The Oklahoma Insurance Department spent more than $180,000 on high-tech shotguns, bulletproof vests and seven police-package vehicles that agency officials say were needed as part of its expanded focus on criminal insurance fraud.
But the purchases have raised eyebrows among some lawmakers who question why the agency's nine-member anti-fraud unit — which primarily investigates white-collar crimes — needs equipment typically used by police officers and SWAT teams.
“I don't think Oklahomans as a whole are going to relish the day when their neighborhood is full of official police-package insurance department police cars as they're executing an arrest on a guy who did a fraudulent insurance claim,” said Rep. Jason Murphey, R-Guthrie, chairman of the House Government Modernization Committee and a long-time critic of what he perceives as excessive government spending.
“For the life of me, I never could come to grasp with why the Insurance Department couldn't take a local sheriff's deputy, or someone responsible to the local community, with them when they do these arrests,” he said.
According to Insurance Department records, the agency this year purchased five 2012 Dodge Chargers for $23,590 each and two 2013 Chevrolet Tahoes for $26,505 apiece, each outfitted with police packages that include stiffer suspensions and wiring for additional communications equipment.
The agency also purchased seven Remington pump-action shotguns for $699 each, along with seven mountable shotgun lights that cost $203 apiece and seven bulletproof vests that cost $625 each.
The expenditures were first reported by eCapitol, an online service that tracks bills for lobbyists, state agencies and private organizations.
“Is Al Capone back in town?” asked Rep. Richard Morrissette, D-Oklahoma City, referring to the legendary Chicago mobster. “Are we looking for stills in the woods? Come on, it's a joke.”
Insurance Commissioner John Doak defended the purchases, citing a case in Louisiana last year in which two fraud investigators were shot and killed during what should have been a routine trip to collect records from a suspended insurance agent who later shot himself.
“We serve a lot of warrants, and people are very, very distressed when a fraud investigator shows up at their door,” Doak said. “I don't want anyone at my office shot and killed because they weren't adequately trained.
“There's a lot of very bad actors involved in insurance fraud, and it's millions and millions of dollars at stake.”
Doak said he has placed a greater emphasis on the department's anti-fraud unit since he was elected in 2010. He also recently began working with local law enforcement agencies to establish vehicle insurance checkpoints, and recently joined the Tulsa County Sheriff's Office at a checkpoint operation there. Doak said he plans to expand that practice in 2013.
Doak also stressed that the expenditures were not from state appropriations, but rather from a revolving fund created by lawmakers two years ago that receives money from fees, fines, penalties and settlements. The account is used to fund the agency's anti-fraud division and received a huge boost last year when $1.6 million was deposited as a result of Oklahoma's portion of a multi-state settlement with insurance and financial services company American International Group, or AIG.
“This wasn't funded at taxpayer's expense,” Doak said.
Before the expenditures were made, Murphey said officials at the insurance department had told him they feared lawmakers would take money from the revolving fund and spend it in other areas of the state budget.
“I think the department was afraid that the Legislature would see that balance and raid the fund, so they went looking for investment opportunities, and this was one of them,” Murphey said. “I really counseled against it and expressed some concern.”
In an Aug. 31 email to Michael Copeland, the head of the department's anti-fraud unit, Murphey also voiced his concern about the agency using law enforcement vehicles.
“I believe the aesthetics of police units with the Department of Insurance markings are terrible from a public perception point of view,” Murphey wrote. “Additionally, since the department is led by an elected official this action could certainly create the perception that the markings are in place for political reasons.”
Sean Murphy can be reached at www.twitter.com/apseanmurphy