Watchdogs Target Insurance Brokers Cashing In On Lucrative Government Work

To State Comptroller Matthew Boxer and Citizens Campaign Chairman Harry Pozycki, it's a simple question: Why are New Jersey's county and municipal governments and school districts spending tens of millions of property tax dollars unnecessarily on high-priced insurance plans and broker fees?

It's also a politically sensitive question, because the biggest name in the insurance brokerage business for local governments is George Norcross, the South Jersey Democratic power broker and often ally of Republican Gov. Chris Christie.

Norcross's firm, Conner Strong & Buckelew, is by all accounts the biggest player in New Jersey's local government insurance market, and could have the most to lose if Boxer's and Pozycki's recommendations start a stampede toward the low-cost State Health Benefits Plan by municipalities, counties, and school districts forced to look harder for cost savings because of the new 2 percent spending cap.

Boxer estimates that counties and municipalities could save $100 million by switching to the State Health Benefits Plan, which pays no broker commissions, while Pozycki pegs the potential savings at more than $200 million if counties, municipalities and school districts would institute competitive bidding and bar insurance brokers from getting paid a percentage by the firms they recommend.

Comptroller Boxer's report, coming on the heels of the Citizens Campaign's Best Price Insurance initiative, has put New Jersey's multibillion-dollar government insurance industry on the defensive for the second time in nine months, not only by laying out the potential tax savings, but also by shining a spotlight on the underlying political connections that too often go unnoticed and unreported.

Nine months ago, Senate President Stephen Sweeney (D-Gloucester) attempted to insert a provision in pension and healthcare legislation that would have barred the State Health Benefits Plan from accepting any more county or municipal governments or school districts as members. Sweeney pulled the offending clause after the New York Times charged that Sweeney was trying to help Norcross, his political mentor and childhood friend, whose firm was losing business to the low-cost state government competitor.

Boxer's report, dryly entitled "Cost Analysis of Selected Local Government Units Joining the State Health Benefits Program," named no names. However, the $756,450 in broker fees paid over the past two years by Essex County went to Conner Strong, whose general chairman is Norcross. Essex County is run by County Executive Joseph DiVincenzo, the political boss who teamed up with Norcross to make Sweeney the Senate president and DiVincenzo's aide, Sheila Oliver, the Assembly speaker.

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