Commerce commissioner tells his side of company fine

ST. PAUL (AP) -- Ahead of a Senate hearing, Commerce Commissioner Glenn Wilson defended his agency's handling of a record $2 million settlement with a Florida insurance company that also has campaign contributions under scrutiny.

Wilson on Sunday told the Star Tribune of Minneapolis that he didn't know American Bankers Insurance Co. -- accused of violating insurance laws -- had made a contribution to Gov. Tim Pawlenty's campaign through a national Republican committee until 10 days after the agreement was signed.

He had only one brief contact with Pawlenty's staff regarding the company, he said, and that followed what Wilson characterized as an unusual meeting with Attorney General Mike Hatch who had proposed settling the case with a $3.5 million charitable contribution but not a reportable fine.

The commissioner said the $2 million settlement is better for Minnesota taxpayers because the money goes directly into the state's general fund while the charitable contribution would not have, and such a contribution could have had tax benefits for the company.

Wilson has been in the spotlight since the St. Paul Pioneer Press reported on a $15,000 campaign contribution American Bankers wanted earmarked for candidate Pawlenty. The company contributed the same amount through a national committee to DFL gubernatorial candidate Roger Moe.

The Senate Commerce and Utilities Committee was scheduled to hold a hearing Monday on allegations that the fine amount and contribution were connected.

American Bankers, which was accused of defrauding consumers in sales of credit insurance, reportedly discussed paying $3.5 million in fines last August but pulled out of talks with the state.

Former Commerce Commissioner Jim Bernstein suggested that the company got a lesser fine because of the campaign contribution to Pawlenty.

Pawlenty has denied any link between the campaign contribution and the penalty the company ultimately paid the state. The insurance company also denied making contributions in exchange for favorable treatment.

American Bankers Insurance Co. and affiliate American Bankers Life Assurance Co., both based in Florida, had been the subject of regulatory action by Gov. Jesse Ventura's administration since the late 1990s.