Posts Tagged ‘consumer’

Mercury: Kind and Generous

June 4th, 2010

By Jennifer Evans Gardner, THE HUFFINGTON POST

Mercury Insurance is so generous.

On Tuesday, California voters will get the chance to vote on Prop 17, which Mercury, out of the goodness of their hearts, has spent some $10 million on. Those crazy kids. All to save us money.

Unless you live under a rock, you’ve heard about this initiative, which if passed, will allow insurance companies to raise premiums on drivers who, for any reason, didn’t have insurance coverage at some point in the past five years. They’re calling it a “loyalty discount.”

Well, duh, you say. Mercury doesn’t want to save us money.

But it’s not just Prop 17… Mercury doesn’t appear to like paying legitimate claims either. I would know. I’m a Mercury insured.

Two years ago, I was rear-ended by another Mercury insured while sitting at a stop sign, an accident that resulted in a neck injury. No problem, I thought. Two civilized individuals, both insured by the same company – why would there be a problem? I got my car repaired, then contacted Mercury to let them know they needed only to reimburse my out-of-pocket medical expenses – nothing else.

Know what they said?

The generous folks at Mercury offered me about half of what I had paid out of pocket. In other words, I would only have to pay a few thousand dollars for being rear-ended. Lucky me!

Wait a minute… isn’t that what insurance is for, I asked? Why do I make those monthly payments, if not to keep from going into debt in case of an accident? Apparently not. Even though I had gone to my doctor of 25 years, a reputable physician in Beverly Hills, in their eyes, I had “over-treated,” so I was out of luck.

I had a choice. I could accept their offer and eat the difference, or I could sue them. However, with some research, I discovered countless similar complaints… it seemed that this was actually a pattern with Mercury; and that if I did venture to sue them, I would likely spend years in depositions and a trial, not something I had the time or the patience for.

In a phone interview, Naomi Seligman, Director of Public Affairs for Consumer Watchdog, a non-partisan consumer advocate organization, said, “there are hundreds of complaints lodged against Mercury for everything from discrimination to trying to weasel customers out of claims money.” I was hardly unique.

I decided to sue them in small claims court.

I know what you’re thinking. You can’t sue an insurance company in small claims court! True. But if you sue their insured, Mercury will send a representative. Not for you, silly — for the other guy.

Of course, small claims court is for quick, no-frills citizen vs. citizen hearings; however, Mercury found a loophole. In fact, the Mercury representative in my case seemed to know a lot of folks at the courthouse, and admitted to the defendant that he was “a regular.”

My “Mr. Smith Goes to Washington” (or “Ms. Evans-Gardner Goes to Van Nuys”) moment was a proud one. I showed up in court with a thick file of color-coded exhibits, my witnesses, and a kick-ass closing argument, if I do say so myself. I greeted the defendant, apologizing for having to drag him into court. He was cordial, but embarrassed. An insured driver, he would have also hoped to avoid such a situation.

A Mercury rep, holding an official-looking briefcase, stuck out his hand with a big smile. “Good morning, I am Mr. S, here from Mercury Insurance on behalf of Mr. X.” “Oh, good morning,” I replied. “Are you here for me, too?”

He looked puzzled. “You?” he smirked.

“Well, I’m your insured, too.” I looked around the room. “Is there a Mercury guy for me?” He looked flustered. “Gosh,” I said. “Could there be a conflict of interest?”

He proceeded to advise me, kindly, mind you, that I had little chance of winning and suggested I accept their settlement. “No, thank you,” I answered politely.

“I see you have your husband and son here,” said Mercury Man. Well, yes, I explained. Not only were they witnesses, but this was also a teaching moment for my 12 year-old. I looked him straight in the eye, adding, “I want my son to see that when someone tries to take advantage of you, you stand up for yourself.” He sputtered something about how, as a parent, he appreciated that. I wondered how his parental ethics figured into bullying a victim into paying for her injuries.

To make a long story short, my Perry Mason moment never happened. The commissioner simply looked at the evidence and awarded me the maximum amount, plus court fees.

In other words, I beat Mercury’s scrawny ass.

All I had to do was sit back and wait for my check, right? Wrong. It didn’t come. I couldn’t believe it. Could Mercury really be so bold as to violate a Superior Court order?

I called Darrel Ng, Press Secretary for the California State Department of Insurance, who said, “Mercury has been fined $500,000 in the past five years for claims handling practices, among other things.” Guess they don’t mind breaking a few rules.

Meanwhile, $500,000 over five years? That’s just $100,000 per year, a downright bargain for Mercury, whose profits were reported at over $400 million last year.

Turns out, Mercury isn’t all that generous after all. Spending millions to save us money? That’s a good one. The question is: how many voters will they fool with their misleading ads and ballot language?

I finally received my check the other day, exactly two years after the accident, and though my neck still hurts, that’s a load off my mind. By the way, I’m shopping for a new auto insurance company… any suggestions?

Vote ‘Yes’ on Prop. 13; Reject 15, 17

June 4th, 2010

EDITORIAL, THE NORTH COUNTY TIMES (San Diego, CA)

OUR VIEW: Encourage Earthquake Retrofits; Reject Rest

Voters in Tuesday’s election will have choices to make on a set of statewide propositions. Here are our views on three of the five proposals and a recap of our stance on the other two:

On Proposition 13, we recommend a yes vote. Prop 13 would stop tax assessors from reassessing new construction when that work is done to retrofit existing buildings to meet local earthquake standards, regardless of the buildings’ type or use.

The measure, which was put on the ballot by the Legislature without opposition, would shield property owners from a forced property tax hike, and if defeated, would discourage compliance with earthquake standards.

On Proposition 15, we recommend a no vote. This measure repeals the ban on public funding of election campaigns and creates a mechanism for public funding of qualifying campaigns for the office of secretary of state by imposing higher fees on registered lobbyists.

We strongly disapprove of lifting the ban on public funding of political campaigns and the attendant mischief that would ensue. The measure is also an unnecessary, although minor, burden on lobbyists, and an unneeded injection of the government into a political race —- an easy no.

On Proposition 17, we recommend a no vote. The initiative would allow insured drivers to take their “continuous coverage” discount with them if they change insurers. We agree with Insurance Commissioner John Garamendi and former state Attorney General John Van De Kamp that this is bad business that may result in big rate hikes for anyone who stops and then restarts insurance.

We have previously urged no votes on the other two propositions on the ballot: Proposition 14, which would change the primary system to a “top two” vote-winner runoff system, and Proposition 16, which would impose a new two-thirds vote requirement before any local public electricity provider went into business.

These are our recommendations —- support Prop. 13 and encourage earthquake retrofits, but reject the rest.

Whether you agree or not, please remember to vote Tuesday.

opinion@nctimes.com

Consumer Group Warns of Mail Fraud from Insurance Industry Campaign for Prop 17

June 4th, 2010

NEWS RELEASE

Contact: Doug Heller, 310-392-0522, ext. 309; or Naomi Seligman, 310-392-0522, ext. 318

Desperate Mercury Insurance Dumps Another Million into $16 Million Campaign and Distributes Last Minute Mailer from Phony “Consumer Coalition”

Santa Monica, CA — Facing a surge of voter opposition in the last few days of its campaign for Proposition 17, sponsor Mercury Insurance injected another $1 million dollars into its campaign to fund last-minute mailings and advertising that conceal the insurer’s support and feature a fraudulent “Consumer Coalition of California.”

Click here to view the mailer.  To date, Mercury has donated $16 million to fund the Prop 17 campaign.

The so-called “Consumer Coalition of California” whose name appears on the Prop 17 mailer is run by a Texas woman, Virginia Jarrow, who has repeatedly sided with industry. All legitimate consumer groups in California, including, Consumers Union, Consumer Watchdog and Consumer Federation of California oppose Propositon 17.  The Mercury funded mailers also fail to identify Mercury as an insurance company in state mandated disclosures. The disclosure on the mailers state: “Paid for by Yes On 17-Californians For Fair Auto Insurance Rates And Mercury General Corporation And Affiliates.”  Mercury Insurance’s corporate parent, Mercury General Corporation, doesn’t have “insurance” in its name.

“This is a consumer fraud,” said Harvey Rosenfield, founder of Consumer Watchdog. “Mercury Insurance Company is trying to put one over on the voters by sending out mailings in the name of a consumer coalition that does not exist. All legitimate consumer groups in California oppose 17 because it will allow insurance companies to raise auto insurance premiums.”

Mercury Insurance has been paying other front groups for their “support.”

Californians for Fair Auto Insurance Rates (Cal-FAIR)

Mercury Insurance has paid hundreds of thousands of dollars to Bicker, Castillo & Fairbanks, a public relations firm, to create a front group called Californians for Fair Auto Insurance Rates or CAL-FAIR.  The chief spokesperson for CAL-FAIR, Kathy Fairbanks, is a communications consultant and partner in the firm that runs campaigns for several different corporations and interest groups.

Consumers First, Inc.

Jim Conran is listed as the co-chair for Californians for Fair Auto Insurance Rates (Cal-FAIR)/Yes on 17 campaign. As head of something he calls Consumers First, Inc. (which doesn’t appear to be incorporated or have a website), Conran has been paid tens of thousands of dollars by the Prop 17 campaign to help Mercury Insurance try to deceive voters on the measure.  Prop 17 is not his only deception. Mr. Conran is a pay-for-play PR professional who is paid by industry executives to run several front group projects.

Kirk West

Kirk West, a co-chair of CAL-FAIR, has already made over $30,000 as a paid spokesman for Mercury Insurance’s campaign on Prop 17. He was formerly the President of the Chamber of Commerce and is now a gun-for-hire for industry executives.

Prop 17 would penalize Californians who opt to stop driving for a time, for virtually any reason. Voters would be required to pay up to a $1,000 more dollars a year for auto insurance when they sought to restart coverage.

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Campaign for Consumer Rights is the campaign affiliate of the nonprofit Consumer Watchdog and the sponsor of Stop Prop 17  - http://www.StopProp17.org

Endorsements for June 8th Primary Race

June 3rd, 2010

By Marta Evry, VENICE FOR CHANGE

You do know there’s a primary this Tuesday, don’t you? Here’s your one-stop shopping list for all the ballot initiatives, state-wide primary races and local races in AD-53 (Los Angeles County).

PROPOSITIONS
(a big thank you to the Courage Campaign for the following proposition endorsement list)

PROP 13: VOTE YES
Seismic retrofits – Provides a tax break to property owners for making seismic retrofits to their buildings.

SUPPORTING: AFSCME, CA Democratic Party, Calitics
OPPOSING: CA Nurses Association

PROP 14: VOTE NO
Top-two primary – Changes the way primary elections work, sending top two votegetters at the primary onto the general election regardless of party. Intended to undermine progressive candidates and limits voter choices at the general election.

SUPPORTING: Gov. Arnold Schwarzenegger
OPPOSING: AFSCME, CA Democratic Party, Calitics, CA Federation of Teachers, CA League of Conservation Voters, CA Nurses Association

PROP 15: VOTE YES
Fair elections – Repeals ban on public financing, allowing expansion of clean money to limit influence of corporate donations. Raises fees on lobbyists to fund a public financing system for Secretary of State election beginning in 2014.

SUPPORTING: AFSCME, CA Democratic Party, Calitics, CA League of Conservation Voters, CA Nurses Association, CREDO Action, League of Women Voters
OPPOSING: California Chamber of Commerce

PROP 16: VOTE NO
PG&E power grab – Placed on the ballot by the efforts of PG&E, Northern California’s privately owned electric utility, this proposition requires a 2/3rds vote to create public power districts or allow local governments to purchase their own renewable power. Protects PG&E’s existing monopoly.

SUPPORTING: PG&E, California Chamber of Commerce

OPPOSING: CA Democratic Party, Calitics, CA League of Conservation Voters, CA Nurses Association, CREDO Action, League of Women Voters

PROP 17: VOTE NO
Auto insurance surcharge – Placed on the ballot by the efforts of Mercury Insurance, this proposition would weaken existing consumer protections and allow auto insurance companies to charge drivers as much as double premiums if they are late with their payments.

SUPPORTING: Mercury Insurance, California Chamber of Commerce
OPPOSING: AFSCME, CA Democratic Party, Calitics, CA Nurses Association, CREDO Action

Corporate Funded Senior Group – ­Used by Insurers In Prop 17 Campaign – Now Laundering Insurance, Industry Money in Candidate Elections

June 3rd, 2010

NEWS RELEASE

Contact: Doug Heller, 310-480-4170, or Naomi Seligman, 310-392-0522, ext. 318

FPPC Complaint Filed Against “California Senior Advocates League PAC” For Failing to Disclose Its Sole Funders – Big Corporate Political Action Committees

Santa Monica, CA – The Campaign for Consumer Rights (CCR) has filed a complaint with the Fair Political Practices Commission (FPPC) about the nearly $320,000 that the California Senior Advocates League PAC appears to have laundered for big insurance companies and other corporations. The corporate groups are using the purported senior group to avoid disclosing the true funding behind the tv ads and attack mailers that have become pervasive in San Diego in the final weeks before the election.

CCR’s complaint against the Senior Advocates PAC shows that the front group created a political action committee just last month to funnel money from insurance and other industry funded groups to elect Juan Vargas and defeat Assemblywoman Mary Salas, candidates in the Democratic primary for Senate District 40 in San Diego.

The so-called senior group has also been prominently listed in mass campaign mailings as a supporter of Prop 17, to hide the $15 million Mercury Insurance has spent to promote the initiative to raise car insurance rates.  Mercury Insurance is the largest individual corporate donor to one of the two political action committees funding the Senior Advocates PAC.  A timeline of the Senior Advocates PAC’s contributions and expenditures is below.

“Insurance companies and other big corporations are secretly trying to influence the results of the election in San Diego by funneling money through a group that sounds a lot more trustworthy to voters than big insurance, big tobacco and big oil,” said consumer advocate Doug Heller.  ”Big industry wants to win its agenda in Sacramento, and they’re using illegal money laundering tricks to do it.”

On May 18th, the day it was created, the Senior Advocates PAC began receiving funds from two corporate PACS and immediately spent the money on independent expenditures against Assemblywoman Mary Salas and in favor of Juan Vargas.  The two corporate PACs funneling money through the so-called “Senior Advocates” are “JobsPAC, A Bi-Partisan Coalition of California Employers” and “Put California Back To Work Sponsored By The Civil Justice Association Of California.” JobsPAC is this largest overall funder of Put California Back and Mercury Insurance’s $50,000 contribution is the largest from an individual corporation to Put California Back.

In the letter to the FPPC, Heller wrote: “Unless the committee is ordered to cease and desist and immediately comply with the Political Reform Act, it will continue to provide false information to the voters for the purpose of hiding the actual sources of funds in connection with expenditures in Senate District 40.”

The complaint details how the Senior PAC and others involved in this scheme appear to be violating Government Code sections 84301 and 84302, related to disclosing the true source of funds, and possibly section 84506, related to disclosures in advertisements.  The complaint can be downloaded at http://bit.ly/cSuxUU

In addition to laundering money on behalf of the two corporate PACs, Senior Advocates, incorrectly describes JobsPAC as a “coalition of employEES” rather than “employERS” in its campaign filings, which only adds to the deception about the source of these funds.   On May 28, the Senior Advocates PAC also made a $103,000 independent expenditure against John Laird who is running to fill the Senate seat vacated by Lieutenant Governor Abel Maldonado.

Timeline of the Contributions Received and Expenditures Made by California Senior Advocates League PAC (CSAL PAC)

CSAL PAC Formed as a committee: 5/18/10

CSAL PAC Received from JobsPAC $5,000            5/18/10

CSAL PAC Received from Put California Back to Work $15,000          5/19/10

CSAL PAC Mailer opposing  Mary Salas                                $9,517.62       5/19/10

CSAL PAC IE to Oppose Mary Salas                                    $28,353.80     5/20/10

CSAL PAC Received from JobsPAC:                                    $94,000           5/21/10

CSAL PAC Made to Working Families for Vargas  $100,000         5/24/10

CSAL PAC IE to Oppose Mary Salas                                    $ 1,250.00       5/24/10

CSAL PAC Received from Put California Back to Work $100,000         5/27/10

CSAL PAC Received from JobsPAC                                    $100,000        5/28/10

CSAL PAC Made to Working Families  for Vargas   $100,000         5/28/10

CSAL PAC IE to Oppose John Laird                                    $103,000         5/28/10

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Campaign for Consumer Rights is the campaign affiliate of the nonprofit Consumer Watchdog and the sponsor of Stop Prop 17  - http://www.StopProp17.org.

The Good, the Bad and the Ugly

June 3rd, 2010

By Jake Armstrong, PASADENA WEEKLY

There’s plenty at stake with the propositions on the June 8 ballot, pardner

It’s been many moons since voters have been ‘round these parts, but it’s time for the electorate to mount up for the June 8 primary election.

While overtones of race-baiting and opportunism have consumed some of the political contests, voters face a much more diverse and wide-ranging list of decisions in the five initiatives appearing on the ballot. From car insurance to earthquake retrofits, voters are being asked to settle many debates over issues that will no doubt shape the state’s future.

But how’s a fella supposed to get ready for this showdown, especially since the initiative process is rife with misdirection and prevarication? The trick is recognizing the good, the bad and the ugly in each.

Proposition 13
Currently, homeowners who retrofit their unreinforced brick homes to withstand the state’s infamous earthquakes face a reassessment of their property values, the most likely outcome of which is higher property taxes. This initiative, perhaps the least publicized of all on the ballot, would eliminate that reassessment for qualifying seismic retrofit improvements until the building is sold.

The Good: Fear of a higher property tax bill may keep some homeowners from protecting their homes from earthquakes, and this initiative might help assuage that fright.
The Bad: Governments already strapped for cash may see a small reduction in property tax revenues.
The Ugly: So low are the stakes that no committees have been formed to support or oppose the measure.

Proposition 14
Right now, some of California’s candidates for state and federal office are fighting tooth and nail to get their message to their party’s faithful — the Democratic and Republican voters who will settle the score when they vote partisan ballots on June 8. But what if there were no political parties in primary elections? That’s the question Proposition 14 seeks to answer. It would eliminate partisan ballots for state and federal primaries, meaning voters could choose from the array of candidates running for election, rather than just those from their stated political party. Moreover, it would make it so only the two candidates with the most votes would compete in the general election, regardless of their party affiliation.

The Good: The initiative would open up the primary election to all voters, rather than just the party faithful, meaning the growing and influential bloc of decline-to-state and non-partisan voters would get a louder voice in primary elections, according to Bob Stern, president of the Los Angeles Based Center for Governmental Studies. By sending the top two votegetters to the general election regardless of their party affiliation, the initiative could also give a boost to more moderate candidates who might otherwise lose a primary election, Stern said.
The BAD: Third parties like the Greens and Libertarians may suffer at the polls because their candidates will no longer appear on general election ballots in November, Stern said. Moreover, candidates will have to make their pitches to many more voters, rather than just the party faithful, meaning they may have to raise considerably more campaign cash to make a successful run, which could force them to become even cozier with special-interest groups whose cash is the lifeblood of many elections. Sending the top two votegetters to the general election would almost ensure that only Republicans and Democrats will be competing in the general election, Stern said. While the measure would likely create more moderate Democratic candidates, there is little chance it would produce more centrist Republican candidates because voter registration in most of the state’s political districts more strongly favors the Democrats, he said.
The UGLY: Proposition 14 would do away with write-in candidates, which could complicate matters if candidates with extremist views are competing in the general election. The measure could also make the process vulnerable to manipulation if candidates were to launch preemptive campaigns against one another, as former Gov. Gray Davis did against Richard Riordan in the 2002 gubernatorial primary to take on the weaker Republican contender, Bill Simon, in November.

Proposition 15
With all the debate over the influence of money on the political process, it’s incongruous to some that California law currently bans public financing of political campaigns. This measure, dubbed the California Fair Elections Act, would scrap that ban and launch a public funding experiment for Secretary of State candidates in the 2014 and 2018 elections. Candidates in those races who agree to limit spending and private contributions would have their campaigns funded with grants paid for through new fees charged to lobbyists, which will exceed about $6 million each election cycle.

The Good: The measure could remove the financial barriers that keep many political hopefuls, especially women and minorities, from running for office, as occurred in Arizona and other states that enacted public financing of elections, according to Common Cause California, which supports the measure. It also would permit cities and counties to pursue publicly funded campaigns, though charter cities, such as Pasadena, were never affected by the state’s ban.
The BAD: If the measure passes, lobbyists will almost certainly file a lawsuit to stop it, arguing their fees should only be spent on administering the state’s lobbying program, Stern said. In fact, lobbyists already have filed suit, but a judge tossed it and told the lobbyists to wait and see if the measure passes before challenging it, he said.
The UGLY: If Proposition 15 passes but a judge strikes down the lobbyist fees that fund most of it, the Legislature will have to choose whether to appropriate taxpayer money to the public funding experiment.

Proposition 16
Local governments looking to begin selling electricity to their residents and businesses would have to get two-thirds of voters to agree before getting into the electricity business.

The Good: Voters should have a say on how their tax dollars are spent, though they essentially do that by electing council members to represent their interests in such municipal decisions. Pasadena already has its own municipal utility, so it’s basically a non-issue for Crown City voters.
The BAD: The initiative is seen as little more than a way for Pacific Gas & Electric, which put more than $40 million toward the campaign, to kill competition from cities in its Northern California service area, a task the utility has been mostly successful in so far.
The UGLY: While PG&E put many millions of dollars toward the effort to pass Proposition 16, public utilities face the unfair disadvantage of being barred from using public money to oppose the measure, Stern said.

Proposition 17
The Good: When voters in 1988 backed a host of new regulations intended to keep a thumb on California’s then-wild insurance market, they established a mandatory discount on auto insurance for drivers with clean records. But voters were never asked whether drivers should be able to transfer to another insurer discounts based on the length of time they’d been insured with a different carrier. This initiative would make that possible, allowing insurers to increase or decrease premiums based on a motorist’s history of uninterrupted insurance coverage.
The BAD: Funded with millions from Mercury Insurance, Proposition 17 could drive up insurance costs by hundreds of dollars for anyone who does not qualify for a discount, as well as for anyone whose insurance lapses for more than 90 days, says John Van de Kamp, former California attorney general who co-authored the ballot argument against the initiative. “All of those people will pay a penalty even if they have an excellent driving record,” he said.
The UGLY: In the zero-sum game of for-profit insurance, someone is going to have to shoulder the cost of the new discounts insurers would be able to give to new customers, which means many existing customers would likely have to pay higher premiums.

Yegparian: June 8 Primary

June 2nd, 2010

Editorial by Garen Yegparian, THE ARMENIAN WEEKLY

Much of the action and deception in California’s June 8 Primary Election is on the Republican ballot and the five propositions. But read on (or skip) to the end of this piece for the election that has generated the most heat, from an Armenian perspective. This is the year of elections for California’s “constitutional officers,” governor, attorney general, etc.

First let’s get some of the most troublesome elections out of the way. These are non-partisan, but also, they are almost “non-information.” The LA County Superior Court judges! Who knows about them? Unless an organization you trust has studied them (beyond the bar association’s findings regarding their competence), you have no real way of telling who would be good. So, if, like me, you feel compelled to vote, check out the LA Times April 24 edition’s editorials where they list their recommendations and see if they make sense to you.

Other non-partisan elections confront us, and choosing there is a bit less difficult, thanks to some work the LA Times has done. While I don’t share their conclusions, I will avail myself of their research. For California’s superintendent of public instruction, their top three choices are Tom Torlakson, Gloria Romero, and Larry Aceves; choose one of these three. Similarly, for LA county tax assessor, choose either John Noguez or John Wong. Finally, I suggest voting for the LA Unified School District’s proposed $100-per-year-per-parcel assessment, lasting only four years, which appears as Measure E on residents’ ballots to help the schools survive the dire times caused by California’s budget disaster.

The five California-wide propositions on the ballot are real issues this time, even if I don’t support them all.

Here’s what I think…

***

Proposition 13—Yes. This one’s easy. No one’s opposed. It helps make building of all sorts safer by eliminating a disincentive to seismically upgrade them. Currently, if you own a home (or anything else) that isn’t up to modern earthquake-proofing standards, and you decide to fix it, you will trigger a reassessment that will likely increase your property tax by a significant amount. Who wants that? Prop 13 eliminates this obstacle. It’s nice to have such a simple, common sense, constitutional amendment that the otherwise much vilified legislature has put on the ballot to improve things for all concerned. Vote Yes!

Proposition 14—No. This ballot measure is a rehash of something that has come up at least once before, in the mid 1990’s. It changes the primary election process. Instead of each political party—Democratic, Green, Republican, etc.—getting to choose their own standard bearer for the general election, everyone would get to vote for everyone regardless of party affiliation. Currently, if you’re registered as, say, Peace & Freedom or Libertarian, you vote on the candidates who are running for that party’s nomination in the primary election. Then the winners from each party run against each other in the general (November) election. With the proposed change, the two candidates who get the most votes would run against each other in the general election, regardless of what party they belonged to. So there could be districts where only Republicans appear on the November ballot, and others where only Democrats do. This not only shuts out the minor parties, but reduces the choice people have even between the two major parties. It is an ill-conceived “solution” to the perceived problem of people getting elected to office who are too ideologically strong in one direction or the other. But just like term limits were supposed to help solve Sacramento’s problems and only made things worse, this proposal too will do nothing to solve the real root of the problem—too much money from special interests pouring into campaigns. Also, remember that each political party is a separate organization with a set of principles it stands for as embodied in the party platform. Each party’s members should get to decide who can best represent them without outside interference. With the new system, members of party A might vote for the “weakest” candidate of party B to get elected in the primary so that party A has an easier-to-beat opponent in the general. Here’s another example. The new system is like saying that members of the Ku Klux Klan should be able to vote in the elections of the American Civil Liberties Union, and vice versa. Does that make any sense? Vote No!

Proposition 15—Yes, enthusiastically. This is the best item to appear for a vote in years. For the first time, a publicly financed campaign will be available to a statewide officer: the secretary of state. This is the official who oversees elections, so it is the most important one to have free of outside influences, i.e. campaign donors with agendas that might run contrary to our, the citizenry’s, interests. Also, this is a trial. It would hold for the 2014 and 2018 elections. If we like it, then we can extend it and expand it. And the best part is, the money for these campaigns would come from raising the registration fees on Sacramento lobbyists (who currently pay less than someone who wants a fishing license!). No one will be forced to do this; they can opt in or out. Vote Yes!

Proposition 16—No. This measure is a sneak attack on citizens’ ability to choose who supplies their electricity. Surprise, surprise, it is bankrolled, to the tune of tens of millions of dollars, by Pacific Gas and Electric (PG&E). Can you guess why? They’re afraid of losing business, which is what would happen if municipalities decided to start their own utilities. So what this measure does is make it more difficult for people to choose a public utility by requiring a 2/3 vote to create one. Many of us in the LA area (Burbank, Glendale, LA) enjoy the stable service provided by municipal power authorities. When Enron gamed the system a decade ago, those served by public utilities did not suffer. PG&E wants to deny others this option as a viable alternative by deceptively advertising this ballot measure as a “right to vote,” when we already have that right. It just locks in PG&E’s effective monopoly on supplying power in the areas it serves. Don’t be fooled by the millions spent to support this deceit. Vote No!

Proposition 17—No. This measure is another corporate bait-and-switch. Under the guise of “helping” car insurance payers, what it does is help the bottom line of its main proponent, Mercury Insurance. It does one good thing, allowing insurance companies to give a discount to people switching from one insurance company to another, currently forbidden by the law. But, it also allows several other increases to be charged by insurance companies. For instance, if you terminate you coverage for any reason, no matter how sensible—moving out of state, serving in the military, being injured and not driving, etc.—when you go to restore coverage, all your years of previous coverage will not count towards a lower premium the way they do now. If Mercury Insurance was serious about its “benevolence,” it would have proposed changing only the prohibition against giving the discount. Along the way, this proposition also overturns parts of the original law passed by Californians in 1988 to protect against abusive insurance practices. Imagine that two previous California insurance commissioners have come out against this! Vote No!

Consumer Report: Insurance Industry Spending Over $17 Million to Influence Outcome of June 8th Election

June 2nd, 2010

NEWS RELEASE

Contact: Doug Heller, 310-392-0522, ext. 309

Santa Monica, CA — Insurers and the political action committees they fund have spent more than $17 million dollars on candidates and one ballot initiative to quietly influence the outcome of Tuesday’s election, according to a new analysis released today by Campaign for Consumer Rights.  The consumer group noted that voters are unlikely to know from the populist-sounding names of the insurance company-funded committees and front-groups that insurers are spending millions to win their agenda.

Los Angeles and San Diego voters are the primary targets of the industry’s stealth independent expenditure efforts to win legislative races.  Insurer-backed groups have spent more than $600,000 against one Assembly candidate in Los Angeles’s South Bay — Betsy Butler in Assembly District 53 — and more than $1.47 million  against one San Diego State Senate candidate — Mary Salas in Senate District 40 — and for her opponent Juan Vargas.

Statewide, the largest insurance company expenditure is the $14.9 million that California’s 3rd largest auto insurer, Mercury Insurance, has spent to pass Proposition 17, which would legalize surcharges on consumers outlawed since 1988.

“Insurers are spending millions of dollars to influence the outcome of Tuesday’s election, but most voters don’t know insurance companies are out there propping up initiatives and attacking candidates,” said consumer advocate Doug Heller, who prepared the analysis.

Consumer advocates said that the insurance funded groups are campaigning under names that would not lead most voters to believe that the mailers, phone calls and TV ads are actually paid for by the insurance industry.

The Mercury Insurance campaign for Prop 17 has been operating under the moniker “Californians for Fair Auto Insurance Rates.”  The insurance industry dominated Civil Justice Association of California (CJAC) has funded three separate campaign committees.  Two medical malpractice insurance company-funded committees have also spent hundreds of thousands of dollars campaigning for and against candidates for the state legislature.

These are the major insurance industry campaigns impacting the June election (a breakdown of spending in each district is also below):

Yes On 17-Californians For Fair Auto Insurance Rates And Mercury General Corporation And Affiliates
Mercury Insurance — whose corporate parent, Mercury General Corporation doesn’t have “insurance” in its name, but is the entity referenced in mandatory advertising disclosures — has funded 99% of Yes on 17’s campaign.  Prop 17 would penalize Californians who opt to stop driving for a time, for virtually any reason.Voters would be required to pay up to a $1,000 more dollars a year for auto insurance when they sought to restart coverage.

Civil Justice Association of California (CJAC)
CJAC, whose board of directors has substantially more insurance representation than any other industry, has three separate political committees that have spent a combined $1.75 million on just three California primary races:

* “Put California Back To Work Sponsored By The Civil Justice Association Of California” has spent about $1,267,000 combined in Assembly District 53 (all against candidate Betsy Butler) and Senate District 40 (in support of candidate Juan Vargas and against Assemblywoman Mary Salas).  Prop 17 sponsor Mercury Insurance is the largest individual corporate donor to this committee, having given $50,000 to “Put California Back.”

* “Californians For Balance And Fairness In The Civil Justice System, Sponsored By The Civil Justice Association Of California” has spent about $422,000 in Assembly District 53 (all against candidate Betsy Butler), Assembly District 30 (all against candidate Fran Florez) and Senate District 40 (in support of candidate Juan Vargas).

* “Californians For Civil Justice Reform Pac, Sponsored By The Civil Justice Association Of California” has spent more than $62,000 in Assembly District 53 (all against candidate Betsy Butler) and Senate District 40 (in support of candidate Juan Vargas).

Medical Malpractice Insurance Companies
Medical malpractice insurance companies have been very aggressive this campaign season.  This segment of the insurance industry is focused on electing candidates who will vote against changes to California’s stringent limits on legal rights for patients injured by medical malpractice.

“Cooperative Of American Physicians Independent Expenditure Committee” is the political action committee of the medical malpractice insurer known as Mutual Protection Trust.  This committee has spent more than $385,000 in Assembly Districts 20 (in support of candidate Garrett Yee) and 53 (against candidate Betsy Butler and in favor of candidate James Lau).

“Californians Allied For Patient Protection Independent Expenditure Account” is the political action committee of CAPP, a group largely funded by medical malpractice insurance companies that focuses on the state’s malpractice laws.  It has spent more than $317,000 in Assembly Districts 20 (in support of candidate Garrett Yee and in opposition to candidate Bob Wieckowski) and 53 (all against candidate Betsy Butler).

“It’s not enough that insurance companies charge us an arm and a leg at every turn. They want more. Insurers are moving millions into California campaigns in order to return many times their investment back into their coffers through preferable legislation and initiative results,” said Heller.

Below is a breakdown of insurance funded independent expenditures by legislative race:

Senate District 40 – In Support of Juan Vargas
$917,000 – Put California Back to Work Sponsored By The Civil Justice Association Of California
$164,000 – Californians For Balance And Fairness In The Civil Justice System, Sponsored By The Civil Justice Association Of California
$43,000 – Californians For Civil Justice Reform Pac, Sponsored By The Civil Justice Association Of California

Senate District 40 – In Opposition to Mary Salas
$343,000 – Put California Back to Work Sponsored By The Civil Justice Association Of California

Assembly District 53 – In Opposition to Betsy Butler
$165,000 – Put California Back to Work Sponsored By The Civil Justice Association Of California
$16,500- Californians For Balance And Fairness In The Civil Justice System, Sponsored By The Civil Justice Association Of California
$19,000 – Californians For Civil Justice Reform Pac, Sponsored By The Civil Justice Association Of California
$221,000 – Cooperative Of American Physicians Independent Expenditure Committee
$186,000 – Californians Allied For Patient Protection Independent Expenditure Account

Assembly District 53 – In Support of James Lau
$39,000 – Cooperative Of American Physicians Independent Expenditure Committee

Assembly District 30 – In Opposition to Fran Florez
$81,500 – Californians For Balance And Fairness In The Civil Justice System, Sponsored By The Civil Justice Association Of California

Assembly District 20 – In Support of Garrett Yee
$125,000 – Cooperative Of American Physicians Independent Expenditure Committee
$161,000 – Californians Allied For Patient Protection Independent Expenditure Account

Assembly District 20 – In Opposition to Bob Wieckowski
$8,000 – Californians Allied For Patient Protection Independent Expenditure Account

- 30 -

Campaign for Consumer Rights is the campaign affiliate of the nonprofit Consumer Watchdog and the sponsor of Stop Prop 17  - http://www.StopProp17.org.

California Propositions

June 1st, 2010

By Kevin Drum, MOTHER JONES

This is a special post for California readers. The rest of you may safely ignore it.

There are five initiatives on the California ballot next Tuesday. As longtime readers know, my default position is to very strongly oppose all initiatives (reasons here [1]), so keep this bias in mind as you read this. For what it’s worth, though, the only ballot measure this bias might affect even slightly this year is Prop 14. The other two NO votes are completely solid regardless of what you think about initiatives in general.

  1. Seismic retrofits: [2] YES. The original Proposition 13, passed in 1978, froze annual property reassessments for existing buildings. New construction was supposed to be assessed at the time it was finished, but in 1984 Proposition 23 created a 15-year exemption for seismic retrofits of “unreinforced masonry buildings.” In 1990, Proposition 127 exempted seismic retrofits entirely but didn’t remove the 15-year limit for unreinforced masonry buildings. I have no idea why, and the [3]five minutes of googling I was willing to apply to this question didn’t provide an answer.This year’s Proposition 13 (it’s just a coincidence that it has the same number as the original) would exempt all seismic retrofits completely. It was approved unanimously by one of the most famously partisan legislatures in the country and the voter guide doesn’t even have an argument against it — which is pretty remarkable given that even the most innocuous initiatives usually prompt an argument from at least one wingnut group or another. So go ahead and vote for this. It seems harmless.
  2. Open Primaries: [4] NO. This initiative would create an open primary system: instead of separate primaries for Republicans and Democrats, there would be only a single comprehensive primary and the top two vote getters would proceed to the general election even if they’re from the same party. Supposedly this would produce more moderate candidates — though the evidence for this is pretty slim — but even if it did, I’ve always been pretty uneasy about open primaries. If political parties are to have any meaning at all, they have to be allowed to pick their own candidates and they have to be allowed to contest general elections. This is especially true for third parties, which would be shut out of general elections almost entirely by Prop 14. It should also be clear at all times which party a candidate belongs to, something Prop 14 obscures by allowing candidates not to declare a party. For all its flaws, the current system strikes me as fairer and more transparent than Prop 14’s pseudo-runoff system.
  3. Fair Elections Act: [5] YES. This is sort of an interesting little initiative. Basically it’s an experiment in public financing of political campaigns: it applies only to one office — Secretary of State — and only to the elections in 2014 and 2018. On January 1st of the following year it automatically disappears for good unless voters decide they like it and want to extend it. It’s funded by a tax on lobbyists and requires candidates to raise $5 from 7,500 registered voters in order to qualify for public funding. This might or might not be a good idea, but Prop 15 is the kind of thing we should do more often: experiment. If Prop 15 fails, not much harm is done. If it works, it will have proven itself in the toughest arena of all: real life. It’s a small bore way of allowing voters to find out if they like the idea before committing themselves to a sweeping and permanent change. We could use more initiatives like this.
  4. Municipal Power: [6] NO. This is one of the sleaziest initiatives I’ve seen in a long time. Here it is in a nutshell: PG&E doesn’t like having to compete against municipal power companies, so they’re sponsoring an initiative that would prohibit the creation or expansion of any municipal power system without a two-thirds approval from voters. Which, of course, is essentially impossible. And the best part? Municipal agencies aren’t allowed to spend public money on political campaigns, so PG&E, which has spent nearly $50 million so far promoting Prop 16, is basically running unopposed.Prop 16 is a poster child for everything that’s wrong with the initiative process in California, and it’s as pure an example as you’ll ever find of a big corporation using the ballot box to cynically undercut its competition. Even if there’s nothing else on the June ballot you care about, you should make sure to get to your polling place just to vote against Prop 16. Ditto for your family and friends. Your enemies too. Liberals, conservatives, Democrats, Republicans, it doesn’t matter: everyone should vote against Prop 16.
  5. Auto Insurance: [7] NO. Most auto insurance companies give you a loyalty discount if you stick with them for several years in a row. Proposition 17 is framed as fixing a “flaw” in California law that prevents you from taking this discount with you when you switch insurers, but that masks the real issue at stake here: should insurance companies be allowed to give you a discount merely for being insured continuously? Or, put another way: Should insurance companies be allowed to penalize you if you drop your insurance for a period of time (perhaps because you sell your car, or sign up for hitch in the Army, for example) and then later re-apply?Proposition 103, passed in 1988, was designed to stop insurers from basing their rates on factors unrelated to the likelihood of filing a claim (where you live, for example, or your income). To accomplish this, Prop 103 mandates that insurers consider only three factors: your driving record, the number of miles you drive, and the number of years of driving experience you have. The insurance commissioner can approve other factors as well, but only if they bear a substantial relationship to the risk of loss.

    Continuous coverage doesn’t qualify on that score. This isn’t a flaw in the law, it’s the whole point of the law. (Loyalty discounts are a little questionable on this score too, but it turns out that they do correlate with driving safety, so they’re allowed.) Mercury Insurance, which has been fighting this battle for years, is pretty much the sole sponsor of Proposition 17, and their motivation is simple: they think it would help them poach more business from other insurers. And it might! But it would do so by lowering rates for some and raising them for others based on a factor that has nothing to do with the likelihood of filing a claim. We decided to put a stop to that two decades ago, and I don’t see any reason to change it now.


Links:
[1] http://www.washingtonmonthly.com/archives/individual/2004_09/004787.php
[2] http://voterguide.sos.ca.gov/pdf/english/13-title-summ-analysis.pdf
[3] http://voterguide.sos.ca.gov/pdf/english/
[4] http://voterguide.sos.ca.gov/pdf/english/14-title-summ-analysis.pdf
[5] http://voterguide.sos.ca.gov/pdf/english/15-title-summ-analysis.pdf
[6] http://voterguide.sos.ca.gov/pdf/english/16-title-summ-analysis.pdf
[7] http://voterguide.sos.ca.gov/pdf/english/17-title-summ-analysis.pdf

Propositions 16 and 17: Welcome to the Corpocracy

May 30th, 2010

By Paul Tullis, TRUE/SLANT BLOG

On June 8, Californians will vote on a couple of exceptional propositions that are the first attempts in decades by corporations to use the ballot initiative process to change the law in their favor.

California’s ballot initiative system was implemented during the Progressive era to enable citizens to amend the state constitution without going through the legislature (though the legislature can also put initiatives on the ballot). The idea was to provide the citizens with a method of protecting themselves from well-funded special interests lobbying the legislature by providing them with their own direct avenue to lawmaking.

Its ironic, therefore, that the system should become a means by which well-funded special interests circumvent the legislature because they know that a well-informed professional lawmaker would never buy the line of bullshit now being propagated by an ad campaign paid for by the states largest private utility, PG&E.

Prop 16, the Taxpayers Right to Vote Act, would require a 2/3 majority in a voter referendum to create or expand any municipally-owned utility, which in most of the state would mean competing with Pacific Gas & Electric or shutting it out of a potential market. PG&E is the measure’s sole sponsor, and has spent $35 million pressing for passage. (The company told shareholders to expect a short-term decline in share price as a result of the expenditure.)

Nearly every city, town, county, consumer group, environmental group, and newspaper in the state opposes the measure, along with AARP, the League of Women Voters and even another large private utility, San Diego’s Metropolitan Water District.

“This is a for-profit corporation trying to kill off its not-for-profit rivals,” said San Francisco Supervisor Ross Mirkarimi told the SF Chronicle. Prop. 16 is a colossal fraud perpetrated on the people of California.

PG&E wants to hike rates because it spent a lot of money on dirty-energy infrastructure just before California passed its Renewable Portfolio Standard, requiring the state to get 20% of its energy from fossil-fuel-free sources by the end of this year. Its ad dollars have shouted down proposals to create public utilities in the past”and those only needed a bare majority to pass. Experts say the 2/3 requirement, which is a major factor in the annual disaster in California known as the state budget, would effectively doom any future proposal”and with it efforts to accelerate the transition to green energy.

Prop. 17 got on the June 8 ballot through a $3.5 million signature-gathering campaign by Mercury Insurance Co. The company has been accused of illegally discriminating against some applicants, but Prop. 17 would make such behavior OK, and roll back many other consumer protections. California’s Insurance Commissioner (yes, since 1991 California has had a statewide elected official with this title), a Republican, has written of Mercury’s lengthy history of serious misconduct [and] contempt toward and/or abuse of its customers.

Nothing like these initiatives has been tried since 1988, when the law which Prop 17 is attempting to overturn was enacted. That November, there were 4 competing insurance-related initiatives on the ballot, one of which was backed by an insurance company that spent over 90% of the money in support of it. Because there were 4 competing initiatives, and it was a November Congressional election with high turnout, the initiatives got a ton of press coverage and a consumer-friendly one that Ralph Nader supported won the day.

Ever since, I was told by Eric McGhee, an expert on voter initiatives at the Public Policy Institute of California, companies have been discouraged by the experience from using the ballot-initiative process and have instead mainly spent their political-influence money on lobbying and campaign contributions. McGhee says they largely prefer lobbying because its more likely to get them the specific break in the law that they’re seeking. (Of course, Props 16 & 17 will get them a specific break in the law, too.)

This isn’t to say corporations have stayed out of initiative campaigns, but its usually been on the No side, to stop a proposition that goes against their interests. With 16 & 17, the companies are pro-actively seeking to change the law in their favor in a way that’s exceptional.

Bruce Cain, a poly-sci prof at Berkeley who’s on the California Fair Practices Commission, which interprets federal law as it applies to elections in California, told me the measures will fail only if voters are paying attention [and] there is enough money on the no side.

So far the latter question is a definite no: PG&E is outspending the No’s by more than 1000:1 (yes, one thousand to one.) As for the former, well just have to wait and see on June 8; the fact that a proposal to write an article similar to the one you are now reading was turned down by The New Republic, The Nation, Mother Jones and The Nation may not bode well for a well-informed electorate.

The failure in ‘88 discouraged companies from using ballot initiatives to push their agendas for a generation. But someone at one of the groups opposing the measures told me that the PG&E attempt is the most brazen attempt he’s ever seen.

If PG&E &/or Mercury are successful, it could have as strong an influence as ‘88 did, but in the opposite direction, unleashing corporate money into the initiative arena like never before.