The Associated Press

Assemblyman Tom Calderon says he will be a consumer advocate if elected insurance commissioner, but that hasn’t stopped the insurance industry from giving him $800,000 in campaign contributions.

“It’s become pretty clear that Calderon is the insurance industry’s candidate,” says Harvey Rosenfield, chief author of the 1988 initiative that made the office an elective post and gave the commissioner broad powers over insurance rates.

Calderon disagrees, saying he’s getting support from insurance agents because he will be consumer oriented and from insurance companies because he’ll bring a “stable environment” to a troubled office.

“I’m not afraid to tell the industry when they are all wet,” he says.
But his heavy backing from the industry could be more of a liability than an asset next year in the first election since former Insurance Commissioner Chuck Quackenbush resigned under threat of impeachment.

Quackenbush collected more than $8 million in campaign donations from the industry before he was forced from office last year by accusations that he allowed six insurance companies to avoid up to $3.7 billion in fines by contributing about $19 million to foundations he set up.

The foundations then spent part of that money in ways that could have helped Quackenbush‘s political career.

Quackenbush‘s problems triggered efforts in the Legislature to clamp a $250 limit on donations to the commissioner from insurers with cases before that office. The bill died in the Assembly although Calderon voted for it.

Calderon, a Montebello Democrat who chairs the Assembly Insurance Committee and was one of the lawmakers who investigated Quackenbush, has taken in at least $800,000 from insurers and agents, 44 percent of the money he has raised since the start of 2000.

In contrast, Calderon’s two biggest opponents for the Democratic nomination, former Insurance Commissioner and state Sen. John Garamendi and former Assemblyman Tom Umberg, say they won’t take insurance money, although both accepted insurance contributions when they were in the Legislature.

Garamendi, who served as commissioner from 1991 to 1995, says the office has too much power over the industry to take its money.

“You’re legislator, judge, jury and police force,” he said. “It’s a conflict that cannot be overcome. Chuck Quackenbush and other elected commissioners around the nation have proved it time after time.”

Garamendi said he briefly received one or two insurance industry donations after an unsuccessful run for governor in 1994, but returned the money. He blames an overly enthusiastic staff for soliciting the contributions.

The $294,000 he’d raised for his campaign through the end of September included almost $9,000 from companies that are licensed by the Insurance Department and represent consumers who are attempting to recover insurance benefits. The department doesn’t regulate their fees, however.

“They represent the consumers side of this question, which is where I am coming from,” Garamendi says.

Umberg has raised at least $1.67 million, including a $1 million loan from a land development company, La Jolla Playa Vista Partners.

Calderon’s industry donors include Mercury General Corp., one of the nation’s biggest auto insurers, which has given the assemblyman $124,000 since the start of 2000.

He’s also received $80,000 during that same period from the Association of California Insurance Companies, $55,500 from the American Insurance Association, $48,000 from the Farmers Employees and Agents Political Action Committee and $45,000 from Allstate Insurance.

Jeffrey Fuller, the ACIC‘s acting president, said Calderon’s “track record is that he is fairly middle of the road. He’s not a Democrat who automatically takes the consumers’ stance in a them-and-us posture against the insurance industry…. We’re just figuring that we’re going to be treated fairly.”

The Better Business Alliance, a coalition of consumer activists, environmentalists, labor unions, senior citizens and workers compensation attorneys, gave Calderon a B grade this year for votes on 15 key bills.

Sara Nichols, a spokeswoman for one alliance member, the California Nurses Association, says that grade means a lawmaker is “generally doing pretty well for consumers, labor and the environment, but there’s room for improvement.”

Jamie Court, executive director of another coalition member, the Foundation for Taxpayer and Consumer Rights, said Calderon has worked behind the scenes to weaken consumer protection bills, including measures to protect homeowners and HMO patients.

“He’s positioned himself as a bill broker for industries that may not want to swallow strong medicine but know they can’t avoid some Rx altogether,” Court said.

Rosenfield suggests that insurers are giving heavily to Calderon because they doubt that a Republican can win the office next year.

Altogether, fourteen candidates have filed initial papers to run for the office, but only Calderon, Umberg and Garamendi have reported raising significant amounts of campaign money.

Calderon says he does try to “find a middle ground,” but has been very tough on the insurance industry at times, mentioning his bill to bar auto insurers from using customers’ credit ratings to determine how much they charge.

The bill passed the Assembly in May but never came up for a vote in the Senate, Calderon said, because Commissioner Harry Low, appointed by the governor to fill out the rest of Quackenbush‘s term, said he thought he had the authority already to carry out the bill’s provisions.

Calderon says if elected he’ll beef up the Insurance Department’s staffs that handle consumer complaints and investigate insurance fraud.

He also says he can “build a firewall between (campaign) contributions and building policy.”

“I have to get support where I can get it, but I’ve been very clear where I stand on issues,” he said. “I’ve told the industry that when you’re wrong I’ll come down on you like a ton of bricks. I’m not going to let you cheat consumers.”

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FTCR note: The Foundation for Taxpayer and Consumer Rights does not take any position on candidates for any elected office and does not promote or oppose the election of any candidate for California Insurance Commissioner.