The Chicago Tribune reported that State Farm allegedly defrauded the Illinois Supreme Court by covering up that it funneled millions of dollars into the campaign of Illinois Supreme Court Judge Lloyd Karmeier. After he was elected to the Illinois Supreme Court, Karmeier refused to recuse himself from a pending State Farm appeal and voted to overturn a billion dollar judgment against State Farm.

According to the Tribune, the seemingly sordid saga began more than a decade ago:

The Illinois case dates back to 1997 when it was filed in Williamson County. The suit alleged State Farm breached its contract with policyholders when it directed the use of non-original parts in vehicles damaged in crashes. A jury awarded $465 million to some State Farm customers. Williamson County Associate Judge John Speroni awarded $730 million to other policy holders.

In 2001, an intermediate Appellate Court affirmed the $1.05 billion judgment. As the case approached the Illinois Supreme Court, Karmeier threw his hat into what was one of the most expensive judicial elections in U.S. history.

Karmeier won that race, became a member of the Illinois Supreme Court and, after refusing to recuse himself from the case, voted to overturn the billion-dollar verdict against State Farm.

According to Cynthia Hsu, of the Strategist:

“At the time, it was known that Judge Karmeier received donations from State Farm during his judicial race. Karmeier declined to recuse himself.

The State Supreme Court analyzed the potential bias at the time, and found none. They thought State Farm had only raised $350,000 of Karmeier’s donations.

Why would they think State Farm only raised $350,000? That’s because $350,000 is the amount that State Farm told the court they donated when they were asked.”

According to reports, a FBI investigation discovered that State Farm actually funneled between $2.4 and $4 million in donations into Karmeier’s judicial campaign.

Based on these reports, State Farm used policyholder premiums to defraud the Illinois justice system and essentially buy a verdict in Illinois. If these allegations are found to be true, our elected officials and Department of Insurance regulators should consider whether State Farm is a corporate citizen worthy of license to sell insurance. They should investigate how State Farm uses its vast wealth to influence government and the judiciary at the expense of its customers and the public trust.

  • Chip, great article. I further believe if this is found true about State Farm in Florida, they should either have to, once again offer homeowner’s insurance in Florida or per statute, not be able to just sell lucrative auto insurance only. Otherwise, get out of Florida all together. We don’t need them. They need us!

  • Sparky

    Also, not surprising.

  • Lilly

    State farm is the worst insurance company I know, they always deny your claim even thought when that person that hit to you say that is her fault, you can’t truth in this company because is to waste your money, they are very irresponsible.