Frank was brought in to run State Fund after problems emerged in 2006, when the State Fund board uncovered potential conflicts of interest and self-dealing by its members and executives, prompting investigations by Poizner, the California Highway Patrol and the San Francisco district attorney. Some of the alleged conflicts involved State Fund's sale of policies through employee associations that had ties to former board members and earned millions of dollars in fees.
Frank was not the only executive hired to turn State Fund around, nor the only one paid highly and allowed to commute from another state.
Doug Stewart, the chief risk officer and current interim president, earns $488,000 a year, not including his performance bonus, and flies in from Washington state. Becky Wanta, the chief information officer who resigned last year, earned $430,000 and traveled from Nevada.
But State Fund most ardently tried to please its new president with perks that, though standard in many private corporations, can raise eyebrows when enjoyed by government officials.
Rich Shoemaker, a recruiter, told Frank that State Fund would buy any vehicle valued at up to $32,000 for her use. "The garage is staffed by an individual who will gas and wash the car at your request," Shoemaker wrote in an e-mail. "As company cars go -- it is a sweet deal!"
Frank initially agreed to a hiring bonus of $123,250, from which taxes would be withheld. When she complained about the taxes, the board gave her an additional $16,500, according to records and interviews. Jeanne Cain, State Fund chairwoman, said there was "a miscommunication," although the board, in its resolution to increase the bonus, attributed the move to "tax code changes."
Frank had agreed to move to California. The offer letter she signed said her bonus could be used "for such items as real estate fees, closing costs, movement of household goods, temporary living and travel expenses prior to the move, and expenses in transit."
Despite that language, Cain told The Times in an e-mail that Frank was allowed to use the money as she pleased. Cain said State Fund permitted Frank to commute because she didn't want to sell her house in a poor real estate market.
While at State Fund, Frank worked 3 1/2 days in San Francisco some weeks, arriving Monday morning and departing midafternoon Thursday, her expense reports show. On business trips to Las Vegas, London and Bermuda, her hotel rooms cost up to $519 a night.
State policy on business expenses for most employees establishes allowable hotel rates at $84 to $140 a night plus taxes; exceptions may be approved in advance.
The effort to fix State Fund's problems is still a work in progress, according to Poizner. And the investigations that led to Frank's hiring continue.
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