FBI PROBES OKLAHOMA REGULATOR OVER RECEIVERSHIP CONTRACT

OKLAHOMA CITY-The Federal Bureau of Investigation is investigating Oklahoma Insurance Commissioner John P. Crawford over contracts he allegedly awarded on behalf of an insurance company in receivership, government officials in Oklahoma said last week.

The investigation, of which Mr. Crawford's office denies any knowledge, stems from charges that the commissioner allegedly awarded his son's computer software company $150,000 in contracts to provide services for American Standard Life & Accident Insurance Co., an insurer that has been in receivership under the Insurance Department's control since 1991.

The department allegedly contracted with Mr. Crawford's son's firm, Actuarial Software Inc. of Incline Village, Nev., to write computer programs to help with the financial administration of American Standard, according to the Daily Oklahoman. The software also was meant to improve and modernize data processing for receiverships.

State auditors "have been contacted by the FBI within the past few weeks" about the contracts, said Oklahoma Ausitor and Inspector Clifton Scott. Three state auditors have worked with the FBI on the investigation in the past month, he said.

The FBI would neither confirm nor deny the investigation.

The investigation was first reported June 1 by the Daily Oklahoman, a newspaper serving the Oklahoma City area, and is the latest in a series of problems Mr. Crawford has faced since taking office in January 1995.

In a separate action, a former Insurance Department employee is suing Mr. Crawford, his former chief of staff and his general counsel in federal court in Oklahoma City, alleging sex discrimination.

State auditors also found that Mr. Crawford had hired an attorney and two investigators who did not meet Oklahoma standards for appointed office.

The American Standard contract investigation stemmed from an anonymous complaint that state Rep. Russ Roach. D-Tulsa, said he received in March 1995. The complaint detailed an alleged relationship between American Standard and Mr. Crawford's son's computer firm.

Because the Legislature was incapable of investigating the charges, Rep. Roach brought the complaints to Mr. Scott, who was in the process of conducting a routine audit of the Insurance Department.

"I specifically asked for this thing to be looked into," Rep. Roach said.

The computer services contracts were "a huge waste of money, a questionable expenditure," he charged. With the insurance company in receivership, he said, the department should not increase its liabilities.

American Standard, which was first licensed in 1966 and wrote life, accident and health insurance, had assets of $23.2 million and liabilities of $60.7 million, according to the Daily Oklahoman. The paper did not say when those figures were calculated, and the Insurance Department referred calls to the insurer's receiver, who could not be reached for comment.

A spokeswoman for the Oklahoma Insurance Department said the allegations about Mr. Crawford awarding contracts to his son were lies, adding "he has never been investigated by the FBI to my knowledge."

Efforts to contact Mr. Crawford directly were unsuccessful.

In the course of the state's audit of the department, Rep. Roach requested that Mr. Crawford sign an affidavit declaring he had never used his office to give business to his son. According to the audit, Mr. Crawford signed the affidavit, stating his son had "never been hired, employed by, nor contracted with American Standard." The affidavit also stated that hiring by the company in receivership, American Standard, followed standard procedures.

The audit, which was released in February 1996, did not contain any findings on the alleged contracts. Instead, Mr. Scott said he referred the claim to the FBI.

"It was my understanding when I was there that he had contracted with his son on a computer deal," said Julie Kramer, special counsel to the executive director of the House of Representatives. Ms. Kramer was a general counsel for the Oklahoma Insurance Commissioner between February and November 1995, when she quit the post.

Meanwhile, the commissioner faces other legal problems stemming from his time in office.

Mr. Crawford, a Republican elected to a four-year term in November 1994, is currently fighting a sex discrimination suit, according to Rep. Roach.

Former Insurance Department investigator Victoria McNally is suing the commissioner and two former members of his staff for alleged discrimination.

The civil suit was filed April 4, 1996, in the U.S. District Court in Oklahoma City, and is scheduled to go to a jury trial July 14.