Critics urge Davis to return check

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Company Backing Bill Sends Donation

San Jose Mercury News

SACRAMENTO – Consumer activists called Tuesday for Gov. Gray Davis to return what they denounced as a “shameless” $25,000 contribution from Mercury Insurance, made as the company is lobbying the governor to sign a measure that would help the firm’s business.

Mercury is urging Davis to sign a controversial bill pushed through the Legislature last month that would strike down proposed regulations meant to prevent companies from offering discounts to drivers who have had no gaps in their auto insurance coverage.

Consumer groups and Insurance Commissioner Harry Low are urging Davis to reject the bill because it would lead to higher premiums — or no coverage at all — for drivers who have had lapses in their insurance.

On Tuesday, Harvey Rosenfield, author of California’s landmark 1988 auto insurance reform bill, denounced Mercury Insurance and its parent company for the $25,000 donation, which was made and reported to the Secretary of State’s Office last week.

“This is a check that will live in infamy,” Rosenfield said. “If Davis signs this bill, he is going to be associated with traitors who are out to subvert democracy and the will of the people.”

Rosenfield argued that the bill would unfairly penalize members of the military who have dropped their auto coverage while they are fighting the war against terrorism overseas. Rosenfield plans to send Davis a letter today asking him to return the donation and reject the measure.

Neither Mercury Insurance executives nor their lobbyist could be reached late Tuesday for comment.

But spokesmen for Davis dismissed Rosenfield’s call for the Democratic governor to return the money.

“We don’t need Mr. Rosenfield to make those judgments for us,” said Davis campaign spokesman Roger Salazar. “The governor only considers bills on their merits and nothing else.”

In a related matter, Democratic Attorney General Bill Lockyer said Tuesday that he sees little evidence in a series of newspaper reports about the governor’s fundraising to suggest that Davis has broken the law.

Lockyer’s comments came in a letter to state Sen. Dick Ackerman, the Tustin Republican challenging Lockyer for re-election who has urged the attorney general to investigate the governor’s aggressive fundraising operation.

“On their face, none of the incidents summarized in your campaign press releases indicate the presence of any express quid pro quo connecting campaign contributions and an official action by Gov. Davis,” Lockyer wrote.

The insurance dispute was sparked by the proposed state Insurance Department regulations that would prevent insurance companies from offering discounts to drivers who have had long-term coverage.

In an effort to prevent the proposal from taking effect, Mercury Insurance lobbyists worked with Assemblyman Ed Chavez, D-City of Industry, to protect their ability to reward those drivers with continuous coverage.

The bill was defeated in a Senate policy committee but was resurrected in the final days of the Legislative session by Sen. Don Perata, an Oakland Democrat who received $25,000 from Mercury right before a key policy hearing.

In the end, SB 689 was rushed through the Legislature and sent last month to Davis, who has 13 days to act on the measure.


Contact Dion Nissenbaum at [email protected] or (916) 441-4603.

Consumer Watchdog
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