Analysis: Theriot-Donelon Insurance Spat in La. Goes On

When they disagree, political veterans in Louisiana’s Capitol often avoid the microphones and have their arguments in private.

Not so Jim Donelon and Steve Theriot.

Donelon, state insurance commissioner, and Theriot, the legislative auditor, are old friends now engaged in a months-old spat over Theriot’s audit of the Department of Insurance. Along with subpoenas, a lawsuit, the occasional snide remark and accusation of wrongdoing, each man has used public hearings to air his grievances about the other.

More than one lawmaker has said it would help the state if Donelon and Theriot patched things up, since Louisiana’s post-hurricane insurance market is in such rough shape.

“The longer this lingers, the longer it goes on, this is not good for our insurance market,” Sen. Don Cravins, D-Opelousas, said at a recent Senate Insurance Committee meeting.

“Boy, do I agree,” Donelon said.

But there’s no end in sight. The fight started last fall, after Donelon handed 25,000 insurance department e-mails over to Theriot’s investigators. Donelon refused to release the rest of his agency’s e-mails, saying privacy law and confidentiality agreements make it legally impossible for him to make them public.

Theriot disagreed, and subpoenaed the e-mails. Donelon answered by suing Theriot.

Their dispute gathered fresh steam when Theriot told the Senate committee he has found a new reason he needs the e-mails: they might contain proof of illegal price-fixing at the Louisiana Citizens Property Insurance Corp.

Donelon scoffed at the idea.

“All of that is just cheap political theater,” Donelon said. “There is no evidence to justify it whatsoever.”

Theriot told the committee he’s found indications that policy rate-fixing was discussed inside the department — but no proof such a scheme was carried out. He said the e-mails that Donelon is withholding might contain the damning evidence.

“I don’t know if anyone pulled the trigger” and engaged in price-fixing, Theriot said.

Donelon was re-elected insurance commissioner in 2007 for a four-year term.

The Legislature chose Theriot as its financial investigator in 2005, giving him the power to delve into the dealings of state agencies such as the insurance department. Theriot’s team of auditors is not used to the sort of resistance they’ve gotten from Donelon.

The hard feelings are new. Donelon and Theriot’s friendship was based on years they spent together as state lawmakers, even though they’re from different parties: Theriot the west bank Democrat, from Marrero; Donelon the east bank Republican, from Old Metairie.

“I consider Steve Theriot a personal friend, from the time we served together in the House of Representatives,” Donelon told reporters in a Senate hallway. “But all this has resulted in a serious challenge to that relationship. No doubt.”

Sen. Troy Hebert indicated that he sides with Theriot. Hebert said releasing all the e-mails would put Donelon in line with Gov. Bobby Jindal’s affection for “transparency” in government.

“Mr. Commissioner. You didn’t get the memo from Gov. Jindal, that he wants transparency?” asked Hebert, D-Jeanerette.

“Yeah, I got it,” Donelon said. “I want it, too.”

“You don’t think you’re being an obstructionist?”

“Oh, no way,” Donelon replied.

As turf battles go, the significance of Donelon v. Theriot is unclear. The winner will probably be determined by a court ruling in Donelon’s lawsuit, though no trial date has been set.

After listening to the recent debate, Cravins sought to cool things down between the two. Cravins said he hoped the disagreement was little more than a misunderstanding, caused by the complexities of insurance policy.

Then Sen. Ed Murray urged Donelon and Theriot to resolve things.

“We need to get this to some conclusion, some kind of way,” said Murray, D-New Orleans. “We’ve got to get off of this thing.”

Reporters later asked Donelon if that might happen soon.

“No,” Donelon said. “I don’t think so.”