Editorial: A Cloud Of Suspicion Hangs Over State Insurance Commissioner. Can He Clear The Air?

By The SACRAMENTO BEE Editorial Board

July 23, 2019


With the appearance of corruption threatening to undermine his legitimacy as California insurance commissioner, Ricardo Lara would do well to review the classic steps of scandal management:

Step one: Admit the error.

Step two: Come clean.

Step three: Make a plan to do better, then follow through.

Lara’s struggles began when San Diego Union-Tribune reporter Jeff McDonald found that Lara had accepted suspicious campaign donations tied to insurance industry executives. Lara took the money despite a public pledge to reject insurance industry contributions.

At first, Lara sought to downplay the issue and keep the money. Then, after McDonald’s story published, he reversed course.

Lara has made progress on step one. He admits he was wrong to accept sneaky donations from the wives of insurance company executives whose companies he regulates. Caught red-handed, he plans to return contributions totaling $54,000.

Likewise, Lara has embraced step three, saying he will avoid such donations in the future and reform his campaign structure to guard against such errors. Lara had been acting as his own campaign treasurer, an unusual arrangement that puts him at the center of his own campaign finance scandal.

Where Lara has fallen short is on step two – coming clean. He is hiding his calendars from public view. Why? For one thing, the calendars might indicate whether Lara personally met with the insurance industry executives who found creative ways to funnel money to his campaign.

A consumer advocacy group has requested full disclosure, but “Insurance Commissioner Ricardo Lara has refused the request from Consumer Watchdog, which first asked him to disclose his calendars in early June,” according to a Sacramento Bee story by Hannah Wiley.

The need for transparency has become even more urgent in the wake of the Union-Tribune’s latest revelation about Lara. The insurance commissioner “intervened in at least four proceedings involving a company with ties to insurance executives and their spouses who donated tens of thousands of dollars to his re-election campaign,” according to McDonald’s investigation.

“Lara, who was elected in November after promising not to accept campaign contributions from people he regulates, last month overruled two decisions by Department of Insurance judges and ordered the reopening of cases which involved Applied Underwriters,” wrote McDonald. “He also issued two stay orders last month in other cases that challenged the cost of workers’ compensation policies sold by Applied Underwriters and its subsidiary, California Insurance Co., according to documents.”

Lara’s actions are especially problematic because Applied Underwriters executive Stephen Acunto and his wife both wrote $15,500 checks to Lara’s campaign in April. So, California’s insurance commissioner took the unusual step of overruling his own judges in a case involving his financial supporters.

This scandal has legs, and it raises serious questions about Lara’s behavior in office. To answer those questions and restore public trust, Lara must embrace transparency and stop hiding his calendars. Resisting full disclosure will only intensify the cloud of suspicion currently hanging over his office.

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