EIGHT OF THE FEW: STATE FARM INSURANCE AND MCKINSEY & COMPANY, INC
(Valdez Is Coming, Elmore Lenard, 1970)
In 2010, State Farm was rated as one of the “worst insurance companies in America” by the American
Association of Justice (AAJ).
This was an incredible accomplishment when you consider the corporate practices of the insurance
industry in general. When dealing with this “predator” industry, you are not “in good hands”; they are
not “like a good neighbor”; and/ or they do not “provide the strength to be there.”
AAJ’s “top ten”, “worst”, insurance companies were: Allstate, Unum, AIG, State Farm, Conseco,
WellPoint, Farmers, United Health, Torchmark, and Liberty Mutual.
(This work will focus upon “number four” on this list: State “the jack of diamonds” Farm. In truth,
anyone of these “top ten”, criminal enterprises could have been chosen.)
And, McKinsey & Company, Inc. is “notorious” for helping its fellow, “oligarchic”, corporate “equals” in
immorally, in unethically, and in illegally increasing their profits: that is, always put your profits ahead of
your customers, “deny, delay”, and defraud, and always overpay your CEO’s for their “anything goes”
practices (as long as these practices lead to higher levels of profitability).
(An ampersand, “&”, is a “logogram” [a grapheme which symbolizes a “word”] which represents the
conjunctive word, “and.” The symbol, “&”, is a “ligature” [two or more graphemes are jointed into a
single “glyph” [a mark on a written page that contributes to the meaning of what is written] of the
letters in the Latin word, “et” [meaning the English word, “and”].
The ampersand’s shape [In popular etymology, its usage is attributed to the great Andre-Marie Ampere
{1775-1836}: one of the discoverers of the phenomenon of electromagnetism.] is sometimes referred
to as “Ampere’s and.”
Today, the ampersand is rarely utilized. Still, it survives in the formal names of businesses, especially in
“firms” and in “partnerships” [which specialize in law, in architectural, in financial services, and in
thematic “fraud”]. In such usage, the “comma” should not follow the ampersand.
“Oligarchs” really, really like “ampersands.”)
State Farm Insurance (SFI) is a “group” of insurance and financial services companies in the United
States and in Canada. SFI’s core business is State Farm Mutual Automobile Insurance Company
(SFMAIC): a mutual insurance firm. It offers insurance, banking and investing services, and it is
headquartered in Bloomington, Illinois (USA).
SFI has approximately 68 thousand employees. Currently, Edward B. Rust, Jr. is SFI’s fifth chief executive
officer (years served, 1985-present). His family has been in control (of the company) since 1954 (past,
family CEO’s: Adlai Rust, grandfather and Edward B. Rust, Sr., father).
(A mutual insurance company is owned entirely by its “policyholders. This ownership encompasses all
its policyholders or is restricted to “certain classes” of policyholders. Surplus funds (“profits”) are paid
to policyholders on a yearly basis.
The American, mutual, property/casualty, and insurance industry was founded by the great Benjamin
Franklin (1706-1790) in 1752. [That is, he established the Philadelphia Contributionship for the
Insurance of Houses from Loss by Fire company which, in turn, created the industry within the United
States.] But, the “mutual” concept was not originated, and it was not developed in the United States.
This happened in England during the 1690’s.
Parenthetically, the mutual property/casualty insurance industry was one segment, within the financial
services sector, that did not need or that did not ask for a financial “bailout” in the 2008, global, financial
crises.
The “infamous” American International Group (AIG) was represented as an “insurance giant” in these
crises. AIG, in fact, was a holding company of a diverse group of businesses of which only some were
insurance companies.)
SFMAIC is the parent company to the following subsidiaries (A subsidiary is a legal entity which is
controlled by a separate, higher, legal entity.): State Farm Fire and Casualty Company; State Farm Life
Insurance Company; State Farm and Accident Assurance Company; State Farm County Mutual Insurance
Company of Texas; State Farm Mutual Insurance Company of Texas; State Farm Indemnity
Company/State Farm Guaranty Insurance Company; State Farm General Insurance Company; State Farm
Florida Insurance Company; State Farm Lloyds; State Farm Bank, F. S. B.; State Farm Investment
Management Corp. (SFIMC); and State Farm VP Management Corp. (SFVPMC).
SFI was founded on June 7, 1922 by a retired farm, a George J. Mecherte (years served, 1922-1937). In
1999, SFI started offering financial services because of the Gramm-Leach-Bliley Act (GLBA) of 1999.
(See e-article “15” on this website.)
As of 2007, SFI reported the following, financial data: revenues of 61.6 billion (US$); net income of 3.7
billion (US$); total assets of 104.8 billion (US$); and, total equity of 58.1 billion (US$).
McKinsey & Company, Inc (MK&C) is a global, management, consulting firm that focuses upon “solving
issues of concern to senior management.” It serves as advisors to a number of “businesses,
governments, and institutions”: it is acknowledged as one of the “most prestigious firms in the
management consulting industry.” The firm is owned by its “partners.” It has approximately 17
thousand employees. Its New York address is: 55 E. 52nd Street, 21st floor, New York, N. Y. 10022.
That is, it likes “to fix” the problems of the “oligarchs”, exclusively, for as much money as they can get:
MK&C knows how to take the “competition out of competing” for its clients as well as for itself.
In 2009, MK&C annual revenues were estimated to be 6.6 billion (US$).
MK&C was founded in 1926 by James Oscar “Mac”McKinsey (1889-1937) and Marvin Bower.
(“Mac” wanted to extend his professional focus in order to help “healthy companies to become
healthier” through his “superior”, academic understanding of management theory and its applications
to “real world” business “problems.”)
MK&C is organized as a corporation, but it functions as a partnership.
MK&C’s current, “managing director” is Dominic Barton. The managing director is elected to a threeyear term with a maximum tenure of three terms. Besides Barton, its “key” partners are Ron Daniel
(senior partner emeritus), Fred Gluck (senior partner emeritus), Rajat Gupta (senior partner emeritus),
and Ian Davis (senior partner emeritus).
MK&C stresses confidentiality within its organizational and with its clients. This emphasis is so well
managed that it prevents public examination and public assessment of its client base, its company
activities, its success rate, and its profitability. And, MK&C even extends this “stressed” confidentiality
to its former employees.
MK&C states that it “competes at every level” and that it has the “best of the best.” At MK&C, it is “up
or out.”
Since 1996, it has been the “top employer” of annual, MBA graduates according to its public rations
component.
Although MK&C operates under a “cloud of secrecy”, SFI has been reported to have been or is one of its
clients: MK&C has advised or is advising SFI to defraud some of its “policyholders” in order to increase
profit margins.
And, SFI “forces and/or bribes” its employees into engaging in felonious behavior so that the company
may increase profit levels. For example, SFI [and some of its fellow insurance companies] was advised
[by MK&C] to deny “rightful” claims after Hurricane Katrina in 2005.
(Richard F. “Dickie” Scruggs [1946-present] is a former attorney, and he is one of the wealthiest “men”
in the great state of Mississippi. He increasing lost his way, morally and ethically, after successfully suing
the “asbestos” [Greek for “unquenchable” or “inextinguishable”] industry on behalf of “stricken”,
shipyard workers. “Dickie” was really, really hated by the “oligarchs” for achieving a number of
“settlements” against “big tobacco”, “big pharmaceutical”, and “big insurance.”
In general, “Dickie” liked to win to the point of committing “bribery” and “wire fraud.” Presently, he is
serving a five-year term [bribery] and a seven year term [wire fraud], concurrently, for his criminal
actions [beginning in 2008]. He is scheduled for release in 2015.)
Habitually, MK&C claims competences which are not “reflected by the results” of its consulting
activities.
Some of its clients and some of the results of its “omnipotent”, consulting activities have been the
following:
(1) Enron Corporation (EC). EC was an American energy, commodities, and financial services
enterprise which was based in Houston, Texas. On the advice of KM&C, it falsified its “financial
condition” by the practice of “institutionalized, systematic, and creatively planned” fraudulent
accounting. Jeffrey Keith “Jeff” Skilling, CEO of Enron, was sentenced to 24 years and four
months in federal prison for “multiple, federal, felony charges” relating to the collapse of EC.
SCOTUS, the purchased, front organization of the American “oligarchs”, vacated part of his
convictions on June 24, 2010: “Jeff” was a former partner at MK&C and one of its “loyal”
alumni;
(2) Swissair AG (Swiss Air Transport Company Limited, Schweizerische Luftverkehr). Swissair AG
was the former, national airlines of Switzerland. The Hunter Strategy (designed and advocated
by MK&C) is credited with destroying the “Flying Bank.” This “strategy” promoted the
acquisition of smaller airlines in order to increase market share rather than entering into
alliance agreements. This “strategy” resulted in the financial collapse of the company as well as
the attempted prosecution of its entire management staff for felonious behavior;
(3) Railtract (RT). RT was a group of companies that owned the “track, signaling, tunnels, bridges,
and level crossings” of most of the British railway system. The following of the consulting
advice of MK&C lead to the “dissolution” of the company in 2010: which was to reduce
spending on its “infrastructure” and to return the “savings” to shareholders. The resulting
number of fatal accidents due to “equipment failure” was attributed to this “criminal” advice;
(4) American Telephone and Telegraph Company (AT&T). In evaluating the “cellular phone”
market in 1980, MK&C advised AT&T not to become involved: its analysis indicated that
“cellular phones” would remain a “novelty” rather than developing into a major market; and,
(5) General Electric Company (GE). In an attempt to defend GE Capital’s “inadequate”, financial
performance in 2008, Jeff Limmelt, CEO of GE, cited a MK&C report of 2007. The cited report
stated that “money from nations with a trade surplus, like China, and sovereign wealth funds,
among other investors, would provide enough liquidity in the financial system to fuel lending
and leverage for the foreseeable future.”
Finally, in 2009 and in 2011, Rajat Gupta (MK&C) and Anil Kumar (MK&C) and David Palecek (MK&C) and
Raj Rajaratnam (Galleon Group) were involved in “insider trading.” The U. S. Securities and Exchange
Commission (SEC) charged that these “partners and luminaries” of MK&C for illegally tipping the Galleon
Group with insider information concerning some of its clients.
In 2010, Kumar pleaded guilty, and he was fined 3 million (US$). Also, he became the U. S.
government’s principal witness in U. S. v. Rajaratnam.
The following statements apply to SFI, to MC&C, to SFI and to MK&C, and to the American many:
(1)
(2)
(3)
(4)
(5)
Both SFI and MK&C are criminal emprises who defraud their customers;
Both SKI and MK&C are immune to through and to comprehensive, criminal prosecution;
SFI is “too big to fail”;
MK&C uses client/attorney “confidentiality” in order “to hide” criminal behavior;
SFI’s corporate behavior is representative of the insurance industry: it is representative of the
behavior of “to big to fail” corporations in the United States (and everywhere else);
(6) MK&C’s impact is global;
(7) SFI is an example of why the GLBA is a license for “too big to fail” entities “to corrupt and to
destroy” the political and social structure in which they inhabit;
(8) MK&C is a national and global disgrace to the management, consulting industry;
(9) The many organizations, who are mandated to regulate, to control, and/or to contain such
criminal enterprises as SFI and as MK&C, are as “guilty” as the entities they allow to operate
unlawfully; and,
(10) The many organizations and the many individuals who know of these extreme, injustices and
who do nothing about them are the true “destroyers” in and of a “lawful society.”
Post Script:
(In 1970, Elmore John Leonard, Jr. [1925-present] wrote a “parable” or “allegory” about the American
West. Its time and setting was in the American West sometime after the American Civil War [18611865] had ended. It was entitled, Valdez Is Coming.
[Another title for Leonard’s brilliant work could have been “Mexican Bob” and the Oligarch.]
A “synopsis” and an “extrapolation” follow:
Sheriff Bob Valdez was a compassionate person and he was a caring man who appeared to be a Mexican
American victim of the “white”, social structure of his time. Since he killed an African American
“criminal” in self-defense [who was innocent], he thought that the “oligarch” and his “familiars” [who
were actually responsible for the murder] should “compensate” the victim’s Indian “wife” [a fearless,
female “apache”].
So, ‘Mexican Bob” made a deal with those “familiars” who always “watch injustice”: they would pay
“one hundred dollar” if their “oligarch” would paid a matching “one hundred dollar.” Of course, the
“oligarch” would not pay, and he had his men discard “Mexican Bob.”
They did not “take the time and the trouble” to understand “who” and to understand “what” they were
doing by physically abusing this, apparently, “insignificant” and “helpless” individual.
Eventually, they paid one way or another: all of them. Bob was very, very good at killing.
You see: Bob hunted the “apache” for the U. S. Army in the early 1860’s [in the Southwestern United
States] when he “did not know any better.” He was an U. S. Army Scout whose job was to hunt and to
capture the warriors of some of the best “light cavalry” units in that era.
[Cowards were really, really afraid of the “apache”: the “apache” warriors were Audie Leon Murphy
scary.]
Bob was willing to die for his beliefs: the believers in “American Exceptualism” were not. They should
have paid “the two hundred dollar”: it simply was the moral and the ethical thing to do.)
“Oligarchs”: stay away from the “social security programs” of “FDR”, of “LBJ”, and of the American
many or else the “Valdezs” of the American diversity will be “coming” for those who feed on the
existences of the “insignificant” and the “helpless.”
Do you know what you can do with your “ampersands?!”
To hell with the “oligarchs” (SFI, MK&C, EC, Swissair AG, RT, AT&T, and GE) and their “familiars” (the SEC
and the SCOTUS),
Fromoneofthemany