. is an American confectionery, food and beverage conglomerate. It markets many brands in more than 170 countries. 12 of its brands annually earn more than $1 billion worldwide: Cadbury, Jacobs, Kraft, LU, Maxwell House, Milka, Nabisco, Oscar Mayer, Philadelphia, Trident, Tang...
heir John Kraft for the Democratic nomination. Bustamante, in turn, lost to Republican
Republican Party (United States)
The Republican Party is one of the two major contemporary political parties in the United States, along with the Democratic Party. Founded by anti-slavery expansion activists in 1854, it is often called the GOP . The party's platform generally reflects American conservatism in the U.S...
businessman Steve Poizner
Steve Poizner
Stephen Leo "Steve" Poizner is an American businessman/entrepreneur and conservative Republican politician, who was elected State Insurance Commissioner of California in November 2006, and concluded the 4 year term in January 2011...
.
External links
- ConsumerWatchDog.org - 'Whistle-Blower Emerges in QuackenbushChuck QuackenbushCharles "Chuck" Quackenbush is a Florida law enforcement officer and former California Republican politician. He served as Insurance Commissioner of California from 1995–2000 and as a California State Assemblyman representing the 22nd District, from 1986–1994.- Background and political career :As...
Probe Scandal: Staffer provided documents, saying she could no longer tolerate misconduct', Virginia Ellis, Carl Ingram, Los Angeles TimesLos Angeles TimesThe Los Angeles Times is a daily newspaper published in Los Angeles, California, since 1881. It was the second-largest metropolitan newspaper in circulation in the United States in 2008 and the fourth most widely distributed newspaper in the country....
(June 23, 2000) - GuerillaLaw.com - 'Whistleblower Cindy Ossias'
- Peer.org - 'California Legislature Passes Government Lawyer Whistleblower Bill — First Major State to Free Public Agency Attorneys to Reveal Confidential Information', Public Employees for Environmental Protection (September 5, 2002)
- UnitedPolicyholders.org - 'Quackenbush Scandal No Surprise' (Summer, 2000)