EAST CHICAGO | The city is shopping around for a so-called "crime insurance policy" to cover the behavior of employees, commissioners and other workers.
A recent State Board of Accounts audit suggested that the city buy such a blanket bond policy, something never before done in East Chicago, Kimberly Anderson, interim city controller, told the City Council last week.
Some employees who accept money or write checks currently are covered by individual fidelity bonds based on their positions, Anderson said, but a policy insuring against dishonest, fraudulent or criminal acts by all people acting on behalf of the city is something new.
Eleven East Chicago officials have been convicted of financial crimes over the past decade. Two, former Mayor George Pabey and former City Controller Edward Maldonado, are serving federal prison sentences, and a third -- former City Councilman Frank Kollintzas -- is believed to have fled the country to avoid a similar punishment.
The state would be the beneficiary of the crime bond, Anderson said, so if some misappropriation of funds were discovered, and the attorney general's office were unable to collect the money from the person responsible, the insurer would pay off the claim, not the city.
Anderson said she was not sure how much that type of policy would cost because state law would require approval from the City Council before she could begin soliciting formal proposals from potential vendors.
The council adopted an ordinance allowing up to $300,000 coverage for the crime insurance policy.
Current city individual and position fidelity bonds are held by Merrillville-based Braman Insurance Services, and Anderson said she would factor in the cost of the existing coverage when seeking the wider blanket policy.
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