Choice to head Office of Administrative Law has strong links to insurance industry.

Sacramento Bee

SACRAMENTO, Calif. —  With a confirmation hearing scheduled for Wednesday, a consumer advocacy group is asking state senators to reject Gov. Arnold Schwarzenegger‘s choice to head the Office of Administrative Law unless he agrees to recuse himself from regulatory decisions involving the insurance industry.

Bill Gausewitz was assistant vice president of state affairs for the American Insurance Association until Schwarzenegger tapped him last month.

While low-profile, Gausewitz’s government role is far-reaching, in that it calls for him to decide whether all regulations adopted by state agencies fall within the guidelines of the law. Critics say sometimes that can be a judgment call.

In his industry capacity, Gausewitz has argued against financial privacy legislation and efforts to extend the statute of limitations on personal injury and construction defect lawsuits.

“Everyone I’ve talked to has said he’s a credible, competent person,” said Doug Heller of the Santa Monica-based Foundation for Taxpayer and Consumer Rights. “I have no reason to think he couldn’t competently handle issues on logging, or school issues. I do believe he’s incapable of divorcing himself from his years of lobbying for the insurance industry.”

Gausewitz referred requests for comment to the governor’s office. While his industry ties are expected to be raised at the Senate Rules Committee hearing, the 50-year-old Republican, a lawyer by training, also has state government experience and some powerful supporters across the political spectrum.

From 1998 to 2000, before taking his AIA post, Gausewitz supervised the state Senate Republican policy office under then-Republican Leader Sen. Ross Johnson of Irvine.

Johnson is vice-chairman of the Rules Committee and a close friend of the committee chairman, Senate President Pro Tem John Burton, D-San Francisco.

“He used to work for Ross, and I think he’s a good guy,” Burton said Tuesday of Gausewitz.

Burton said Heller raises “a fair question” and that Gausewitz should address how he intends to deal with insurance-related regulations. But Burton indicated he is not overly concerned.

“Sometimes it’s good to have a fox guarding the hen house,” he said.

Gene Livingston, a lobbyist who was the state’s first Office of Administrative Law director two decades ago, said when he has worked with Gausewitz on legislation, “Bill is the one who does the hard analysis” of the intended and unintended consequences of words and phrases.

“That’s exactly what that job calls for,” Livingston said. “That job basically requires a set of legal skills and has nothing to do with making any policy decisions.”

Gausewitz is not the administration’s only tie to the AIA. Schwarzenegger’s political strategist Mike Murphy previously counted the group among his firm’s lobbying clients.

Murphy came under fire earlier year for attending an out-of-state meeting between the governor and members of the group who were urging changes to workers’ compensation law.

Gausewitz’s post pays $123,264 a year. His is one of six gubernatorial appointments scheduled for hearings Wednesday, in time for their names to go before the full Senate for votes before the end of the legislative session.