Consumer Group Says Aide, a Former Insurance Lobbyist, Should Be Fired
Santa Monica, CA — A former insurance industry lawyer, whose appointment as senior counsel by Insurance Commissioner Steve Poizner stirred controversy earlier this year, covertly assisted insurance companies in a lawsuit they brought against the Commissioner, according to e-mails obtained by the Foundation for Taxpayer and Consumer Rights (FTCR). The lawsuit, which was strongly opposed by consumer advocates and the Commissioner, sought to block Department of Insurance regulations limiting the impact of motorists’ ZIP Codes on their auto insurance premiums.
In a letter sent today to Commissioner Poizner, FTCR founder and Proposition 103 author Harvey Rosenfield and FTCR’s Executive Director Doug Heller said the aide, William Gausewitz, should be fired. Last February, consumer advocates criticized Poizner for hiring Gausewitz, who had served more than a decade as an insurance industry lobbyist, which they said violated the Commissioner’s inaugural pledge that “This office must always be fiercely independent from those being regulated.”
The e-mails, obtained under the California Public Records Act, show that the insurers drafted a “declaration” they wanted Gausewitz to submit to the Sacramento Superior Court to support the companies’ position that a Department of Insurance fund should pay the legal costs of consumer advocates, rather than the insurance companies that brought the suit and lost. The consumer groups that had defended the new regulations in court strongly opposed the insurers’ scheme.
Gausewitz sought to keep his assistance to the insurers secret, as he said in an email to one of their lawyers:
“Please prepare a new declaration just like the one you provided me earlier, with necessary name changes, using the following text. Send the draft declaration, in Word format, to me alone. Please don’t talk about this to other folks until we have talked about it further.”
The e-mails show that Gausewitz and insurers withheld the draft declaration and his communications with the insurers from the Department’s lawyers in the California Attorney General’s office, despite their awareness that the Attorney General should have been informed. “I don’t think we can file this on our own as long as the A.G. is in the case,” an industry lawyer wrote to a colleague. Another insurance lawyer wrote Gausewitz:
“Note that our lawyers had drafted it for your counsel’s signature, but it was not sent to him for signature purposes because there is some sensitivity re: attorney-client issues.”
Ultimately, the declaration was presented to consumer advocates as Mr. Gausewitz’s own idea. And insurance company lawyers filed the Gausewitz declaration with the court on legal letterhead indicating that it was being submitted by the California Attorney General. The Attorney General, however, was apparently unaware of its filing.
Consumer groups that had defended the new regulations in court strongly opposed the insurers’ request, and the court ruled against the insurers.
“When an employee of the Department of Insurance helps insurance companies in a lawsuit they brought against his own agency, hides the scheme from his own lawyers at the Attorney General’s office, all for the purpose of relieving those companies of the responsibility to pay the costs of their lawsuit, it is clear that the interests of consumers and taxpayers are being undermined along with the integrity of the Department of Insurance,” said Rosenfield. “Commissioner Poizner promised to maintain the Department of Insurance as an open, independent agency committed to the protection of California consumers. Now he has to stand by that promise by firing Mr. Gausewitz.”
In their letter to Commissioner Poizner, FTCR wrote:
The documents obtained by FTCR show that Mr. Gausewitz continues to work closely with and on behalf of the insurance industry, albeit in a covert fashion — conduct that is utterly incompatible with your pledge of an independent administration… This time, of course, the industry lost in court and Mr. Gausewitz got caught. But the Department will act on many, perhaps thousands of, other important decisions that will directly involve the interests of consumers. Californians have the right to expect that these decisions will be made in their best interests, not the industry’s.”
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The Foundation for Taxpayer & Consumer Rights is California’s leading non-profit and non-partisan consumer watchdog group. For more information please visit our website at: www.ConsumerWatchdog.org