Is Mercury Insurance Chairman’s Big Donation to Republicans Aimed at Helping His Anti-Consumer Ballot Initiative, Group Asks

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Santa Monica, CA — Mercury Insurance Chairman George Joseph contributed $1 million to the California Republican Party to fund a ballot initiative that would repeal the new State Senate district lines drawn by an independent commission earlier this year.   Today, the California Supreme Court rejected Republican efforts to toss out the commission's redistricting plan. Joseph has already contributed over $8.1 million to a ballot initiative to repeal Proposition 103's prohibition on insurance companies from considering a driver's coverage history when a motorist applies for insurance. In both instances the insurance billionaire is wielding his vast fortune to undermine voter-approved measures in order to advance his own self-interest, said consumer advocates with the nonprofit, nonpartisan Consumer Watchdog.

Consumer Watchdog is asking whether Joseph's contribution to the GOP may be connected to his insurance initiative. There is speculation that Joseph wants the GOP to fund a referendum on SB 202, which places all ballot measures on the November general election rather than June primary ballot. Joseph's own initiative is affected by SB 202, however, he may not want to appear to be associated with the referendum, as it would look too self-serving.

"Is George Joseph throwing a lifeline to Republicans to free up money from a less controversial GOP donor to support the referendum on SB 202?" asked Consumer Watchdog Executive Director Doug Heller. "If there is a deal to cover up the source of donations to the referendum, it could violate state campaign finance laws and should be investigated."

Joseph's proposed measure is a virtual replication of the June 2010 measure, Proposition 17. It would repeal Proposition 103's ban on considering a driver's insurance coverage history when setting rates and premiums. As with his failed attempt in 2010, Joseph's consultants likely advise that his anti-consumer initiative has more of a chance of success during a primary election with lower voter turnout.

Punishing Democrats?

The donation may also be an attempt by Joseph to punish Democratic officials who supported the November-only initiative law. This would not be the first time Joseph funneled money to the GOP to avenge legislative action of California Democrats. According to a San Francisco Chronicle report from 2010: "In 1996, when then-state Senate Pro Tem Bill Lockyer, a Democrat, opposed Mercury's effort to amend Prop. 103, company chairman Joseph responded by writing a $500,000 check – to the state GOP." ["Insurer May Have Violated Law, Report Reveals," "San Francisco Chronicle" February 8, 2010].

"When politicians, courts or voters do things that George Joseph doesn't like, he spends from his vast fortune to get his way," said Heller. "Californians should be offended when a billionaire insurance executive tries to use his wealth to deceive voters and exact political revenge."

Joseph's proposed initiative would allow insurers to surcharge customers who had not purchased auto insurance at some point during the past five years, whether or not they had been driving. Consumer Watchdog estimates that those surcharges would increase premiums by as much as 40% or more for millions of Californians including students who went away for college, Californians who previously used mass-transit, and the long-term unemployed.

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Providing an effective voice for American consumers in an era when special interests dominate public discourse, government and politics. Non-partisan.

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