Ohio AG Says Marsh Resists Antitrust Probe

Ohio Attorney General Marc Dann said he has gone to court to compel Marsh insurance brokerage to comply with his office's demand for company documents in an antitrust investigation of the firm.

Mr. Dann said he had moved in Cuyahoga Common Pleas Court to secure 614 boxes of documents related to Ohio companies.

The case stems from investigations begun in 2004 by former New York Attorney General Eliot Spitzer concerning volume-based contingent fee commissions on commercial insurance.

New York-based Marsh & McLennan, the parent company of Marsh, reached an $850 million settlement with Mr. Spitzer's office that ended a suit brought against the company over allegations that the fees served as kick-backs to reward brokerage steering and bid-rigging. The money is being paid to clients affected by the practice.

Companies that agreed to accept the payments dropped any additional claims against the companies.

However, Mr. Dann, who is continuing an investigation begun in 2004 by then Ohio Attorney General Jim Petro, is seeking to learn how Marsh's practices affected the state's businesses.

In a court filing, Mr. Dann's office contended that while the attorney general has made every effort to pare down the volume of material requested, Marsh has not produced the requested documents and has now ceased providing any items.

The attorney general said the state has engaged in negotiations with MMC over the documents, but those talks have not resulted in an agreement.

Some of the Ohio clients Mr. Dann alleges were affected by Marsh's practices include Diebold Corp., Huffy Corp. and J.M. Smuckers. The attorney general said he is seeking information about a total of 46 Ohio companies.

According to Mr. Dann's office there were local and global broking unit files and the attorney general has received only the global broking files from Marsh.

The legal papers filed by Mr. Dann allege that the local Marsh office in Ohio engaged in false bids apart from the global broking unit.

In a letter from attorneys for Marsh, the company said copying and date stamping of the 614 boxes of documents could not be completed by the Feb. 22 deadline the Ohio attorney general set. The office said the documents could be delivered by April 20.

Today, Mr. Dunn announced a $144 million settlement between AOL and five state pension funds over misrepresentation to investors of the company's value at the time of the AOL-Time-Warner merger in 2000.

While not addressing the MMC case, on the issue of corporate malfeasance he said, “We are going to make sure that our seriousness about corporate governance, about protection of investors, about disclosure and about ending corporate fraud is heard not just in Ohio, but across the country.”

Late today a spokesman from Marsh issued a statement saying the firm was disappointed in the attorney general's decision, adding that the company has cooperated with the office for the past two years.

“The new attorney general in Ohio has filed a motion that does not does not take into account the sweeping business reforms and extraordinary remedial actions taken by Marsh since 2004,” the statement said.

Marsh said Ohio clients were offered more than $35 million as part of the $850 million settlement, and more than 98 percent have accepted that amount. Ninety-nine of the firm's 100 largest clients in the state accepted the settlement, Marsh added.

The firm also noted that Ohio's chief of the Antitrust Section in the Attorney General's office accepted the settlement on behalf of numerous Ohio public entities, releasing Marsh of all claims and attesting to the fairness of the agreement.

Marsh said it has produced “tens of thousands of pages of documents” and intends to continue doing so in the coming weeks.

(This story was updated at 3:55 p.m.)