By Hannah Wiley, CAPITOL ALERT - SACRAMENTO BEE
September 10, 2019
California’s top regulator of insurance companies sought campaign contributions from the industry and partied with one of its lobbyists after winning his election last year, according to records and social media posts obtained by The Sacramento Bee.
Three months after taking office, Insurance Commissioner Ricardo Lara scheduled a March 12 lunch with insurance company executives with a pending matter before his department.
A memo to the commissioner said the meeting had a specific purpose: “Relationship building” for his re-election campaign.
Executives “will be joining you for a relationship-building lunch in support of your Ricardo Lara for Insurance Commissioner 2022 campaign,” fundraising consultant Dan Weitzman wrote in the memo.
Lara had pledged not to take money from the insurance industry as he ran for the post last year.
Weeks following the lunch, he broke his promise. In April, he accepted more than $50,000 in campaign donations from insurance representatives and their spouses. Some of the money came from out-of-state donors who have ties to one of the companies scheduled to be represented at the lunch.
Social media posts shared with The Bee show Lara also counts insurance lobbyists among hisfriends. The former state lawmaker partied with a Farmers Insurance lobbyist in London on New Year’s Eve just a week before his inauguration.
As insurance commissioner, Lara can set policies that determine how much money companies make and what kind of services they must deliver to Californians.
In a letterhe sent earlier this month to consumer advocate agencies, Lara apologized for accepting the campaign donations and assured stakeholders that he was taking the necessary steps to remedy his missteps.
“I believe effective public service demands constant adherence to the highest ethical standards,” Lara wrote in the letter. “But during my campaign and first six months in office, my campaign operation scheduled meetings and solicited campaign contributions that did not fall in line with commitments I made to refuse contributions from the insurance industry. I take full responsibility for that and am deeply sorry.”
Lara also said the interactions did not affect his official actions.
While Lara blamed his campaign operation, the new records indicate that in the case of the March 12 lunch he was told in writing that the meeting would benefit his re-election campaign.
Lunch with executives
Official calendars obtained by The Sacramento Bee show Lara participated in a March 12 luncheon at London-inspired restaurant Camden Spit & Larder in Sacramento with executives of companies awaiting Lara’s approval in the sale of a workers compensation agency.
The meeting was set up by Weitzman, who also serves as controller for the California Democratic Party.
Scheduled to be at the table: Steve Menzies, CEO of Applied Underwriters; Jeff Silver, Applied’s attorney; Jamie Sahara, CEO of United Insurance Company; and Eric Serna, a New Mexico attorney and the former insurance superintendent of the state who resigned amid investigations into his department’s business.
The March 12 lunch meeting came just weeks after Berkshire Hathaway announced it was selling Applied Underwritersto a then-unnamed company.
Public documents now show United Insurance Company and Menzies are acquiring separate portions of the agency— a transaction that requires review in California from Lara’s department.
Some of the campaign donations Lara accepted in April came from people with ties to Applied Underwriters. Stephen and Carole Acunto each donated the maximum allowed $15,500. Stephen Acunto had been described as a spokesperson for the company in media reports.
Theresa DeBarbrie also donated $15,500. She is the wife of Carl DeBarbrie, who served as senior vice president of Applied Underwriters from 2000 to 2008.
Silver, the general counsel for Applied, declined to comment on the meeting. Weitzman did not return The Bee’s requests for an interview.
Serna said he knows Lara through the National Association of Latino Elected and Appointed Officials and called the March 12 lunch a “social” meeting and said “no business was discussed.”
The records show he was copied on emails to department officials regarding a company under the Berkshire Hathaway umbrella.
“(Lara) is an upstanding individual and I was supporting him as a Latino elected official and will do so in the future because I believe he is a great public servant and I want to assist him in any way I can if he runs in the future,” Serna said.
The insurance commissioner had not previously disclosed his March 12 lunch, but earlier this summer acknowledged aMay 6 meetingwith Menzies. The records show Sahara had requested the appointment.
The commissioner defended his May 6 meeting in aninterview with KQEDand said his decision to intervene in a case that involved complaints against Applied Underwriters for its workers compensation policies was done to prevent the system from failing.
Party in London
Beyond the campaign fundraising meetings while in office, Lara also is friends with one insurance lobbyist in Sacramento. Social media posts show Lara joined Farmers lobbyist Victoria Stewart and other friends for a New Year’s Eve party in London.
Lara posted a photo on Facebook at Aqua Shard, an upscale, high-rise restaurant and bar that charged guests hundreds of dollars to attend an all-night party with a bird’s eye view of the city’s skyline.
Stewart also posted a photo on Facebook of herself at the same event.
A lobbyist who works in Sacramento provided The Bee with the photos, including one of Lara with Adama Iwu, a former Visa lobbyist and co-founder of We Said Enough. Iwu spearheaded the advocacy initiative to end sexual harassment in California’s capital following her own experiences as a Sacramento lobbyist.
“Because friends who NYE together ... thrive together!” Lara wrote.
The event cost guests up to $550 for a five-course meal, drinks, DJ entertainment until 3:30 a.m. and a “glass of Veuve Clicquot Champagne on arrival,” according to Aqua Shard party advertisements.
“One of the thousands of people he meets with every year, then-Sen. Lara posted a photo of himself with Adama Iwu, who had just been featured on the Cover of Time magazine as 2017 Person of the Year for her involvement in the ‘Me Too movement,’ ” said Robin Swanson, spokeswoman for Lara’s campaign.
Iwu declined to comment about the event.
Farmers Insurance spokesman Luis Sahagun said the New Year’s Eve party was attended by a “group of longtime friends” and that the company did not pay for or reimburse any of the expenses.
“Among the attendees of this open-to-the-public event was a current Farmers employee who has been friends with the insurance commissioner for more than seven years, long preceding his current role,” Sahagun said. “Her participation was completely self-initiated and self-funded, using her own resources. It’s important to add she did not fund any portion, in whole or in part, the expenses of any of the other attendees.”
It’s unclear who paid for Lara’s ticket to the party. Financial records show that Lara did not file the New Year’s party on a statement of economic interest, which public officials and candidates are required to report to the Fair Political Practices Commission when they receive gifts.
The commission caps gifts from lobbyists and lobbying firms at $10 per month, according to its website.
Neither Swanson nor insurance department spokesman Michael Soller responded to questions about whether Lara paid his own expenses or was a guest of someone else on New Year’s Eve.
“The question is who put on the party? Who paid for the party?” said Bob Stern, former president of the Center for Government Studies. “If it’s a party and he runs into insurance people, that happens. (But) it’s in England. It’s kind of far away.”
Swanson said Lara terminated Weitzman on July 28 and is taking “proactive steps to fix the problems,” which includes a “moratorium on all re-election fundraising for the remainder of this year until strict vetting protocols are put in place to prevent any such lapses from occurring again.”
Lara was serving as his own re-election campaign treasurer, a role he has since stepped down from and hired Denise Lewis of River City Business Services to fill, Swanson said. Treasurers are tasked with managing accounts, tracking donations and weighing political consequences of accepting money from certain donors.
“Insurance Commissioner Lara has acknowledged that mistakes were made, and has apologized and taken full responsibility for them,” Swanson said. “Though he didn’t break any rules or laws, he acknowledges he did not live up to the standards he set for himself.”
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.