SACRAMENTO — Gov. Arnold Schwarzenegger will temporarily stop accepting campaign money from insurance companies with a stake in California’s workers’ compensation industry, his fund-raising adviser said Thursday.
The decision comes in the midst of contentious negotiations involving Schwarzenegger, lawmakers, insurers, employers, doctors, labor unions and lawyers, about how to stem spiraling costs in an $18 billion-a-year industry that provides benefits and treatments to people injured on the job.
It also follows months of free flowing contributions from insurers to Schwarzenegger’s California Recovery Team, a committee that raises money for the GOP governor’s political pet projects — including a plan to retool workers’ compensation laws.
The recovery team since last December has accepted at least $900,000 from insurers, according to campaign finance records.
Donors include several of the larger workers’ compensation players in the state, such as Zenith, Zurich, Travelers and the St. Paul companies.
They take in combined annual premiums worth more than half a billion dollars, according to California Department of Insurance records.
While urging lawmakers to send him a package of reforms he can support, Schwarzenegger in recent weeks has also been out promoting a backup plan that would be placed directly before voters.
Supported by insurers, the ballot plan aims to cut costs by limiting treatments but does not attempt to regulate insurance rates.
Advocates say the market will regulate itself; opponents say there is no guarantee rates would go down, even as injured workers’ access to care would be limited.
The governor’s California Recovery Team recently donated $1 million to an effort to collect enough voter signatures to qualify the initiative for the November ballot.
Schwarzenegger fund-raising adviser Marty Wilson said Thursday, that the committee will keep all insurance money it collected through the March 2 primary election.
He said that’s because the committee’s focus up until then was a multimillion-dollar ad campaign promoting a $15 billion bond initiative to finance state government overspending and a companion balanced-budget measure.
“The clear priority for the first two and a half months of the year had been funding Propositions 57 and 58,” Wilson said.
“Because our focus has shifted now to the [workers’ compensation] qualification effort and the governor is involved in negotiations with legislative leaders to forge a compromise, the decision was made that it would be best from an appearance point of view that the recovery team not accept contributions from carriers involved in the California comp market.”
To that end, Wilson said, the committee is refunding a $50,000 contribution received after the election from one workers’ compensation carrier.
Schwarzenegger’s acceptance of donations from insurers while promoting a plan they support has rankled campaign finance watchdogs as well as interest groups that stand to lose from the ballot plan Schwarzenegger supports. Although he has only begun promoting a ballot initiative, retooling the workers’ compensation system was a pledge he made last year during his campaign for office.
Doug Heller of the Santa Monica-based Foundation for Taxpayer and Consumer Rights said Schwarzenegger’s hiatus from accepting workers’ compensation insurance contributions only pays lip service to his campaign pledge that he would be different from other politicians and not beholden to special-interest groups.
“It doesn’t matter if he claims to use the actual dollar bills for one campaign or the next,” Heller said. “He got money from insurance companies and is promoting their special interest.
“It’s the special interest money that gives him the financial wherewithal to flex his muscle in the Legislature,” Heller added.
“The politicians that are sort of cowering each time Arnold says, If you don’t do what I want, I’ll go to the ballot box,’ they’re concerned because of how much money he’s raised, not just because he’s Arnold.”