By Hannah Wiley, SACRAMENTO BEE
July 29, 2019
https://www.sacbee.com/news/politics-government/capitol-alert/article233172776.html
California Insurance Commissioner Ricardo Lara, under fire for accepting campaign contributions from insurance executives and their spouses, has yet to release his office calendars in response to public requests.
But Lara acknowledged last week that he did meet with a CEO whose company has multiple complaints against it in cases before his department.
Lara said he met with CEO Steven M. Menzies, who heads Applied Underwriters, a workers’ compensation agency that the department formerly settled with for “bait and switch” marketing tactics in 2017. Berkshire Hathaway is in the process of selling the company, a sale Lara must approve.
Lara called the May 6 meeting with Menzies “casual” in a July 25 interview with KQED. But he also said he agreed to a meeting after the executive reached out “to see if staff could meet with him to review the cases before him.”
“I meet with CEOs all the time with insurance companies. In the six months that I’ve been in office, I’ve met with CEOs, I’ve met with consumer advocates, I’ve met with fire victims,” Lara said in the interview. “If you’re asking me if I met with the CEO of Applied Underwriters, I did. I met with him. It was a casual meeting and nothing in that meeting that came out changed the course of my decision.”
His department said the meeting occurred on May 6. Lara, who was serving as his own campaign treasurer, accepted $46,500 in contributions to his 2022 reelection campaign in April from out-of-state executives with ties to the company.
During his campaign for the post, Lara had pledged not to take political money from insurers.
Lara and department officials intervened in multiple cases involving Applied Underwriters in recent weeks. The actions included overruling judicial decisions and ordering cases to be reopened, as well as issuing stay orders. The department sent the cases to the courts for a final determination.
On KQED, the Democratic commissioner said his decision to intervene in one case, involving complaints against Applied Underwriters for its workers compensation insurance policies, was done to uphold department precedent. He said the department’s goal was to prevent the workers compensation system from failing.
“I did reverse the ruling from the law judge because I wanted it to be consistent with what we’ve done with my previous predecessor’s rulings,” Lara said. “Which really got to the point of protecting consumers from, injured workers really, from losing their coverage and from businesses being on the hook for major financial losses.”
The department later said Lara wasn’t directly involved in the case. On July 10, he signed a letter recusing himself from Applied Underwriter cases.
The meeting and decisions refreshed concerns from the advocacy nonprofit Consumer Watchdog, which has pressed Lara’s office to release calendar records of meetings with executives who donated the money in question.
President Jamie Court said the meeting with Menzies raises questions of potential ex parte communication violations because of Lara’s quasi-judicial role as commissioner.
“This appears to be, based on his comments, a violation of the ex parte rules because he had a conversation with the party in a pending matter,” Court said. “He shouldn’t be having that conversation when a pending action was before his department, without notifying the other side and all parties involved. It’s like a judge having a conversation with only the defendant and not telling the plaintiff.”
Ex parte communications are illegal under California law, but Department spokesman Michael Soller said Lara did not violate ex parte regulations because the conversation was “not about a specific case.”
“It is critical to his job to have an open door to talk with insurers. The conversation the commissioner described to KQED was general, and he referred the company to staff to discuss any specific issues,” Soller wrote.
Lara also reiterated in his recent interview that he took “immediate action” to return the money and said he plans to stop serving as his own campaign treasurer. He said he also plans to release his calendars.
“My pledge was to not take money from insurers, so when I found out, I immediately returned the money,” Lara said. “I put a third party person to make sure we review all checks that come in and I also recused myself from having any decisions regarding this insurance company.”
Lara has not said whether he personally knows the donors who contributed the total $54,000.
Stephen and Carole Acunto each donated $15,500 to Lara. Mr. Acunto has spoken on behalf of Applied Underwriters in the past, but did not respond to requests for comment.
Theresa DeBarbrie also donated $15,500, and is the wife of another company executive with ties to Applied Underwriters. Nearly $8,000 came from Darlene Graber, whose husband is also in the insurance industry.
Jessica Levinson, a professor at Loyola Law School in Los Angeles, said because Lara’s role “stands somewhere in the middle” between a lawmaker and a judicial official, the meetings and decisions raise “serious red flags.”
“It is important that he meets with all types of stakeholders. It is important that he meets with all types of people and groups who are affected by his decisions,” Levinson said. “But imagine a judge was meeting with a litigant whose case he just overturned and ordered reopened. We would all feel deeply uncomfortable with that.”
Hannah Wiley joined The Bee as a legislative reporter in 2019. She produces the morning newsletter for Capitol Alert and previously reported on immigration, education and criminal justice. She’s a Chicago-area native and a graduate of Saint Louis University and Northwestern.
