By Timothy Darragh, BEST WIRE
May 31, 2022
SACRAMENTO, CA -- A California commission on campaigns and finance has opened a money laundering investigation into the campaign of Insurance Commissioner Ricardo Lara, days before his fight to retain his office in the Democratic primary race.
The state Fair Political Practices Commission said in a letter to the head of Consumer Watchdog it would undertake an investigation of Lara, his campaign and LGBTQ political organizations that allegedly laundered insurance industry campaign funds to his campaign fund.
Angela Brereton, chief of the FPPC's Enforcement Division, said the commission would investigate allegations raised by Consumer Watchdog. Investigations often are not publicly announced, but Brereton said the FPPC was confirming the investigation because the complaint was publicly distributed.
In it, Consumer Watchdog Executive Director Carmen Balber said Lara's campaign allegedly received contributions from the insurance industry that violated state prohibitions against money laundering and disclosure of earmarked contributions.
Lara and his coordinated Independent Expenditure committees "are violating one of the most serious provisions of the Political Reform Act by laundering campaign funds without disclosing the true source of the contributors," Balber said.
Public campaign records show "a clear pattern of virtually identical amounts of money coming in to the (LGBTQ) Caucus from the insurance industry, and then going out to two IE Committees that purchased communications in support of Lara's campaign," the Consumer Watchdog complaint said. "Specifically, insurance companies gave $122,500 in contributions to the LGBTQ Caucus committee between June 2021 and April 2022. The LGBTQ Caucus committee then gave $75,000 to the campaign committee Equality California in April 2022. Shortly after that, on May 6, 2022, the LGBTQ Caucus committee and Equality CA gave the Independent Expenditure Committee Californians Supporting Ricardo Lara for Insurance Commissioner a combined $125,000 directly ($50,000 from LGBTQ Caucus committee and $75,000 from Equality CA)."
Lara's campaign then spent the funding on polling and campaign communications, it said.
The caucus received $15,000 each from the American Property Casualty Insurance Association, Anthem Blue Cross, Blue Shield of California, UnitedHealth Group and Health Net Companies; $17,500 from Farmers Group, Inc., and $30,000 from Geico, according to records provided by Balber.
The complaint said the movement of funds from the insurance industry through the LGBTQ Caucus committee in virtually identical dollar amounts and in short periods of time raise the specter of coordination between the industry and Lara's campaign.
"The fact that Equality CA and the LGBTQ Caucus committee moved the exact amount of the insurance industry contributions to the Lara IE committee on the exact same day cannot be a coincidence," it said.
Further, Lara had been vice chair of the caucus and is still an ex-officio member, it said.
For a period of time, the insurance industry had not been a significant donor to the caucus, contributing $2,000 between 2011-2016, it said. Once Lara, who is gay, began running, insurance contributions ramped up $27,500 in 2017-18, $107,500 in 2019-20, and $122,500 in 2021-22, it said.
Attempts to obtain comment from the Lara campaign, Equality CA and the caucus were not immediately successful. A California Department of Insurance spokesman said he could not comment on matters related to the campaign.
Lara is facing physician Eugene Allen, paralegal Jasper "Jay" Jackson and Assemblyman Marc Levine in the June 7 Democratic primary race for the insurance commissioner nomination.
Allegations Lara has taken campaign money from the industry his office regulates have dogged him since he first was elected commissioner four years ago. In 2019, Lara suspended campaign operations months after being sworn-in after new media reports showed he was soliciting insurance donations after pledging not to take them (BestWire, Sept. 4, 2019).
(By Timothy Darragh, associate editor, BestWeek: [email protected])