Well, the good news is that my patience has paid off: Mayor Karl Dean is authorizing Metro Government to provide free identity theft coverage to Davidson County residents who could be the victims of the Christmas Eve theft of 337,000 social security numbers. According to the contract, any Nashvillian who wants the first full year of identity theft coverage will get it for free, and the second year will cost them a substantially reduced price ($9.50 down from $99).
The bad news is that I and you still have to pay for the coverage: Metro will pay $9.75 per account for the first 20,000 covered and $9.25 for all others. The private provider--Debix Identity Protection Network--looks to make a lot of money off this deal. Because our government is at fault we the taxpayers have to foot the bill, unless Metro can get the private security companies to pay something. They have already been rebuffed by Wackenhut to pay the $109,000 for the original Metro notification letters that went out, so the chances don't look good that Metro could get the hundreds of thousands (the Tennessean says $900,000 for covering less than 1/3 of those whose records were stolen) back it may have to spend to cover Nashvillians. We need to know from where the Dean Administration intends to take those funds, even as we rest easier in the knowledge that we won't have to look far or pay more for identity theft insurance.
UPDATE: Blogging Council Member Emily Evans seems to know from where the costs will be paid:
The cost to Metro is estimated at less than $1,000,000 and it will be paid out of an insurance fund. Presumably, Metro will attempt to recover some of this money from Wackenhut for their negligence.Well, not so fast. That opens up more questions:
- Is this insurance fund some kind of contingency fund already reserved for 07-08 or does is it something that is being formulated for the next budget?
- If the insurance fund was earmarked for something specific, then what service will be losing money?
- To what lengths is Metro going to go to recover money from Wackenhut if they refuse to pay? Legal means? And how much would a lawsuit against them cost Metro? Will the insurance fund cover all of the amount (which also could be over $1,000,000 if more people than expected sign up) needed to pay Debix in the very likely event that Wackenhut continues to deny responsibility?
- Finally, what assurances do we have from Debix that they won't treat Metro with the same negligence as Wackenhut has? Part of what got us into this problem it the lack of Metro oversight of contracts with private companies. So, who is going to exercise oversight of Debix and protect Metro consumers?
UPDATE: Emily Evans addresses my questions via e-mail:
My understanding is that this is a self insured fund. We put money in it a long time ago. The money is invested and income from investments are used to pay claims. The cost is basically being treated as a claim. So, this is not part of general fund appropriations and therefore will have no impact on services.
Metro usually prosecutes its own lawsuits. It has a raft of pretty capable lawyers thanks in large part to the guy who used to be the Law Director. So, there is little additional cost for them suing Wackenhut. In a few instances, Metro has used outside lawyers when it did not feel it had the specific expertise. I certainly have no idea what they would do here but the costs could be incorporated into what it normally takes to operate at Metro Legal.
I’ll have to check on the liability issue with Debix. I am not sure the answer.