Donation Regarded As Quid Pro Quo for Law That Allows Insurers to Surcharge Poor in Violation of Prop 103

The Foundation for Taxpayer and Consumer Rights is calling on Governor Davis to return a $25,000 contribution from Mercury Insurance to his anti-recall campaign. The contribution was made public today by the Secretary of State.

Consumer advocates believe that the Mercury money is nothing less than the payment of a bribe in exchange for Davis’ signature on legislation sponsored by Mercury Insurance and opposed by consumer advocates, low-income groups and Insurance Commissioner Garamendi. Davis vetoed virtually the same bill last year after it was exposed that he had received a $25,000 contribution from Mercury just as the bill arrived on his desk.

“This is a payoff, pure and simple,” said consumer advocate Douglas Heller of the Foundation for Taxpayer and Consumer Rights (FTCR). “Governor Davis may be presenting himself publicly as a reborn populist, but clearly it still pay to play with Davis. The Governor should return this contribution as well as the $220,000 Mercury has given him since he was elected Governor. This contribution exposes the very worst in Governor Davis.”

The Mercury-sponsored bill that the Governor signed last month (SB 841 — Perata) will allow Mercury and other insurers to add a $500 surcharge to the insurance premiums of drivers who have not had previous insurance or have had a lapse in coverage. FTCR noted the irony of Davis signing SB 60, a bill to provide drivers licenses to immigrants after he signed the Mercury law that will make insurance so much more expensive for these newly licensed drivers.

“Davis panders to whomever will give him votes or money even if his policies are totally contradictory. Davis should apologize to the thousands of newly licensed drivers who will not be able to afford car insurance as a result of this bill.”

When he vetoed the legislation last year, Davis acknowledged that the bill illegally violated Proposition 103, which bans surcharges on previously uninsured drivers. According to FTCR, the bill still violates Proposition 103 and the group will sue to block the law.
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