Greg Abbott Takes Thousands from Farmers Insurance PAC As State's Lawsuit Against Them Continues

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Greg Abbott may have been representing Texas in a suit against Farmers Insurance for the past decade, but that hasn't stopped him from taking over $125,000 from Farmers Insurance PAC since 2005–including over $75,000 since 2013.

The donations have led to charges that Abbott has “not fairly represented homeowners in Texas” in the suit, reaching a settlement that allows Farmers to charge homeowners too much and not pay interest on millions in excessive premiums.

Abbott's campaign told the Texas Tribune that, “he does not treat donors differently when it comes to applying the law and that accepting the campaign money is not a conflict of interest.” But as Alex Winslow, executive director of Texas Watch told the Tribune, “It was a sweetheart deal when it was struck in 2002, and it's only gotten sweeter since then.”

Read more about Abbott's “sweetheart deal” with Farmers Insurance after the jump.The suit began in 2002, as a result of Governor Rick Perry's investigation into rising homeowners' insurance rates. The state's class-action suit against Farmers claimed the company used “deceptive and discriminatory practices,” including charging “Texas policyholders for natural disasters in other states” and using “credit history as a significant factor for setting premiums without disclosing to customers that the practice drove up prices.” John Cornyn, who was Attorney General at the time, estimated Farmers owed policyholders up to $140 million.

At the time, Greg Abbott was running for Attorney General. The contributions he'd received from Farmers Insurance soon became an issue. When Abbott learned of the state's investigation into Farmers, he vowed to return all campaign contributions from them, criticizing their policies,

“Texas has become the wild west of insurance gouging and holdups. … Texans will not tolerate deceptive acts by insurance companies or corporations of any type. As Attorney General, I will put an end to rate shock by holding accountable any company that bilks consumers out of their hard earned money.”

In 2003, soon after Abbott took office, a preliminary settlement was approved. The settlement was quickly appealed by advocates for consumers, who argued it was too lenient on Farmers Insurance.

The settlement is still pending, and was brought to light again in April at a Travis County district court hearing. Judge Scott Jenkins called the state's settlement “deferential” to Farmers and questioned why it “allow[ed]the insurance giant to avoid paying interest on millions of dollars in excessive premiums” that it owed to policyholders.

Said Jenkins, “You don't just have to lay down to Farmers. Farmers has had the benefit of all that money for more than a decade and the consumers haven't.”

Meanwhile, as the state's suit continued, Greg Abbott has been accepting tens of thousands of dollars from the Farmers Insurance PAC. Abbott, who as Attorney General is the lawyer leading the state's suit against Farmers, has received over $125,000 from Farmers Insurance in the past decade–all while the state has been defending a settlement that is “deferential” to Farmers.

In 2002, Greg Abbott pledged to protect consumers from insurance giants like Farmers. Unfortunately, that hasn't been the case. Abbott's money is where his mouth is, and that's favoring Farmers Insurance over Texans.


About Author

Katie Singh

Katie grew up in Austin and has been involved in Texas politics since 2004. She has been a part of several campaigns, from state house races to working at President Obama's campaign headquarters in 2012. She loves public policy, public health, and tacos. Katie tweets from @kasingh19.

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