Thursday, September 07, 2006

Is Allstate a criminal enterprise?

Is there one remaining state or federal officials who is neither corrupt nor a vain careerist, one who is prepared to start treating the insurance industry for what is has become: a criminal, racketeering enterprise?

The definition of racketeering under the RICO statute is this:

(1) "racketeering activity" means (A) any act or threat involving murder, kidnapping, gambling, arson, robbery, bribery, extortion, dealing in obscene matter, or dealing in a controlled substance or listed chemical (as defined in section 102 of the Controlled Substances Act), which is chargeable under State law and punishable by imprisonment for more than one year..." (emphasis mine)
If Allstate's announcement that owners must buy inflated cost car insurance from the company or have their homeowners insurance cancelled is not extortion, I don't know what is. I think the fact that Allstate's motivation is to try to cancel homeowners contrary to state law (in effect, using extortion as a means to circumvent state law) ought to be considered as well, to help demonstrate how the industry has devolved into a criminal enterprise.

Can it be done? It would be a long shot. However, the mere threat having people in high places discuss a criminal (or better yet RICO) investigation would be sufficient to tank their stock. Even before a willing fed could be found, which might require a change of control of the White House, there's no reason (excepting incompetence and cowardice) that our own attorney general couldn't impanel a grand jury, and impound every piece of paper and computer in every Allstate agent's office in the state just to get the ball rolling.

I think that might begin to get the attention of the rest of the nation, and possibly lead to the sort of massive aid New Yorkers received after 9-11 for fear they would take out the airline and insurance industry with lawsuits.

Official Louisiana needs to begin to act in ways that fundamentally threaten the financial integrity of the insurance industry, to force the federal government's hand in the same way the victims of 9-11 (or their attorneys) did, so the government is forced to start paying the compensation Louisianaians deserve.

Allstate and their fellow conspirators in the insurance rackets aren't pussy footing around. They are out to destroy us. I think its time to reciprocate in kind.

It would be up to the feds to charge Allstate or another insurer with a RICO violation. That's unlikely although I can imagine Jim Letten being tempted, the final call would be made in Washington. A civil RICO case, while still unlikely, could be an outside possibility because it could be filed by a citizen injured by an insurer. It would be a hard case to prove.

I just had a flashback to my 1L criminal law class with Oliver Houck. We spent 5 days on RICO. I felt like Edward G Robinson afterwards. "Is this the death of Little Rico?"
All true, but the ultimate purpose is to force the federal's hand to begin to pay something approaching real compensation. Even a state grand jury, if it started impounding all of the papers and comptuers of Allstate agents and subpoenaing Allstate principals, could send a shiver through the stock market and force the federals to look at the sort of compensation we deserve. I don't think that a RICO prosecution is likely in our lifetime, but the threat could be profoundly useful.
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