Fired Insurance Official Says Garamendi Needed Scapegoat

A manager fired by state Insurance Commissioner John Garamendi six weeks ago contends that Garamendi destroyed her career because he needed a scapegoat for problems at an Insurance Department division that was “out of control.”

Jan Brookes of the conservation and liquidation division was fired, and her supervisor, division chief Ronald G. Rosen, was demoted and transferred Sept. 23, several weeks after a state audit cited the division for “significant weaknesses” in the way it manages assets and disburses money. The unit oversees more than $750 million in assets of failed insurers.

Brookes, in her first public statement Wednesday, said the problems in the department long preceded her hiring in August, 1992, and that she worked effectively to bring order and professionalism to the division’s management structure.

Gary Hernandez, the deputy insurance commissioner who oversees the division, said Wednesday that while Brookes did “a number of terrific things” on the job, they were outweighed by a breach of fiduciary duty.

Specifically, Brookes recommended to Rosen that employees who had accrued “severance benefits” under an unusual division policy--since discontinued--be paid off so that the liability for the benefits could be wiped off the books. Rosen agreed and paid out $89,800 to 26 employees.

Hernandez said the program required such payments to be made only in the event of a layoff and that most of the employees probably would never have been laid off. The action amounted to “an unauthorized gift of public funds” and was a firing offense, he said.

Brookes’ lawyer, Gerald Klein, scored Garamendi for referring her case to the Los Angeles district attorney’s office despite the belief of Insurance Department officials that no crime had been committed.

Brookes said she is considering filing a wrongful-termination suit but first wants to be sure she faces no criminal charges.