Vargas takes insurance job;

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Ex-assemblyman’s reversal draws fire

The San Diego Union-Tribune (California)

SACRAMENTO, CA — During his campaign for Congress, Juan Vargas was harshly criticized for accepting $335,000 in campaign contributions from insurers and frequently taking their side while chairman of the Assembly Insurance Committee.

The San Diego Democrat not only disputed that but he went further and said he would not take a job in the industry after leaving office.

Now he has done just that.

Vargas, whose Assembly term ended this week, is the new vice president of California external affairs for Safeco, a Seattle-based company that sells auto, surety and homeowners insurance to 4.3 million customers nationwide.

“I’m really excited about the job. It’s a great opportunity for me and the community,” Vargas said.

Some consumer advocates are outraged, saying the job is a payoff for Vargas’ friendly approach toward the industry over the years.

Doug Heller of the Foundation for Taxpayer and Consumer Rights charged that Vargas put the industry ahead of consumers by blocking bills to aid victims of the Southern California wildfires, including those in San Diego County.

“We thought it was because they were giving him so much in campaign contributions,” Heller said. “Now it looks like he’s been creating a résumé for this job, while chairing this committee by giving the insurance industry what they wanted.”

Countered Vargas: “That’s certainly not the case.”

In June, Vargas lost a bruising Democratic primary in the 51st Congressional District to Rep. Bob Filner, who repeatedly attacked Vargas for having close ties to the industry.

Besides campaign contributions, industry officials treated Vargas to lavish dinners and golf trips during his six-year Assembly career. Vargas, who positioned himself as a moderate Democrat, denied he was influenced by contributions or gifts. He cited his votes in favor of bills the insurance industry opposed.

In April, Vargas was asked whether he would take an insurance job if he lost the election. “I’m not going into insurance or finance,” he told The San Diego Union-Tribune. “I’m just not interested.”

Vargas said yesterday that he changed his mind because he considers his Safeco job more about community relations than insurance.

“I didn’t want to sit behind the desk and do insurance work or do insurance defense work for a law firm,” he said. “This job helps get me out in the community and get the firm’s name known in the community.”

Vargas will help Safeco make a major push to expand into the California market, company officials said.

The Harvard-trained lawyer said the job was attractive because it allowed him to stay in the San Diego area, where he lives with his wife and two children.

He also said he considered an offer to head the Mexican American Legal Defense and Education Fund, and jobs with two law firms. All of those positions would have required him to move.

Vargas’ new job prompted the Foundation for Taxpayer and Consumer Rights to call on Assembly Speaker Fabian Núñez, D-Los Angeles, to close the revolving door that allows lawmakers to move from public office to industries they used to oversee.

The group demanded that Núñez make new rules barring members of the Insurance Committee from accepting campaign contributions from insurers. It also called on Núñez to require the new Insurance Committee chairman, Democrat Joe Coto of San Jose, to pledge not to take a job in the insurance industry when he leaves the Legislature.

Rex Frazier, president of the Personal Insurance Federation, which includes Safeco, defended Vargas’ tenure as committee chairman. He said Vargas challenged all sides to put forth their best ideas.

“He gave no one a free pass,” Frazier said.

Frazier lashed out at the Foundation for Taxpayer and Consumer Rights, saying they are not taken seriously in the Legislature.

Their complaints about Assembly Member Vargas’ tenure reflect their inability to make public policy arguments, so they are resorting to cheap shots.” he said.

State records show that Safeco contributed at least $9,700 to Vargas’ Assembly campaigns, according to The Associated Press.

Vargas, who grew up in a family with 10 children, once trained to be a Jesuit priest. As a lawyer, he once did insurance defense work. He served nearly eight years on the San Diego City Council before his three terms in the Assembly.

Once considered a rising star in the Assembly, Vargas played a key role enacting workers’ compensation insurance reforms and was a contender for the speakership. Vargas said that while he was excited about his new job in the private sector, he would not rule out a future run for office.

“I keep myself open to all things,” he said.

Consumer Watchdog
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