THE DAVIS RECALL Insurance reformer vows governor will pay for OK

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Contra Costa Times (California)

SACRAMENTO — Gray Davis‘ approval of controversial auto-insurance legislation pushed hard by a major campaign contributor has ignited fierce criticism and prompted another twist in the beleaguered governor’s quest to save his job.

The weekend signing of a bill similar to one the governor vetoed last year outraged consumer advocate Harvey Rosenfield. The registered independent declared he will either run for governor in the recall, endorse a replacement candidate or campaign to boot Davis from office. He said he will make an announcement later in the week.

“We’ve got a system that’s completely corrupt from stem to stern,” Rosenfield said. “But there is only one person right now who signed that bill and that’s Gray Davis. And he’s the one who is going to have to be held accountable.”

In addition to inspiring another potential challenger, the legislation could hurt the governor’s recent efforts to recast himself as a “progressive” and bolster his reputation as a politician more obsessed with fund raising than making sound public policy.

On Monday, Davis was in Chicago seeking $10 million in campaign support from national labor leaders and meeting with former President Bill Clinton.

Rosenfield said Davis “sold out” by approving the insurance law. Rosenfield’s group, Foundation for Taxpayer and Consumer Rights, has fought the legislation for years. It allows auto insurance companies to give driver discounts for receiving continuous coverage over a certain amount of time.

Sen. Don Perata, D-Oakland, authored the bill, which was backed by Mercury Insurance, a Los Angeles company that has contributed $1.2 million to state lawmakers since 2001 and $220,000 to Davis.

News of the signing came with little fanfare in a Davis news release listing two dozen bills the governor had acted upon. The notice was sent to reporters at 6 p.m. Saturday, just hours after he ceremoniously penned his name to the state budget.

The insurance bill’s opponents, including state Insurance Commissioner John Garamendi and Consumers Union, said the measure would end up significantly raising rates for drivers obtaining auto insurance for the first time. That is the only way the companies could afford the discounts to others, they said.

The net effect, they argued, is to hit the poor with higher premiums and discourage people without auto insurance from getting it.

Rosenfield said he would challenge the new law in court as a violation of Prop. 103, an insurance reform initiative he authored and voters passed in 1988. The governor’s about-face on the legislation irked Rosenfield, who accused Davis of changing his position as a way to raise money for his anti-recall campaign.

“Davis has made a judgment call,” Rosenfield said, “that it’s worth more to him to take insurance money to fight the recall than the number of votes he’s going to lose by ignoring the will of the people.”

Russ Lopez, a spokesman for the governor, called the charge absurd. Davis backed the bill because it will increase competition and offer better rates for a majority of California drivers, he said.

“The governor vetoed the measure last year. He had just as much to lose last year when he was running for governor,” Lopez said. “It’s ludicrous for anyone to say the governor signs or does not sign legislation based on who gives him money. It does not happen.”

Davis vetoed the measure last year because he said it conflicted with the intent of Prop. 103. In a signing message Saturday, Davis said he now favors the legislation because of a state legislative counsel opinion that it furthers Prop. 103 because it “encourages a competitive marketplace and rate competition among automobile insurers.”

The governor said the bill would benefit an overwhelming number of Californians and is good for military personnel, who are exempted from lapses in coverage caused by service outside the state. Davis ordered a study of how the measure will impact rates over five years.

For Rosenfield, the case is a perfect example of “everything that is wrong with democracy in this state.”

“That’s why,” he said, “the Gray Davis recall may ultimately become a referendum on the entire political establishment.”
Political editor Daniel Borenstein and the Los Angeles Times contributed to this story. Andrew LaMar covers state government and politics. Reach him at 916-441-2101 or [email protected]

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