A Republican running for a New Jersey congressional seat released an ad attacking his tea party opponent for opposing federal aid to Hurricane Sandy victims–but the former AIG executive’s company was successfully sued twice for cheating Hurricane Ike’s victims. His company is also being sued for cheating its employees and for refusing to pay firefighters’ claims from when they were injured in the line of duty.
Last week, Tom MacArthur, a moderate Republican vying for the party’s nomination in the third congressional district,attacked opponent Steve Lonegan for opposing the pork-packed relief bill in an ad.
However, MacArthur’s companies, York Claims Services, were successfully sued twice for refusing to pay Hurricane Ike victims the money owed to them under their insurance policies. Neither case went to trial but both were quickly settled when York was hit with litigation.
Houston Baptist College sued York Risk Services and ACE after the companies delayed payments for the $24 million in damages it sustained for over a year. “We’ve suffered a loss and we want to be made whole again,” said President Robert Sloan Jr. of Houston Baptist College to the student newspaper as he announced the suit in September 2010. “Not having the use of the building has hurt our ability to recruit students, our curb appeal, our students’ University experience and our ability to retain students.”
Sloan said that he was sorry the Houston Baptist College had to take MacArthur’s insurance company to court.
“They drug their feet,” he said. “They weren’t very responsive. They obviously have not paid us what they owe us under our coverage. I don’t think the insurance company has acted in good faith.”
Criticism of the Sandy federal aid bill has become bipartisan with Democratic Rep. Frank Pallone agreeing that Republicans were right that it would become a slush fund for the politically connected.
In 2009 the Galveston wharves also sued York Risk Services and the insurers in a multi-million dollar suit, alleging that the Port of Galveston suffered flood and storm surge damage as a result of Hurricane Ike. The plaintiffs cited York’s “…refusal to live up to their promise to timely compensate the Port of Galveston for its devastating Hurricane Ike losses…” York and the rest of the defendants quickly settled for an undisclosed amount.
While MacArthur’s campaign consultant, Chris Russell, insisted in a press release that these were isolated incidents, MacArthur’s company, York, was also hit with an ongoing class action for cheating its workers out of overtime pay. The claims processing company received more than half of its business from the insurance giant AIG, where MacArthur formerly worked and which was bailed out by the taxpayer to the tune of $182 billion.
One case continues to be litigated. Nine firefighters from Phoenix, Arizona sued York Risk Services in August 2013 for denying them health benefits and refusing to reimburse them for expensive copays after they were injured in the line of duty.
MacArthur’s moderate Republican politics have come under attack in recent weeks by Steve Lonegan, who won the southern Jersey district in his failed U.S. Senate bid against Cory Booker.
Lonegan has seized on comments that MacArthur made favoring progressive taxation and supporting “a health insurance system in which insurance companies fund an ‘insurer of last resort’ for those who cannot get coverage otherwise.” a position that Lonegan says is identical to Obamacare.
“The Democrat party is going to make this guy the poster child for the corrupt, greedy businessman going into the midterms,” Lonegan told Breitbart.com. “What the Democrats did to Mitt Romney is going to look like child’s play.”
Russell and MacArthur declined to comment.
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