Insurers Contribute To PAC Favoring GOP Candidate

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Seven of the state’s leading insurance companies have contributed more than $3.6 million over the past month to a political action committee that in turn has spent nearly $3 million on advertising promoting Republican Mike Villines and attacking Democrat Dave Jones in the race for insurance commissioner.

Consumer advocates said the evidence points to a coordinated effort on the part of insurance companies to influence the decision over who will be their regulator for the next four years.

“The insurance industry is trying to ensure they have a commissioner with whom they have $3 million worth of leverage,” said Doug Heller, executive director of Consumer Watchdog. “A regulated entity spends money in a race because they want a regulator who will be easy on them. This isn’t rocket science. The insurance companies are trying to pick their own regulator.”

From Oct. 12 through Oct. 22, the California Chamber of Commerce’s political action committee, known as JobsPAC, spent $2.7 million on television ads and campaign mailers in the insurance commissioner’s race — $1.4 million attacking Jones and $1.3 million promoting Villines.

That is more than double the amount that has been spent by both candidates combined during the same period.

Because the chamber-sponsored PAC is what is known as a “general purpose committee” — that is, it has spent money on a variety of political contests — it does not have to disclose the names of its top donors in its advertising.

That arrangement, Heller said, has allowed the insurance industry to mask its involvement in the race.

Among the companies that have recently contributed to JobsPAC are Allstate ($1.1 million), Liberty Mutual ($640,000) and Progressive ($390,000). In addition, Joseph George, CEO of Mercury Insurance, has contributed $1 million.

Both candidates have pledged not to accept contributions from the industry. That same position against accepting industry money was taken four years ago by incumbent Republican Steve Poizner and eight years ago by his Democratic predecessor, John Garamendi.

Because those commissioners refused industry contributions, Heller said, “For the last eight years insurance companies have had to knock on the door at the Department of Insurance like everyone else. They haven’t had a secret key.”

The issue has been a point of political sensitivity since the terms of former Commissioner Chuck Quackenbush, who accepted $8 million in industry contributions. Quackenbush was forced to resign in disgrace a decade ago after diverting funds from industry settlements relating to the Northridge earthquake into nonprofits that used the money to promote his political interests.

Villines campaign stresses it has nothing to do with JobsPAC.

“We have no knowledge of JobsPAC activity and we have no control over them,” said Jennifer Gibbons, spokeswoman for the Villines campaign. “Mike has made it very clear that he will be a tough regulator.”

The insurance commissioner is unique among statewide elected officials in that he has direct regulatory authority. Because of that, voters are suspicious of any role the industry might play in campaigns for the office, said Ted Lascher, a political science professor at Sacramento State University.

If voters knew of an industry role in supporting one candidate over the other, Lascher said, “I would think that would be pretty damaging. This is a regulatory office that literally sets rates on the industry.”

The political director of the Chamber PAC did not return a phone call on Wednesday. An e-mail statement sent by the group in response to the call says, “JobsPAC supports Democratic and Republican candidates who have demonstrated commitment to a pro-jobs agenda.”

The Villines campaign has criticized Jones for accepting several thousand dollars in direct contributions from law firms that represent insurance industry clients.

Heller said he believes Jones should return that money, but that the far greater concern is the role of the industry in the independent expenditure campaign.

“The reason there is a difference is not just the scale — thousands, as opposed to millions — but also the scheme,” he said.

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