Today, in Washington County, there are more questions than answers about the massive governmental agency Clean Water Services. The entity handles stormwater management and runoff in the Tualatin Valley and provides sanitary sewage treatment to over 600,000 customers. Almost everyone living or working in Washington County utilizes their services, both residential and business. And they have historically done great work. That said, the Executive level team, especially CEO Diane Taniguchi-Dennis, has been at the center of a growing storm regarding money, lavish meals and trips, and potential undisclosed relationships and salaries. The Oregonian and investigative journalist Jamie Goldberg have written two or three hard-hitting stories that took months of research. Some facts and even more unanswered questions have come to light in those stories.
The most revealing story can be found here:
The Hillsboro Herald wrote an opinion column, followed by this article that dealt with the CEO’s salary- one that tops by our records all State officials at any level.
Transparency Needed Immediately As Clean Water Services Reels From Scandalous Reports
The most revealing and potentially loaded aspect of the revelations is that Clean Water Services created a Captive insurance company in Hawaii. That entity is registered as Clean Water Insurance, LLC. We know that the company’s purpose is to provide insurance to the parent company, Clean Water Services, for a wide variety of needed coverages. What exactly is covered is unknown. Captive insurance companies basically create a fund of money, invest it, and provide the insured (CWS) with coverage. They can also pay for secondary insurance to ensure enough coverage for catastrophic events. Imagine how much insurance would be needed to repair earthquake-damaged sewer lines- it could be unimaginable.
That insurance company is also being examined, as is its CEO, for potentially paying significant expenses for travel, hotels, meals, and more for CWS Executives and others to travel to Hawaii for conferences. Using insurance company premium money for executive perks? The Storm grew from there.
The Herald paid for what public records we could get on Clean Water Insurance, and we received this.
So we researched that address in Oahu. We found a dozen or more insurance companies were registered at the same address. Clean Water appears to have no employees, no office space, and no physical presence. Several organizations are listed at 700 Bishop Street, Suite 1100, Honolulu, HI 96813, including:
Marsh USA, Inc.: A global leader in insurance broking and risk management. DTRIC Insurance+9ficoh.com+9Cause IQ: Intelligence on nonprofits+9
Hawaii Property Insurance Association (HPIA): Provides property insurance coverage in Hawaii. Guidestar+10hpiainfo.com+10Crum & Forster+10
Willamette Valley Insurance Corporation: Specializes in professional and general liability insurance for Salem Health Hospitals and Clinics. Cause IQ: Intelligence on nonprofits
Sutter Insurance Services Corporation: An insurance services organization. ficoh.com+1OrgCouncil+1
Empire Indemnity Insurance Company Risk Retention Group, Inc.: A captive insurance company. UHA Health – UHA Health Insurance+2ficoh.com+2ficoh.com+2
These organizations share the same suite address, indicating they may be affiliated or utilize the same management services. Looking closer at the filing, we see Scot Sterenberg listed as the registered agent. Sources suggest that he is a long-time veteran of the insurance industry and works for Marsh USA, Inc. Our sources indicate that he is the team leader at Marsh. The organizations located at 700 Bishop Street, Suite 1100, Honolulu, HI 96813, are primarily managed by Marsh Management Services Inc. This firm specializes in captive insurance management and risk services. Notable entities under their management. Clean Water Insurance appears to be one of them. But records are hard to get.
Who owns Marsh? Marsh McLennan, Marsh’s parent company, is a prominent global professional services firm specializing in risk, strategy, and people. In 2024, the company reported revenues of $24.5 billion, marking an 8% increase from the previous year, with underlying revenue growth of 7%. The firm’s operating income for the same year was $5.8 billion. Captive insurance is a big business, and many companies use this method to provide insurance to their parent companies.
Captive Insurance Companies – Risks and Benefits-
Do Captive Insurance Companies Provide Perks to Executives?
Captive insurance companies can legitimately be used by parent organizations for a wide variety of risk-management purposes, including:
Covering risks that are too expensive or unavailable on the open market.
Managing employee benefits more efficiently.
Accessing reinsurance markets.
Generating potential tax and investment advantages.
However, captive insurance structures can be abused if not properly regulated or audited. In some cases, they’ve been used to:
Create tax shelters by overpricing insurance premiums.
Provide backdoor compensation or perks to executives (e.g., luxury travel under the guise of “risk management meetings,” life insurance, or retirement plans).
Enrich insiders via loosely regulated management or service fees.
Is There Fraud in Captive Insurance Arrangements?
Yes — in some cases.
Regulators (including the IRS and state insurance departments like Hawaii’s Captive Insurance Branch) have flagged and pursued abuses, especially:
“Micro-captives” (small captives under §831(b) of the U.S. tax code) used to shift taxable income or disguise executive perks.
Shell or paper companies posing as captives but not operating as true insurance providers.
The IRS has listed certain abusive captive structures on its “Dirty Dozen” list of tax scams. These often involve inflated premiums and a lack of legitimate risk distribution.
What About Hawaii?
Hawaii is one of the top U.S. jurisdictions for captive insurance because of:
A strong legal framework.
Business-friendly regulation.
Experienced local service providers.
The Hawaii Department of Commerce and Consumer Affairs (DCCA) closely regulates captives to prevent abuse. Still, like any financial tool, they can be manipulated if oversight is weak or if the parent company is opaque.
So, captive insurance companies can be legitimate and valuable or misused for tax avoidance and executive perks. It depends on how they’re set up, managed, and monitored. Recent reports by the Oregonian have brought to light that CWS executives, and others that might include some Washington County Commissioners, may have traveled and stayed at luxury hotels in Hawaii to attend annual meetings or other events that the insurance company is putting on. That could include upgraded hotels, meals, events, and educational seminars and meetings. It’s not that unusual, but transparency seems to be lacking. Questions remain, and public information is hard to get. As of tonight, we still do not know who serves on the Clean Water Insurance, LLC Board of Directors and if they were compensated or provided with expense reimbursements. There is some reporting on this matter, but our requests for public information have gone unresponded to, even after what appears to be a reasonable time frame to do so as provided by Oregon’s public records law – ORS 192.311.
How Captive Insurance Companies Underwrite Their Own Policies
Source- Gemini deep research AI Model- Captive insurers — like Clean Water Insurance Company, LLC — are wholly owned subsidiaries of the parent company (in this case, Clean Water Services). Here’s how they underwrite their own policies:
✅ 1. Capitalization
To start operating, captives must be licensed and funded according to the rules of the jurisdiction they’re domiciled in (like Hawaii). This includes:
Initial capital requirement (e.g., $250,000 or more in cash or liquid assets).
Solvency requirements to ensure claims can be paid.
Reinsurance agreements in many cases to share larger risks.
So yes — they must have cash or liquid assets on hand, and they submit a detailed business plan to regulators before they can begin underwriting.
📝 2. Writing Policies for the Parent Company
Once licensed, the captive insurer will:
Write insurance policies for specific risks the parent company wants to insure (like general liability, environmental liability, cyber risk, or employee benefits).
Charge premiums to the parent company, which are paid into the captive.
Administer and pay out claims when risks materialize.
🔍 Example: Clean Water Services may want coverage for infrastructure failure or environmental cleanup. Instead of paying a third-party insurer, it pays premiums to its own captive — Clean Water Insurance Co.
🔁 3. Risk Management & Reserves
The captive maintains:
Reserves to cover expected losses.
Actuarial reviews to assess risk levels and ensure premiums are appropriate.
Often reinsurance arrangements to transfer high-severity risk to traditional insurers.
💸 Why Do Companies Use Captives?
Cost savings over time (especially if claims are low).
Greater control over claims handling and policy design.
Tax efficiency in some cases (though the IRS watches for abuse).
Access to reinsurance markets typically not available to regular companies.
⚠️ Risk: Do They Really Have the Money?
They should — but that’s where scrutiny comes in.
Regulators like Hawaii’s Captive Insurance Branch audit these entities.
Captives must file financial statements, including assets, liabilities, and capital levels.
If a captive underprices risk or lacks reserves, it might not be able to pay large claims — which could push the financial burden back onto the parent company or taxpayers (if it’s a public entity).
What is needed to get to the bottom of the questions over CWS and CWIC spending?
An audit by the Washington County administration seems warranted, given the nature of the questions and concerns brought to the forefront by the Oregonian and others. CE Dennis espoused transparency in a recent email to the staff, but we have not seen that. If CWS owns CWIC, then the information flow of money and a full accounting down to the penny would seem in order.
The Hillsboro Herald submitted a public information request. We know their intake system received it. We have followed up in emails and have received no responses. It has now been 10 days. We believe the answers to our questions are in the Public Benefit and would remove any questions about the CEO, spending, and use of the insurance companies’ money. After all, that money is the ratepayers’ money.
On 3-26, just after 2:00 AM, I sent this Public Information Request to Clean Water Services through their website’s Public Information Request portal.
CWS got it, and their website sent the following acknowledgment of the receipt of my request:
I waited and waited some more. No one responded, and they know the Hillsboro Herald is working on this story.
I waited 10 days—no response, acknowledgment, or nothing from Clean Water Services. So I emailed their staffer, whom CEO Taniguchi-Davis wanted all media communications to go through. No Response yet.
After hearing the testimony of 8 people who claimed to be whistleblowers, all claiming to be working at Clean Water Services or having been retired therefrom, I was overwhelmed. Every single one of them sent me information about spending. Some talked about nepotism, special favors, and lavish expenses for the CEO and others in the executive ranks. Then came the claims of the CEO overseeing the payment of costs for the County Commissioners to go to Hawaii. According to the testimony, some even travelled to Singapore, Laos, and the Far East. Claims of lavish swag bags being handed out to all involved, more 5-star meals and hotel stays.
We acknowledge that most information is being sent in via anonymous email accounts, but some have identified themselves to us. We can not confirm that any of it is true, nor are we claiming that any of it is. There is enough consistency in these reports that we must raise a hand and ask for records and disclosures. Transparency. Those are things we can do.
Between this information, which we can not substantiate, and the review of all the information provided by the Oregonian and what we believe we know, we felt strongly that an Ethics Complaint was/is warranted. We contacted the Oregon Government Ethics Commission to share the concerns we have heard. The author personally submitted a letter of concern with full disclosure that we cannot know the veracity of the testimony. A letter was issued to add to the Oregonian articles and information that have been released. A response came from the OGEC.
Here is the OGEC response- I promised to consider this for those coming forward. The concerns are not frivolous, done with malice, or definitive. We don’t know, I don’t know, nor does anyone on the outside know what is happening. However, government employees, especially CEOs and executives, must be looked into when there is as much information coming out as there has been.
Another staffer from the OGEC called to discuss this situation and stated that Ethics reports involving CEO Taniguchi-Dennis and CWS had already been received. More have likely come in. At this time, it will be about six weeks before the review panel makes a decision. What we don’t know is what we don’t know. If the ethics panel opens an investigation, we can expect the facts to come out, which we hope will serve the public’s best interests.
Washington County Commissioners Discuss CWS Litigation
The Washington County Commissioners had a Work Session on Tuesday. The last item on the agenda was Clean Water Services Potential Litigation. This meeting was an Executive Session. The Public was not welcome. Anything discussed was under wraps and will not become public. Here is the Calendar notice:
Source: https://washingtoncounty.civicweb.net/Portal/MeetingInformation.aspx?Org=Cal&Id=12926
It seems that something is happening. Someone is preparing for a legal storm. Because our County Commissioners are the Board of Clean Water Services, this is almost like an emergency Board Meeting was being held. Given the firestorm surrounding the headquarters on beautiful Jackson Bottom, the other shoe may be falling. We will monitor this situation for more disclosures and report to all of you.
Breaking News- A Meeting Has Been Called of The CWS Board-
Just as we went to press, we found a meeting has been scheduled by the County Commissioners, the Board of CWS, to approve a Resolution to review spending, set new policies, and move forward. The way this is written is that it is happening precisely because of the storm that has hit CWS and its insurance company. All of you who may have written or called your Commissioners, commented on social media on our stories or the Oregonians, and the brave staffers who have come forward can take heart. You were heard, and it appears the jig is up as they say.
Here is an excerpt:
REQUESTED ACTION:
Adopt a Resolution and Order directing Clean Water Services to audit spending, review policies,
conduct a domicile review of Clean Water Insurance Company, restrict executive management team
expenditures, and provide training.
SUMMARY:
Clean Water Services (District) is an ORS 451 county service district that provides wastewater,
stormwater, stream restoration, and related water resources management services in the Tualatin
Basin Watershed.
The District Board of Directors (Board) directs the District to address travel and meal expenditures. The
District’s Chief Executive Officer and the Board will work on a plan to restore the trust of the
community, local government partners, employees, and the Board. The Board directs the District to
take the following steps to restore accountability:
Hire an outside auditor to examine the District’s travel and meal expenditures.
Review and restrict expenditures by the District’s executive management team.
Review the domicile arrangement for Clean Water Insurance Company, the District’s captive
insurance company.
Revise the District Travel and Training Policy.
Review the District Meal and Refreshment Policy and revise it if necessary.
District also proposes training all employees in compliance with laws and policies related to spending
District resources and submitting regular financial reports to the Board.
How far back will the audit go? I hope it goes back to the creation of the Clean Water Insurance Company, LLC
More to follow- I hope many of you get to the meeting next week.
AS ALWAYS – HERE IS THE 411
| Agenda – Regular Business Tuesday, April 8, 2025, 10:00 AM Clean Water Services Board of Directors Charles D. Cameron Public Services Building Auditorium |  |
Hybrid Meeting (In-person and Virtual)
To access the meeting by phone – Please dial +1 669 900 6833 or +1 253 215 8782
To unmute to provide public comment press *6.
Webinar ID: 841 0021 4623
see the full notice here: https://washingtoncounty.civicweb.net/Portal/MeetingInformation.aspx?Org=Cal&Id=13118
WHISTLEBLOWERS WANTED
Many of you at CWS know more than anyone and have nothing to do with this. I offer you total anonymity and protection if you would like to talk, meet up, or email me anonymously. I can be reached on Facebook and Instagram at hillsboroherald@gmail.com or at my phone number, 503-799-8383. Someone needs to say something. Clearly, this is a small power group doing these things at a very good agency. Reach out, Please!
Why aren’t these people fired yet and being hauled out in handcuffs?