The self-made businessman who hired Laurie Coleman has quietly supported Sen. Norm Coleman's political career. A lawsuit has spotlighted all three.
Jim Hays is the sort of businessman who knows a lot of people. He plays golf with them. He travels widely for business and pleasure. He contributes money to charities. He boosts political careers.
His networking is one reason he has grown wealthy in the highly competitive commercial insurance world. It's no surprise that Hays' circle includes Sen. Norm Coleman and his wife, Laurie.
The co-founder and chief executive of Hays Companies, a national insurance broker based in Minneapolis, has made more political contributions to Coleman's political committees than to any other candidate's -- nearly $20,000 since 1998.
Yet his support of the Colemans drew little attention, even after he hired Laurie Coleman in 2006. At age 50, she had made a career change from actress and model to insurance agent.
But right before this year's U.S. Senate election, Hays' relatively quiet relationship with the Colemans came under an uncomfortable spotlight.
Two lawsuits filed in a Texas dispute involving the company Deep Marine Technology Inc. alleged that another businessman and supporter of Norm Coleman's sought to maneuver $75,000 to the senator through his wife's new employer. Neither the Colemans nor Hays are parties to the lawsuits, but they are mentioned in them. Hays has said the allegation that his company served as a money conduit to the Colemans is untrue. The FBI has begun an investigation of allegations in the lawsuits, sources familiar with the probe said last week.
Laurie Coleman's role in Hays Companies remains a bit of a question mark. Unlike many of Hays' employees, she is an independent contractor who doesn't maintain an office at Hays' headquarters in the IDS Center. Though she was licensed as an agent in 2006, Coleman can't legally write insurance policies because she has no association or "appointment" with an insurer, according to the Minnesota Commerce Department. She still can work in insurance, but an authorized broker would have to seal the deal if she brought in customers.
Hays Companies has said Laurie Coleman receives no compensation under its contract with Deep Marine for risk management consulting. Both lawsuits in the Texas dispute say that three quarterly payments of $25,000 each were made by Deep Marine to Hays Companies in 2007. Hays Companies doesn't dispute the payments, but insists they didn't go to the Colemans.
Laurie Coleman does get a salary from Hays Companies, according to her husband's Senate financial disclosure report. Senate rules do not require the salary amount to be revealed. The disclosure report also says she co-owns a company in Los Angeles that sells a hands-free stand for hair dryers called the "Blo & Go." Dun & Bradstreet estimated its annual sales at $73,000.
"This is just all insane," Laurie Coleman said when a reporter called recently. The Colemans declined to be interviewed. So did Hays, opting to issue written statements.
A self-made man
Insurance has been good to Hays.
He grew up in north Minneapolis and attended the University of Minnesota, earning an MBA in 1980. By the early 1990s, he led the Minneapolis office of insurance industry giant Aon Corp.
In 1994, Hays and five others started Hays Companies. They built it into the largest Minnesota-based insurance broker, with 500 employees, offices in 16 states and 2007 revenue of about $95 million, according to Minnesota Insurance Magazine.
Terry Larkin, an insurance competitor, said Hays is well-suited to a field where one broker's gain is another's loss. "In a sharp-elbowed business, Jimmy has some of the sharpest elbows,'' said Larkin, an industry consultant with 35 years of sales experience.
Investor Kevin Roberg said that his business relationship with Hays grew into friendship and that Hays has contributed generously to a golf tournament Roberg started to support Children's Hospitals and Clinics of Minnesota. "He's a very hard charger,'' Roberg said.
Hays, 51, owns a $1.8 million home in Medina, a $3.7 million Miami Beach condo -- his legal residence -- and co-owns with a business partner a $2 million condo in the ski and golf resort of Vail, Colo., according to assessment records. Hays also has a residence in London, according to Roberg.
Married with three adult children, Hays said in a statement that "I enjoy golfing, traveling and spending time with my family, including my two grandchildren. But even when I'm relaxing, I'm often networking with an eye towards business development."
Golf clubs and lawsuits
On the greens, Hays sometimes is anything but relaxed.
According to testimony in a civil lawsuit, he has repeatedly broken or thrown golf clubs and whacked golf balls off the course in frustration over missed shots.
In July 2003, an irritated Hays abruptly hit the ball off the green at Spring Hill Golf Club in Wayzata, striking a nearby caddie in the ankle. The injury required arthroscopy and other treatment costing $31,000, according to a lawsuit the caddie filed against Hays. The case ended in a confidential settlement.
Another caddie testified that at Spring Hill Hays broke top-of-the-line golf clubs against trees, on a cart path and over his foot. He said Hays once left a putter lodged in a tree. Hays admitted in a deposition to breaking 10 clubs at Wayzata Country Club.
He expressed regret over the caddie's injury. "It was an accident and I'm sorry," he testified last year.
Hays Companies has twice run afoul of officials in other states. The company was fined $500 by the Nevada Department of Insurance in 1998 for selling insurance there without a license. Last year, the Massachusetts attorney general accused Hays Companies of excessive perks and deceptive business practices. Hays Companies settled that case by repaying $726,952 to two former clients and paying $200,000 in a state penalty. In court papers, Hays Companies said it was a victim of its own employees.
Hays has a long history of contributing to Republicans.
He gave $1,000 to Norm Coleman's unsuccessful campaign for governor in 1998. More money flowed into Coleman's later Senate races and his separate political committees. In the past decade, Hays and his employees have made $136,000 in political contributions, mostly to Republicans or party committees. Hays' share was $59,000, a third of it to help Coleman.
Hays also contributed $3,850 to former state Attorney General Mike Hatch, a DFLer, some of it as he and other attorneys general were investigating many insurance brokers over fee disclosure. Hatch didn't investigate Hays, but said in an interview that was not because of the contribution.
His political contributions, Hays said in his statement, are "based on what I personally think of the qualities and leadership of the individual, not what party affiliation the candidate has."
Those political connections began to attract more scrutiny after the two lawsuits were filed in Texas and Delaware in late October by the founder and minority shareholders of Deep Marine, an underwater services company.
The suits allege that Minnesota businessman Nasser Kazeminy took control of Deep Marine and wasted its money, in part by making payments to Hays Companies without receiving insurance services. The suits allege Kazeminy, a longtime Coleman supporter, told Deep Marine officials the payments to Hays were intended to help the senator financially. Kazeminy, Hays and the Colemans have denied the allegations.
No trial dates have been set for the two lawsuits. The cases are likely to linger long after Minnesota officials finish their recount in the election between Coleman and DFL challenger Al Franken.
As for Hays, he adds in his statement: "Hays Companies is not a party in this lawsuit. Yet we find ourselves involved in a story based on a misinformed Texas lawsuit containing allegations directed toward Hays Companies that are erroneous."