Members of the Wellington Village Council expressed concerns last week that frivolous ethics complaints against council members could cost taxpayers if the costs surpass the village’s insurance cap.
Currently, the insurance policy offers up to $100,000 in coverage for public official liability, which is used to defend elected officials in ethics complaints. But because of numerous complaints, Village Attorney Laurie Cohen warned council members that the policy may have to be increased.
The issue arose Tuesday, Sept. 10, when council members were asked to authorize a contract renewal for the policy with the Florida Municipal Insurance Trust. The policy also covers property, casualty and workers’ compensation insurance.
Because the contract included public official liability coverage, Mayor Bob Margolis and Councilman John Greene — both of whom have been the subject of several ethics complaints — decided to recuse themselves and not vote on the matter.
“As many of you know, there have been ethics complaints filed,” Margolis said. “Because they have been filed and dismissed, the Village of Wellington has used insurance to pay for the litigation.”
Margolis said his litigation fees have reached between $50,000 and $60,000.
“Because this is part of the insurance policy, which calls for using insurance to defend elected officials, I’m asking to recuse myself,” he said.
But Vice Mayor Howard Coates noted the policy affected all council members, and asked why Margolis felt he needed to sit out of the vote.
Margolis said it was because of several complaints still being resolved.
“There are ethics complaints still out there,” he said. “It might affect the use of this insurance policy. I discussed this with [Cohen] and made the decision out of due caution.”
Greene said he was recusing himself for the same reason.
“I have also been a subject of what the [Palm Beach County Commission on Ethics] has labeled political harassment and abuse of the office,” he said. “These harassments and sworn complaints were basically threats made if I didn’t support a certain position. No matter what I do, right or wrong, people are looking for reasons to complain, and the complaints will continue.”
Councilwoman Anne Gerwig asked what the cost breakdown has been. Cohen said the policy covers incidents up to $25,000. So far, she said, two claims have been paid out.
“There was a claim submitted for [Greene] that was approved,” she said. “It was paid almost in full, though I think there was a $500 or $600 difference not paid. We also just received a check today for a claim for [Margolis] related to the election dispute, and the insurance did pay the full $25,000.”
Cohen said the council may need to consider increasing its policy.
“The insurance covers up to $25,000 per incident with a total coverage of $100,000,” she said. “That same policy has to cover other things. There are other claims out there as well. We may be looking into increasing that coverage so we don’t end up in a situation… where we’ve exhausted our policy.”
Coates pointed out that the current coverage gives council members only four opportunities for legal defense if the full $25,000 is paid each time.
“If we have four ethics complaints against council members and they exceed that cost, then we’re done,” he said. “The next one will cost the village the full amount.”
Councilman Matt Willhite asked whether that increase should be reflected in the contract before them, but Cohen said it would likely come back as an amendment to the contract.
Willhite was concerned that the ethics complaints are costing the village money.
“It’s not just affecting the individual council members,” he said. “And most of the time when you file a claim, your insurance goes up.”
Cohen said the insurance was there to buffer that cost. “We would have insurance anyway,” she said. “But there is clearly a cost to the village. We haven’t incurred that cost yet, but we will.”
She noted that if legal fees for the defense of a council member exceed $25,000, the council member can ask the council to reimburse those fees.
Gerwig asked whether council members choose their attorneys or if the insurance company appoints one. Cohen said it is up to the council member to choose them.
“We have no way to control the cost of legal fees,” Gerwig said. “It’s just whoever we pick?”
But Cohen noted that the council could refuse to reimburse a council member’s out-of-pocket costs.
“The council can vote not to approve anything over what the insurance pays if they feel the attorney fees are unreasonable,” she said. “Whoever retained the attorney would be liable for the fees. You have an incentive to retain an attorney who will bill you at a reasonable rate.”
Gerwig cautioned council members that she didn’t want residents to feel they should not bring reasonable concerns before the ethics commission.
“I don’t want to have residents with actual concerns not bring them to the proper authorities because they think it will raise their taxes,” she said. “If people have questions about our behavior, they should go to the proper authorities. I don’t want to give the impression that we’re trying to talk anyone out of that to save ourselves tax money.”
She made a motion to approve the contract, which passed 3-0 with Margolis and Greene not voting.
ABOVE: The Wellington Village Council.