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“Dead Americans” Insurance By: Lowell Ponte
FrontPageMagazine.com | Tuesday, December 23, 2003


IN "DEAD SOULS," NOVELIST NIKOLAI GOGOL TELLS OF A STRANGE MAN in 19th Century Russia who buys up the contracts of recently-deceased serfs.

The land barons were happy to sell in this 1842 novel because this saved them the tax the czar demanded for each serf, living or dead, who for even a day during the latest census had worked on their estates.

But what did the mysterious buyer get for his money? Was he the devil acquiring souls for hell? Or purchasing the soul of Mother Russia herself through the paperwork of this evil, slave-like institution of serfdom? Gogol leaves the reader to ponder this.

American capitalism has created a similar institution, implies hyper-Leftist huckster Michael Moore in his latest bestselling hate screed against America and free enterprise, "Dude, Where’s My Country?"

"Dead Peasants Insurance" is what critics such as Moore have nicknamed this institution wherein businesses take out life insurance policies on employees – and as the beneficiaries of these policies can collect sizeable sums, tax-free, if an employee (or sometimes ex-employee) dies. (The more neutral, if bacterial-sounding term is COLI, for Corporate-Owned Life Insurance.)

Among the hundreds of companies that have taken out such hedging policies on the lives of valuable employees are Wal-Mart and Walt Disney, Winn-Dixie markets and Dow Chemical, Nestle and Enron, Pitney Bowes and Procter & Gamble, AT&T and J.P. Morgan Chase.

Corporate America reportedly pays as much as $8 billion each year in premiums for such policies, which make up more than 20 percent of all the life insurance sold here each year. Such insurance policies today cover more than 6 million rank-and-file workers. By some estimates it costs the U.S. Treasury $6 billion each year and has been targeted by the Internal Revenue Service, which has led several of the above corporations to reconsider this "attractive, off-balance-sheet asset."

Critics call it ghoulish and unfair when corporations receive more insurance money from a janitor’s or office worker’s death than does his or her surviving spouse and children.

Moore and other Leftist critics also express shock that workers might not even know that their company has taken out a life insurance policy on them, the proceeds of which will go to the company if and when they die. Many companies have kept the existence of such policies secret from their employees….and kept knowledge of big insurance policy payouts to the company secret from dead employees’ families.

Moore, of course, is a master of the whole lie and half truth, as he demonstrates here. He does not tell his readers that companies can take out a life insurance policy without an employee’s permission or knowledge only because six states allow this to be done by employers headquartered in any other state in the Union.

Those six "Dead Peasant Insurance" states are Delaware, Georgia, New Jersey, North Carolina, Pennsylvania – and Vermont!

That’s right, Vermont, where Democratic presidential frontrunner Howard Dean ruled from August 1991 until January 2003 as Governor.

When he stepped down, Mr. Dean ordered his gubernatorial records of private meetings and secret agreements put under seal for much longer than the customary time to make it as hard as possible for reporters and political rivals to dig out what special interest dirt Dean wallowed in.

The Boston Globe has deduced at least one of the areas Dean may have hoped to cover up about his back room deals as Governor. It reported on December 12 that Dean was up to his eyeballs in trying to lure "captive" insurance companies, subsidiaries of larger corporations used to insure their mother company, to "overtake Bermuda" and make Vermont the "world’s largest" haven for these enterprises.

Such "captive" insurance companies, sniffed John Benson of the Left-of-center New Republic magazine, are "essentially a way to shield corporate profits…." Or as Benson and the Boston Globe quoted one University of Connecticut law school professor: "Dean apparently has no problems with tax havens as long as they are in the state of Vermont."

And Howard Dean understands the nuances and subtleties of such machinations better than most. Howard Brush Dean III was, as this column more than four months ago documented, the "ultimate WASP," born into a wealthy and privileged family of several generations of millionaire Park Avenue investment bankers who knew how to make, shift and shelter money. This, in fact, may explain Dean’s haughty air of superiority and arrogant smugness.

During his 11-1/2 years as Vermont Governor, Dean turned into the back room wheeler-dealer today known as the "captive candidate" for President. Remarkably, he has conned young latter-day idealists in the Democratic Party into believing he is a man of principle and outspoken honesty.

Did Dean’s involvement with powerful insurance interests go beyond these "captive" companies to include those making huge profits from writing "Dead Peasants Insurance?"

If Howard Dean would unseal his records as Governor, this question could probably be answered beyond a reasonable doubt. But because of Dean’s cover-up – call it "Vermontgate" or "Ben & Jerry-gate" – those of us seeking truth in politics must draw inferences from the evidence available.

We know that during his Governorship the controversial company Enron got deeply involved in Vermont. As Benson observed in The New Republic, "Enron opened an office in Montpelier to take advantage of the deal" Dean offered as a tax haven to its "captive" insurance entity. That entity, created by Enron in December 1994, is Gulf Company Ltd, managed by USA Risk Group in Montpelier.

But Enron was also among the companies most heavily involved in "Dead Peasants Insurance," reportedly taking out $500 million worth of policies on its workers and using the proceeds to benefit its top executives.

Given that Enron established a major insurance affiliate in Vermont, one of only six states that was permitting the writing of such policies on employees without either notifying them or getting their permission, can we assume that Enron took advantage of this nexus?

And can we assume that, in currying favor with Governor Dean, Enron almost certainly pointed out to him how many additional millions of dollars in premiums this brought into Vermont’s economy and tax revenue coffers?

(Dean now condemns Enron, of course, while continuing to conceal his records as Governor that could show his involvement with the now-bankrupt company.)

Two percent of Vermont’s entire state budget came from "captive" insurance companies alone.

It would be naïve beyond imagining for anybody to assume that Governor Dean was unaware of Vermont’s profiteering not only from "captive" insurance but also from "Dead Peasants Insurance," in which it was one of America’s biggest underwriters.

So why did partisan Michael Moore give his readers only a tiny part of whatever truth might be here?

If "Dead Peasants Insurance" is the terrible evil – albeit legal – that Moore wants us to believe it is, then Governor Howard Dean has been a greedy and grasping accomplice up to his hot red earlobes in that evil.

Knowing this, no honorable Leftist could now vote for Howard Dean for President. (Hey, maybe that’s why mega-Leftist Moore concealed this information from the Leftist sheep.)

But on the eve of this election year, I have a larger concern.

As we ponder the exploitation of dead souls and dead peasants, I see some politicians and activists among us who are investing in a policy of exploiting dead Americans. This must stop.

We are in a War on Terror. This is war time.

President George W. Bush’s Administration, despite its eagerness for economic recovery, this past weekend put public safety above its own political self-interest.

President Bush had his Chief of Homeland Security issue a High Level Orange Alert. The President knew that this would make America safer – but knew, too, that during the most important shopping days of the year this would deter many from flying to visit loved ones or trekking to the mall to buy more gifts.

The good of our nation now likewise requires the Democratic candidates running to replace President Bush to make a similar sacrifice. Several of these candidates have been positioning themselves, cynically, to condemn and attack President Bush if another 9-11 terrorist attack devastates America.

Such political posturing encourages terrorists such as Osama bin Laden.

It signals such killers that they can "vote" in our election by using their bombs and bullets as ballots.

It sends terrorists the message that by attacking our cities they can do more than strike fear or cause more economic disruption. It tempts Islamists to believe that they can defeat President Bush by putting explosive power behind the words of his war critics among the Democratic candidates.

And for their part, candidates such as Howard Dean have been all too eager to invest in "Dead Americans Insurance," positioning themselves to use any terrorist act as a reason to attack and undermine the Commander-in-Chief.

These Democrats are preparing to climb to the presidency on the bodies of any dead Americans who might be murdered within our shores by terrorists. This is as contemptible as it is disgusting.

On Monday, for example, Senator John Kerry (D.-Mass.) said that the President should order every package on every airliner searched by hand – a demand that if carried out would anger and aggravate travelers and shippers, but that if not carried out 100 percent would allow Kerry to say "I told you so, and as President I could have prevented this" should terrorism occur.

Such high-handed and unnecessary public demands by politicians are the cheapest, sleaziest sort of grandstanding. This childish attempt at a self-aggrandizing set-up shows clearly that Senator Kerry is morally and intellectually unfit to be President of the United States.

It’s time for America’s most highly-regarded journalists such as NBC’s Tim Russert, the Washington Post’s David Broder, the Chicago Sun-Times’ Robert Novak, and Brit Hume of Fox News Channel to put some very, very grown-up questions to the Democratic candidates:

"Will you agree not to exploit for your own political advantage any terrorist attack in the United States between now and the November 2004 election by using that attack to criticize the President of the United States?"

"Will you agree to stand in wholehearted solidarity and unity with our President in the event – God forbid! – of any such attack inside our borders?"

"Will you send a message with your words right now that no new 9-11 terrorist attack on America will become a wedge splitting our democratic republic apart?"

"Will you declare that any such attack will bring rival political leaders of our country, yourself included, together – and that therefore no act of terrorism will be able to tip the balance in our elections or let terrorists think they can pick our next President?"

Any of these candidates who hesitates in even the tiniest way to declare unwavering support for our Commander-in-Chief in the face of another 9-11 terrorist attack will have demonstrated an unfitness and unworthiness ever to be President.

On some issues every politician must put the good of the nation above his or her own ambition. A direct attack on America in time of war is the highest and most important of those issues.

We have the right to know now, before the first caucuses in Iowa and votes in New Hampshire, whether the candidates aspiring to become President measure up to this minimum measure of stature, integrity, selflessness and leadership.

Do they have good hearts or dead souls? Do they support America, or are they betting against it and thereby giving encouragement to foreign terrorists?

Let’s bring the TV cameras in for a "60 Minutes" close up on their faces as each is asked these tough questions. Let’s see what they are really made of.


Mr. Ponte co-hosts a national radio talk show Monday through Friday 6-8 PM Eastern Time (3-5 PM Pacific Time) on the Genesis Communications Network. Internet Audio worldwide is at GCNlive .com. The show's live call-in number is 1-800-259-9231. A professional speaker, he is a former Roving Editor for Reader's Digest.


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