A graphic in a Democratic TV ad falsely states that New Jersey GOP House candidate Tom MacArthur was “accused of cheating disaster victims.” MacArthur was once the chairman and CEO of a claims and risk management company that was accused, but MacArthur was never personally cited for any wrongdoing.
In fact, the narrator of the 30-second ad, from the Democratic Congressional Campaign Committee, was more on target, saying, “MacArthur ran an insurance company accused of cheating hurricane and wildfire victims.” But the image on the screen accompanying the narrator’s words goes beyond those facts.
The ad also claims that “while people suffered, MacArthur walked away with $39 million.” That’s misleading. The ad cites a news story about the announced sale of MacArthur’s former company, York Risk Services Group, in 2005, but that was years before the company was sued for its handling of claims stemming from Hurricane Ike and a California wildfire in 2008.
Plus, the ad says that “in Congress, MacArthur wants to help insurance companies jack up rates and deny people coverage.” But the source for that claim is a newspaper article that mentions MacArthur wants to repeal the Affordable Care Act, which has nothing to do with the issue of property insurance, the focus of the ad.
The ad’s narrator says, “MacArthur ran an insurance company accused of cheating hurricane and wildfire victims,” while a graphic shown on screen reads, “Tom MacArthur ‘Accused Of Cheating Disaster Victims.’ ” The narrator is right. The graphic is wrong.
Tom MacArthur was the chairman and CEO of York Risk Services Group Inc. from 1999 to 2010. The ad describes MacArthur as an “insurance CEO,” but York is really a claims and risk management company that provides services, such as claims processing, for insurers and other companies.
It’s true that York, as a claims processing agent, was the subject of two lawsuits and a state complaint stemming from the company’s handling of insurance claims for victims of both Hurricane Ike and the Sayre Fire in Sylmar, California, in 2008.
Houston Baptist University filed a lawsuit against York and ACE American Insurance Company in 2010 seeking payment to repair damages caused by the hurricane to a campus administrative complex. The university’s president, Robert B. Sloan Jr., accused the insurance company of not paying “what they owe us under our coverage,” according to The Collegian, the university’s student publication. “They drug their feet” and “weren’t very responsive,” the paper quoted Sloan as saying.
Likewise, the Port of Galveston, Texas, sued York and the Lexington Insurance Company for $15 million in unpaid insurance claims for damages related to the same hurricane.
And the California Department of Insurance filed an enforcement action against York and the New Hampshire Insurance Company in 2012, regarding their handling of insurance claims tied to the 2008 wildfire in Sylmar, California. CDI, in response to complaints from policyholders whose homes were lost in the fire, said that it investigated York and the insurance company “for 125 violations of the California Insurance Code, with each violation representing an alleged unfair or deceptive act.”
All three cases involving York were later settled after MacArthur had left the company.
While the ad’s narrator can fairly say that “MacArthur ran an insurance company accused of cheating hurricane and wildfire victims,” it’s wrong to say, as the accompanying screen graphic does, that MacArthur himself was personally accused of cheating victims.
The fact that he wasn’t accused was a point made clear in the very Daily Mail article cited in the TV ad. “MacArthur, the New Jersey congressional candidate, is not named personally in any of the legal actions described in this report, but he was both a York officer and a major shareholder,” the report said.
Anyone watching the ad without audio, or even someone listening to the ad but not paying close attention to what is being said, could be misled by the ad’s visual. It’s a pattern of deception our sister website, FlackCheck.org, calls “Seeing What’s Not Heard.”
Update, Aug. 21: After we published this item, the DCCC changed the image in the ad to read “Tom MacArthur’s Company ‘Accused of Cheating.’” The revised ad began airing on Aug. 19, the DCCC said in a statement emailed to us. “We added the word ‘company’ to the screen to match the narrator’s existing audio,” the statement said.
The ad also claims that “while people suffered, MacArthur walked away with $39 million.” But that, too, leaves a false impression.
The ad isn’t referring to a payout MacArthur received after leaving the company in 2010. Instead, the ad cites a December 2005 story from The Deal, an online publication, about an agreement Odyssey Investment Partners LLC made to purchase York for around $105 million.
As part of the deal, MacArthur agreed to sell his half of the company to Odyssey for $39 million plus an additional dividend payment. The acquisition was finalized in May 2006, with MacArthur staying on as chairman and CEO of the company. So MacArthur received his money long before the natural disasters, and subsequent lawsuits, ever occurred.
In addition, the ad claims that “MacArthur wants to help insurance companies jack up rates and deny people coverage” if elected to Congress. Viewers might assume the ad is referring to him helping property or casualty insurance companies. It’s not.
The ad is actually referring to MacArthur’s opposition to the Affordable Care Act. The Courier-Post article cited in the ad says that MacArthur and Steve Lonegan, whom MacArthur defeated in the GOP primary, “both want repeal of Obamacare.” But the federal health care law has nothing to do with the disaster relief insurance claims that are the subject of the ad.
The ad, one of the DCCC’s first two independent expenditure ads of the midterms, began airing on cable in New Jersey’s 3rd Congressional District on Aug. 12. MacArthur is running against Democrat Aimee Belgard.
— D’Angelo Gore