Former head of California insurance committee takes insurance job

Published on

The San Jose Mercury News (California)

SACRAMENTO, CA — A former San Diego lawmaker who led a state Assembly committee overseeing the insurance industry has landed an executive job with one of the country’s largest insurance companies.

Seattle-based Safeco on Thursday announced it had hired Democrat Juan Vargas as its vice president of external relations, a newly created position that he began Monday. The move immediately drew criticism for the “revolving door” of termed-out legislators going to work for industries they have regulated.

Vargas, who left office last month, headed the Assembly Insurance Committee for the past four years, a post from which he advocated legislation benefiting the insurance sector, said Doug Heller, executive director of the Foundation for Taxpayer and Consumer Rights.

“While he was chairman he often sided with the industry and now we know why,” Heller said. “He saw a pot of gold at the end of the rainbow.”

In three campaigns for the Assembly and an unsuccessful run this year for Congress, Vargas received more than $354,000 in donations from various insurance companies and industry groups, including $9,700 from Safeco, according to campaign finance reports.

Safeco spokesman Paul Hollie denied the job was a political favor, saying Vargas was hired to help the nationwide company in the growing California market.

“Our company is built on a foundation of integrity,” Hollie said. “The idea we would seek to add a person that would be less than stellar goes against everything we believe in at Safeco.”

In a letter Thursday to Assembly Speaker Fabian Nunez, Heller asked for new house rules to discourage the cozy relationships lawmakers and corporate executives sometimes cultivate at the Capitol.

Specifically, Heller said members of the insurance committee should be banned from accepting campaign contributions from insurance companies. And he challenged incoming insurance committee chairman Assemblyman Joe Coto, D-San Jose, to pledge not to take a job with the industry after he leaves office.

“The revolving door between industry and government, it couldn’t get any more efficient and insidious than this,” Heller said.

Nunez spokesman Richard Stapler declined to comment on the request. He said Nunez was traveling Thursday and unavailable.

Safeco spokesman Paul Hollie declined to make Vargas available for comment and The Associated Press could not immediately locate a telephone listing for him.

A spokesman for Coto did not immediately return a phone call from the AP.

In a press release posted on its Web site, Safeco said Vargas would lead the company’s public policy strategy in California and serve as a liaison with California state officials, community leaders and other businesses and associations. Hollie declined to give Vargas’ salary.

Safeco‘s president and chief executive officer, Paula Rosput Reynolds, described Vargas in the press release as “a leader who has been instrumental in shaping public policy in California and contributing to the community for many years.”

Vargas, who was a San Diego City councilman for eight years before he was elected to the Legislature, lost a bid in the June congressional primary to unseat incumbent Rep. Bob Filner, D-San Diego.
Associated Press Writer Steve Lawrence in Sacramento contributed to this report.

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