Crop Insurance:

Conflict-of-Interest Problems Involving an FCIC Official

RCED-88-24: Published: Dec 18, 1987. Publicly Released: Dec 18, 1987.

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In response to a congressional request, GAO examined an individual's action as a Director and manager of the Federal Crop Insurance Corporation (FCIC) to determine whether any potential conflict of interest existed between his private business interests and FCIC responsibilities.

GAO found that the individual's voting record and actions during his tenure with FCIC appeared to be in violation of conflict-of-interest laws, since he: (1) favored three motions to change the standard sales and service agreements with reinsured companies to the benefit of the firm that employed him; (2) accepted $2,400 for participating in two conferences that his employer sponsored with other organizations; and (3) received periodic cost-of-living increases from his firm's retirement annuity plan. GAO also found that: (1) upon his appointment to the FCIC board, the member sold the stock he owned in a brokerage firm doing business with reinsured companies; and (2) although the Department of Agriculture provided the member with written guidance on how to avoid conflict-of-interest situations, it did not grant him a waiver.

Recommendation for Executive Action

  1. Status: Closed - Not Implemented

    Comments: Conflict of interest was eliminated shortly after the report was issued because the subject of the report resigned from Office.

    Recommendation: The Secretary of Agriculture should direct Mr. Fosse to abstain from participating in FCIC matters affecting the Crop Hail Insurance Actuarial Association unless and until the Secretary grants him a waiver of 18 U.S.C. 208 prohibitions.

    Agency Affected: Department of Agriculture


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