Consumer Watchdog: California Commissioner’s Calendar Suggests He Made Contact in ‘Pay to Play’


September 19, 2019

Calendar entries and documents show that California Insurance Commissioner Ricardo Lara, not his fundraiser, made first contact with an agent of a workers’ compensation insurance company offering political support in conjunction with seeking approval for a change of control in the company, according to Consumer Watchdog.

The Santa Monica, Calif., based group requested Lara’s calendar and other documents after it was discovered he took campaign contributions from the insurance industry despite his pledge not to do so.

Lara has since apologized for accepting those contributions. He said he terminated his contractual relationship with the fundraising personnel involved, and that even though no laws or rules were broken, “I must hold myself to a higher standard.”

The calendar and information, which were requested under the Public Records Act, appear incomplete and suggest Lara is not being fully forthcoming about his meetings, according to Consumer Watchdog.

“For example, the only email produced from Lara himself is one sent to Consumer Watchdog’s president,” a release from Consumer Watchdog states. “Lara did not produce his texts, but a phone record from a Department official includes Lara’s response approving a key meeting with principals in the scandal. Consumer Watchdog asked the Department to provide a privilege log of all the calendar entries and documents withheld to assess a potential Public Records Act challenge.”

Spokespersons for the California Department of Insurance contacted for comment provided the following statement:

“The insinuations in Consumer Watchdog’s latest press release cannot hide the fact that the Department of Insurance has released the Commissioner’s calendar and public records that clearly show all these meetings and their purpose.”

A San Diego Union Tribune article out on Thursday reports that Eric Serna, a New Mexico lobbyist who more than a decade ago retired while under investigation as that state’s most senior insurance regulator, was also in meetings with Lara and insurance executives.

One of those meetings included the proposed buyer and seller of Applied Underwriters.

The pending sale of Applied, a workers’ compensation insurer owned by Berkshire Hathaway that has been the subject of dozens of complaints to the CDI, requires the approval of the California insurance commissioner.

Lara has received $54,300 in campaign donations for his 2022 reelection campaign from people linked to two insurance companies, Applied Underwriters and Independence Holding Co.

A Sacramento Bee story out on Thursday details meetings Lara had with Steve Menzies, the CEO of Applied Underwriters.

Menzies is named in a writ of administrative mandamus filed last month in San Francisco Superior Court by Oceanside Laundry LLC and RDR Builders Inc. seeking judicial review of the Lara’s actions in two cases in which the companies claim he violated their rights.

The writ is part of an effort to overturn decisions by Lara in cases involving Applied Underwriters, alleging the decisions by Lara were swayed by contributions to his campaign from people affiliated with Applied.

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