Texas Officials Question Insurance Firm’s Funding Of Prosecution Unit


Many Texas officials are questioning whether an unusually chummy relationship between a giant insurer and the Travis County district attorney's office in Austin should stand. The Texas Tribune and the Austin American-Statesman investigated a special unit in the DA’s office dedicated to prosecuting acts of fraud against privately held Texas Mutual Insurance Company. The firm funds the unit. Travis County Judge Sarah Eckhardt said she is consulting with county lawyers about the legality and appropriateness of the arrangement and is awaiting their response. “The arrangement makes me uncomfortable,” she said.

The company and the DA's office say that there is no conflict of interest and that their contract and a state law ensures prosecutorial independence. The company released numbers showing only a small fraction of the overall number of cases it investigates as fraud are presented to prosecutors. Assistant District Attorney Gregg Cox, who oversees the division in which the privately funded fraud unit is located, said the funding is needed because the Texas Department of Insurance has not been doing an adequate job of policing insurance fraud in the state. If we didn't have this agreement, crime would go unprosecuted,” Cox said. “I think this is something that was born out of necessity. You can't let crime go unprosecuted despite what the legislature thinks.” State Sen. Kirk Watson, who represents most of Travis County in the legislature, questioned why the state isn't paying for fraud investigations.

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