Arnold has appointed an
insurance industry lobbyist — Bill Gausewitz — as the Director of the
Office of Administrative Law (OAL). The OAL is a lesser-known but
hugely important agency that serves as the state’s regulatory
gatekeeper. It is the last hurdle for all regulations proposed by
California agencies before new rules can take effect. For California
law to be properly implemented, the OAL must be neutral and free from
special interest influence. But Arnold has decided to turn it over to
the special interests.
This is actually Arnold’s second attempt at filling the post; the first
flamed out because that nominee, Ed Heidig, was considered too partisan
for the job. But this nomination is worse than partisan; it’s pure
special interest payola to the insurance industry, which has given
Arnold over $1 million in campaign contributions.
Gausewitz is the Assistant Vice President for State Affairs for the
American Insurance Association, a major Sacramento and Washington, DC
lobbying outfit. For the insurance industry, having one of their own
atop the OAL gives the companies an unprecedented check on the
Department of Insurance. Every regulation issued by Insurance
Commissioner Garamendi — who refuses to accept insurance industry
contributions — has to pass through the OAL and can be rejected or
sent back for amendment. If the State Senate were to confirm Gausewitz,
the OAL would be used by the special interests to block consumer
protections that Garamendi and other regulators propose.
It is not entirely surprising that Arnold would give such a gift to the
American Insurance Association (AIA), both because of all the insurance
money to the Gov and, not coincidentally, because the AIA is closely
tied to Mike Murphy, the political strategist who helped Arnold become
Governor. Murphy even set up a private meeting between the AIA and the
Gov. when he made a trip to DC earlier this year.
Friend of Arnold or not, the AIA is indisputably a special interest
that will always be lobbying the regulators, but should never become
the regulator.
