California Senate Committees Pass Good Government Bills To Close Agency Lobbying Loophole and Bar Destruction of Records

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Los Angeles, CA – Today, the California State Senate Judiciary Committee passed a bill 11-0 that would require agencies to retain all public records for a minimum of two years. Yesterday, the Senate Elections Committee voted 4-0 to close a loophole in state law that allowed former Assembly Speaker Fabian Nunez to influence decision-making at the Department of Insurance without registering as a lobbyist. 
AB 1783 (Levine), addressing lobbying of state agencies, and AB 2370 (Levine), requiring retention of public records, both arise from the government corruption scandal involving the Department of Insurance and the workers’ compensation insurer Applied Underwriters.
The Sacramento Bee recently reported on the issue of so-called “consultants” influencing administrative actions of state agencies while avoiding public reporting requirements of the landmark Political Reform Act.
Two former lawmakers—Fabian Nunez and former Assembly Member Rusty Areias—were hired by Applied Underwriters to influence Insurance Commissioner Ricardo Lara’s approval of the sale of the company.
At stake were potentially hundreds of millions of dollars in overcharges to small businesses and workers. The “consultants” were to be paid a $2 million contingency fee contract. 
AB 1783 closes a loophole by including under the definition of “lobbying” any efforts to influence the Department of Insurance or Department of Managed Health Care’s approval of insurance company mergers. The bill would apply existing public reporting requirements and a ban on contingency fee bounties.
AB 2370, passed today, would require all state agencies to retain public records for a minimum of two years.
California’s landmark Public Records Act reflects the principle that government transparency is essential in a democracy. Yet, there is no minimum retention period for such records that applies to state agencies. As a result, records may be deleted or destroyed before the public or journalists are able to access them.
AB 2370 would simply apply to state agencies the same minimum two-year retention period for public records that is already in place for California counties and cities.
Destruction of public records hamstrings government agencies’ ability to conduct enforcement actions and is contrary to the basic tenets of transparency.
Underscoring the bill’s importance, just this year the Department of Insurance adopted a record deletion policy that would have automatically deleted agency email after 180 days unless individual staff manually archived each email.
The email deletion policy, which was pulled back in the wake of media attention, was developed following statewide news coverage of the pay-to-play scandal involving Applied Underwriters and cloaked campaign donations to Insurance Commissioner Lara’s 2022 re-election campaign.
Failure to retain public records is a problem that reaches beyond the Department of Insurance. For example:

  • As recently reported, the chief administrative officer of a state agency testified that she routinely shredded scoring worksheets that she no longer considered “relevant,” even though they were central to a contract bidding dispute. 
  • CalPERS began automatically deleting email older that 60 days in 2011 after a different government scandal.
  • In 2016, CalTRANS’s 120-day auto-delete email policy was determined to constitute spoilation of evidence. 
  • The California Environmental Protection Agency currently considers emails transmitting “informal information” to be “transitory,” and they are deleted after 90 days. 
  • The Medical Board destroys “physician licensing files . . . . not necessary to establish qualifications for licensure” upon the time the physician’s license is issued. 
  • The DMV destroys records regarding a driver’s failure to establish insurance coverage following an accident after just 30 days. 
  • The Department of Forestry destroys records regarding hazardous material (hazmat) property upon expiration of the relevant contract, regardless of the time period, and destroys records of fire safety inspections after one year. 

The bills were unanimously approved by the State Assembly and will now proceed to the Senate Appropriations Committee.
AB 2370 is supported by California News Publishers Association, Californians Aware, Consumer Watchdog, First Amendment Coalition, and Oakland Privacy.
AB 1783 is supported by California Clean Money Campaign, the Fair Political Practices Commission, California Common Cause, Consumer Federation of California, and Consumer Watchdog.

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Jerry Flanagan
Jerry Flanagan
Jerry Flanagan is Consumer Watchdog's Litigation Director. Flanagan leads Consumer Watchdog’s litigation efforts in the areas of health insurance coverage and access to treatments. He has over 20 years experience working in public interest and health care policy, legislation and litigation.

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