Lesson from a pair of scandals: This North Carolina Republican won’t be pushed around

Mike Causey wasn’t having it.

It was September and Causey, North Carolina’s insurance commissioner, had just discovered that Blue Cross Blue Shield of North Carolina withheld information from him. Its CEO, Patrick Conway, was arrested for driving while impaired in June and the company didn’t tell Causey until about three months after it happened.

Feeling like he had to weigh in publicly, Causey turned to his legal advisers for help with a news release. He wanted to encourage Blue Cross to find a new leader. What advisers suggested was, in his opinion, unsatisfactory.

“I’m not here to make a weak statement,” Causey recalled telling them.

After this year, it’s hard to imagine that anyone would consider him a pushover. Amid two high-profile scandals, the insurance commissioner has made his message clear: Don’t mess with Mike Causey.

In September, the 69-year-old, first-term Republican from Guilford County called on the CEO of North Carolina’s largest health insurance company to step down, prompting the company to halt a multi-million-dollar merger.

And in April, indictments revealed that Causey worked with the FBI to thwart what prosecutors have described as a conspiracy between insurance tycoon Greg Lindberg and the chairman of Causey’s own political party. Robin Hayes, the former NC GOP chairman, has since pleaded guilty to lying to the FBI. The forthcoming trial could potentially implicate more of North Carolina’s top political figures.

Lindberg has donated hundreds of thousands of dollars to committees supporting the campaigns for Republican Lt. Gov. Dan Forest and NC Democratic Party Chairman Wayne Goodwin, the incumbent insurance commissioner who Causey beat in the 2016 election. The indictment also mentions U.S. Rep. Mark Walker, though not by name.

“North Carolina has been home to some prominent scandals, most notably the recent 9th Congressional District absentee by mail ballots and the Jim Black speakership scandal,” said Michael Bitzer, a politics professor at Catawba College. “But this internal party scandal, connected with influencing a public official, seemed to raise a new level of corruption in the state.”

Causey’s actions come at a time when politics have become increasingly divisive and tribal.

Floyd McKissick Jr., a Democratic state senator from Durham, said he was surprised to see a politician actively working to expose corruption — even when it implicated members of his own party. The indictment alleges that Lindberg offered Causey campaign cash in exchange for staffing changes that would help his company.

“I thought it spoke well of (Causey’s) independence and his integrity,” McKissick said.

“There are certainly people in public office who are forced to choose what is right and what is wrong. He took the option that others may not have taken,” he said.

Causey’s friends are far less surprised. Labor Commissioner Cherie Berry has known Causey since the 1990s.

“You can’t do that with him,” Berry said, referring to attempts to bribe and persuade Causey. “If (Republicans) needed to be implicated, then he’s the person that would do that. He’s honest to the core,” she said.

Causey is the kind of guy who will tell it like it is, said his friend, Kevin Clemmer, who works in the Department of Transportation’s environmental unit. He’s known Causey since they worked on the DOT’s litter clean-up program together 10 years ago.

“That guy isn’t in Raleigh to beef up a campaign and get cash donations,” Clemmer told the N&O.

In 2016, Causey was outraised by Goodwin $1.2 million to $152,000.

He’s no “bought politician,” Clemmer said. “He’s just someone who wanted to become elected to do a better job and serve the people.”

About the job

The job of insurance commissioner is typically low-profile. In fact, in most states, the insurance commissioner is an appointed position. North Carolina is one of only a dozen states where voters elect an insurance commissioner.

North Carolina’s commissioner regulates insurance companies and works as the state’s fire marshal. Causey, the first Republican ever elected to the office, sees his calling in keeping insurers honest and saving people money.

His department inspects and aids fire stations across the state. Not only do fire response times affect public safety, they are factored into homeowners’ insurance rates. The better the station’s rating, the lower the service area’s insurance rates. So the more resources the stations have, the better.

And when it comes to regulating insurance, Causey believes it pays to be tough on crime.

A portion of every insurance premium goes toward protecting a company against fraud. Causey’s thinking: If the Department of Insurance can help companies do a better job of cracking down on fraud, those companies won’t have to charge as much to consumers.

Since Causey took office, he says he’s doubled the number of criminal investigators from 20 to 44. And he’s still asking the legislature for more, something he says wasn’t popular among legislative leaders the first time he approached them.

“They said, ‘We’ll help you, but don’t come back over here asking for 30 new positions,’” Causey recalled. “So I went back over and asked them for 78 new positions. And they said, ‘I thought you were conservative.’ I said yes, but this is something that needs to be addressed.”

DOI made 500 arrests last year, ABC11 reported in June.

Insurance rates

Causey’s term didn’t exactly start smoothly. Shortly after taking office in 2017, he was criticized —and later apologized — for sharing an image that mocked women who participated in women’s marches across the country. The image showed marchers and included the caption: “In one day, Trump got more fat women out walking than Michelle Obama did in 8 years.”

He has also continued to receive criticism from Goodwin, who he beat in 2016 by fewer than 36,000 votes. Goodwin will run again in 2020 for the commissioner’s job, he announced Tuesday after this story was published online.

Goodwin says Causey should be doing more to promote Medicaid expansion — something Causey says is an issue for the legislature, not the insurance commissioner.

Goodwin also blames Causey for allowing homeowners’ insurance rates to rise two years in a row, a situation Causey has described as almost inevitable.

Causey this year approved an average homeowners’ insurance rate increase of 4%, which will go into effect next year. Last year, Causey approved an average increase of 4.8%. Last year’s increase was the first since 2012, according to Insurance Journal.

Causey defended the increase, pointing out that it’s far lower than the rate requested by the North Carolina Rate Bureau. The bureau, an independent group that represents insurers in the state, said this year its members need more revenue “to cover increased losses, hurricane losses and the net cost of reinsurance,” the Winston-Salem Journal reported.

The bureau sought hikes of more than 17% each of the last two years. “We vigorously pushed back on that. We spent considerable amounts of resources to refute the rate bureau,” Causey said.

North Carolina has the 12th-lowest average homeowners’ insurance rates in the country, according to Insurance.com.

Roots in North Carolina

Causey is a Republican, but that affiliation doesn’t run in the family.

The insurance commissioner resides in a lodge built in 1907 as a hunting retreat for Marcellus Dodge, then the chairman of Remington Arms. Causey’s great-grandfather worked there and later bought the property after the Great Depression prompted its owners to put it on the market.

Causey’s dad, known as Kinnie, inherited the land and farmed it. He worked as a trucker and a member of the Teamsters Union, Causey said.

“I grew up in a staunch Democrat family. My grandfather hated Republicans, I remember that from being a little kid,” he said.

After graduating from Southeast Guilford High School, Causey joined the Army and was overseas in Japan when he decided to register to vote.

“I registered Republican because, at the time, North Carolina was a one-party state. It was solidly Democrat,” Causey said. “I just felt like, regardless of what party somebody is, there needs to be some competition.”

His first foray into politics came when he volunteered to help Ed Peacock, who ran for Charlotte mayor in 1983. Causey had moved to the Queen City in 1974 to work for MetLife as an insurance agent, he said.

Causey worked in insurance for 25 years, then shifted to lobbying. He represented smaller groups such as the Independent Auto Body Association and North Carolina Glass Association among others, he said.

Despite not holding elected office until 2017, Causey has long been familiar with the culture of the legislature. He knows what is and isn’t appropriate when it comes to deal-making in Raleigh.

Alleged bribery attempt

Causey said he knew Lindberg was worth mentioning to the FBI in the fall of 2017, when he met agents in Charlotte for a presentation on recognizing fraud. Agents told Causey they have the resources to investigate fraud should he ever need them, he recalls.

“Because of that conversation and how it went, I said we may have some situations where I’d like you to just see if there’s any advice you’d give me. That’s sort of how it started,” he said.

“Once they decided they were interested in a particular case, everything that was done was at their direction,” Causey said. “So, there’s a lot of misinformation out there about I did this and I did that, but we were just cooperating with the investigation, as we’re still doing.”

A federal grand jury later indicted state GOP chairman Hayes, Lindberg, John D. Gray and John Palermo for allegedly trying to bribe Causey with $2 million in campaign contributions. Authorities say Lindberg wanted Causey to make staffing changes that would lessen oversight on his companies, a claim he has denied.

The indictments not only affected Hayes, they raised questions about other high-profile Republicans.

The indictment mentions another person in contact with Lindberg and Causey — “Public Official A” — but doesn’t name them. The indictment says the public official contacted Causey and talked about the staffing changes sought by Lindberg. That official is Republican U.S. Rep. Walker of Greensboro, Politico confirmed. Walker has not been charged.

Lt. Gov. Forest, considered the leading Republican candidate for governor, is also tied to Lindberg. The insurance executive has donated more than $7 million to political committees between 2016 and 2018 — with the largest donations going to groups formed at least in part to help Forest, McClatchy reported April 3.

Lindberg held a fundraiser for Forest at his house and many of his employees — some of whom had never donated to a political campaign before — gave about $61,000 to Forest’s committee, the N&O reported in April.

More details about Lindberg’s relationships could come out during trial and affect next year’s elections, said Bitzer, the political analyst at Catawba College.

“With Robin Hayes’ guilty plea and potential testimony against Lindberg and others, when the trial is held, it will likely be in the midst of next year’s election cycle, potentially damaging the GOP brand,” Bitzer said.

Blue Cross case

If a big political donor, a sitting congressman, and the chairman of the North Carolina GOP couldn’t persuade Causey, a man facing a DWI charge stood little chance. But that doesn’t mean the stakes were low.

When Blue Cross NC CEO Conway was arrested in June, the Durham-based company was in the process of setting up a merger with Oregon-based Cambia Health. The Wall Street Journal estimated the deal would cover more than 6 million people and generate about $16 billion in combined revenue.

Conway was slated to lead the restructured company. With that in mind, Causey was disturbed to find out from the news that the CEO had been charged with driving while impaired, reckless driving and misdemeanor child abuse (for driving impaired with his children in the car).

The wreck happened June 22. Causey says he didn’t learn about it until the week of Sept. 18. As media outlets reported news of the arrest, Conway asked for Causey’s discretion. “We would appreciate if you don’t make a public statement,” Conway wrote in a Sept. 20 email.

Causey ignored that request. Instead, he publicly called on Blue Cross NC to find a temporary replacement CEO until Conway’s criminal charges were resolved. When more details of the wreck emerged, Causey announced he had lost faith in the merger and in Conway’s ability to run the company.

By Sept. 23, Conway had resigned and the companies had canceled their merger.

“Here was a man, it was documented, driving over 90 miles in an impaired condition,” Causey said. “I was told by the police chief in Randolph County … that five different motorists in five different counties called in this license plate number.”

If Conway were a legislator, “people would be asking for this legislator to resign, immediately,” Causey said.

Then again, political behavior can vary widely these days, along with its expectations and its consequences.

Maybe that’s why Causey stands out.

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This story was originally published November 12, 2019 at 1:24 PM with the headline "Lesson from a pair of scandals: This North Carolina Republican won’t be pushed around."