Monterey County Herald
SACRAMENTO (AP) – While the leading candidates for insurance commissioner say they don’t accept industry campaign contributions, campaign finance and public records show each has taken more than $50,000 from investors for insurance companies.
Influenced by Insurance Commissioner Chuck Quackenbush‘s resignation in disgrace two years ago, Democrat John Garamendi and Republican Gary Mendoza said they would not take industry money. Insurance companies had contributed heavily to Quackenbush‘s successful 1994 and 1998 campaigns, and he resigned amid allegations he waived up to $3 billion in industry fines in exchange for contributions to a nonprofit fund.
Despite their pledge, Garamendi and Mendoza each accepted $50,000 from Mercury Management Services LLC, run by financier Saul A. Fox, chief executive officer of Fox Paine and Co. The management services company and the private investment and buyout firm share a suite in Foster City.
Fox Paine says it manages more than $1.5 billion in investments for more than 50 large corporations, “including major life and property and casualty insurance and reinsurance companies” like Aetna Insurance.
MBIA Insurance Co. provided $300 million toward the firm’s investments in two energy companies, Fox Paine said. Records show MBIA spent more than $727,000 lobbying on energy issues over the last 18 months.
The matching contributions should have been a tip-off, said Douglas Heller of the Foundation for Taxpayer and Consumer Rights. “It shows that they have a keen interest not in who gets elected, but in what that person does,” Heller said.