Posts Tagged ‘overcharges’

California Voters to Choose Party Nominees, Decide Fate of Auto Insurance Proposition

June 7th, 2010

By Sean P. Carr, BESTWIRE

SACRAMENTO, Calif. — When they go to the polls June 8, California voters will decide whether Insurance Commissioner Steve Poizner gets a shot to be governor, will choose the candidates to replace him and will determine the fate of a controversial automobile insurance ballot question. San Francisco voters will also vote on a bond measure to help the city prepare for future earthquakes.

The primary election will mark the beginning of the end of Poizner’s leadership of the Department of Insurance. The first-term commissioner and former entrepreneur is battling former eBay Chief Executive Officer Meg Whitman for the Republican nomination for governor. Both candidates are largely self-funded, with Poizner’s nearly $25 million overshadowed by Whitman’s $71 million contribution in her own behalf. The winner will face Democrat Jerry Brown, the current state attorney general and former governor.

Republican Assemblyman Mike Villines is running for his party’s nomination against insurance department enforcement attorney Brian FitzGerald. The term-limited lawmaker is a former Assembly Republican leader. He said he would focus on improving the speed-to-market of insurance products. Villines said he would serve his full term, and another if re-elected (BestWire, March 31, 2010).

But first he has to get by FitzGerald, a 16-year civil service employee who has pledged to spend no more than $5,000 on his campaign. FitzGerald said he would make laws and regulations, rather than political ambition and public policy agendas, the focus of his tenure. Without criticizing Poizner in particular, FitzGerald said he wants “to take the commissioner’s office out of play” when it comes to politics. Implementing aspects of the federal health care reform law will be a top priority of the next commissioner, he said.

Democratic Assemblymen Dave Jones and Hector De La Torre are touting their respective endorsements. Jones won the backing of the state Democratic party and teachers’ unions (BestWire, April 21, 2010). In the Assembly, Jones is seeking to extend the state’s Low Cost Automobile Insurance Program. As then-chairman of the Assembly Health Committee, Jones held a public hearing on Anthem Blue Cross’ plan to raise rates an average of 25% for holders of individual policies (BestWire, Feb. 16, 2010). Jones has topped De La Torre in fund-raising, $1.4 million to $465,000.

De La Torre has championed a bill to end rescissions and other health insurance measures. He has campaigned on stepping up penalties and enforcement actions for insurance companies and to accelerate the implementation of health reform. De La Torre has the backing of the Service Employees International Union and the California Nurses Association.

Proposition 17

Proposition 17 would allow insurance companies to lower premiums for drivers who have continuously maintained auto insurance coverage, even if they switch to a different insurer. Mercury General Corp. is funding virtually the entire Yes on 17 – Californians for Fair Auto Insurance Rates campaign, with donations of more than $14.9 million. The campaign has out-raised opponents of the ballot measure by nearly 15-to-one. Mercury Insurance Co. (NYSE: MCY), a member of Mercury General Group, currently has a Best’s Financial Strength Rating of A+ (Superior).

Proposition 17 is about consumer choice and market competition, not Mercury’s dollars, said Mike D’Arelli, executive director of Alliance of Insurance Agents & Brokers and a spokesman for Yes on 17. “People should be encouraged to shop, not punished for shopping,” he said.

The effect would be to legalize surcharges on consumers outlawed since Proposition 103 in 1988, said Doug Heller of the Campaign for Consumer Rights, an affiliate of Consumer Watchdog. According to opponents, because those with lapses in payments may be disqualified from any discounts, the initiative would allow companies to charge customers more for not having had auto insurance coverage in the past.

“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,” he said in a statement.

Earthquake Safety Bond

San Francisco’s Proposition B is a $412 million bond measure that would fund improvements to a system of cisterns and pumping stations so that firefighters have access to water supplies and pressure in the event of another major earthquake. It would also improve facilities for police, fire and water delivery services. The city’s major political parties, labor unions and business groups have endorsed the measure.

sean.carr@ambest.com

Candidates Blitz State in Final Push for Votes

June 7th, 2010

By Carla Marinucci, THE SAN FRANCISCO CHRONICLE

In a last weekend of frenzied campaigning before the June 8 primary, candidates for statewide office marshaled last-minute ads, attacks – even visits from Karl Rove and a fictional “Queen Meg” – to appeal to voters in what’s been a record-breaking season of political spending.

GOP billionaire and former eBay CEO Meg Whitman, who has spent a stunning $81 million on her gubernatorial primary effort, dropped a few more dollars Sunday by offering free barbecue and live music to supporters who showed up at rallies in Madera and Sacramento.

Whitman, boosted in recent polls suggesting she’s got a 2-to-1 lead over State Insurance Commissioner Steve Poizner, was accompanied by former Gov. Pete Wilson at the rallies.

But Whitman was dogged at both locations by colorful protesters from the California Nurses Association hoping to remind voters of her pricey run.

The nurses staged a parade starring a fictional “Queen Meg,” complete with crown, royal chariot, and retinue including “Lord Romney” (a dig at Whitman supporter Mitt Romney). They also put up ads on Spanish-language media regarding Whitman’s connections with Wilson, an unpopular figure among Latino voters for his support of the controversial anti-illegal immigration measure Proposition 187.

Poizner hit a town hall meeting in Riverside on Saturday and a Christian church in Norwalk on Sunday to talk up immigration enforcement and continue to keep the heat on Whitman.

On the Democratic side, Attorney General Jerry Brown appeared eager to draw a contrast to Whitman in an opinion piece in the San Diego Union Tribune. He argued he would be a governor who relies on frugality, and is best positioned to get the state’s problems under control because he knows the legislature’s “history and its governing structure.”

In the race for the U.S. Senate seat now held by Democrat Barbara Boxer, former Hewlett-Packard CEO Carly Fiorina – who appears to have the momentum in a contentious Republican primary – hit a phone bank in San Luis Obispo to encourage supporters.

“We must fire Barbara Boxer in November, and I am the only candidate in this race positioned to do so,” said Fiorina.

Rove helps DeVore

But another GOP challenger, Assemblyman Chuck DeVore of Irvine, got help from former Bush White House adviser Karl Rove at a Jewish Republican dinner in Los Angeles on Sunday.

The third GOP candidate seeking the nomination, former South Bay Rep. Tom Campbell, held one of his signature tele-town hall meetings Sunday, arguing he’s earned every major newspaper endorsement in the contest and is the only Republican shown in polls to beat Boxer in a head-to-head race.

In the Democratic race for attorney general, the campaign of candidate Chris Kelly, the former Facebook privacy officer, filed a complaint Sunday against the PowerPAC.org Voter Fund. Kelly’s campaign alleged the group violated the election law of making an independent expenditure by purchasing $140,000 in radio ads on behalf of San Francisco District Attorney Kamala Harris.

Harris campaign spokesman Brian Brokaw charged last week that Kelly, who has donated $12 million toward his own campaign, is a “panicking candidate” who has resorted to increasingly desperate attacks.

Drives against initiatives

Two initiatives backed by expensive corporate efforts were also the focus of last-minute vote drives.

A leading consumer advocate charged Prop. 17’s chief sponsor, Mercury Insurance, of fraudulently suggesting in recent mailers that the Consumer Coalition of California backs the measure.

That coalition is “run by a Texas woman, Virginia Jarrow, who has repeatedly sided with industry,” said Harvey Rosenfield, founder of Consumer Watchdog, who also said Mercury failed to identify itself as an insurance firm in mailers as mandated by law.

Kathy Fairbanks, who heads the pro-Prop. 17 group, said the Consumer Watchdog allegations are “completely unfounded” and evidence of the group’s desperation in the final days of the campaign.

Mercury says the measure will allow consumers to get “continuous coverage” auto insurance discounts when they change companies, but Consumer Watchdog argues it will allow surcharges for tens of thousands of Californians, such as students and military personnel, who haven’t maintained continuous insurance.

Also Sunday, opponents of Prop. 16, a ballot measure funded by Pacific Gas and Electric Co., scored their biggest endorsement to date – House Speaker Nancy Pelosi.

The most powerful woman in American politics urged Californians to reject the measure, which would require cities and counties to win the approval of two-thirds of their voters before spending public funds to enter the electricity business.

“Proposition 16 would make it more difficult for communities to choose more renewable energy through public power,” she said in a statement.

E-mail Carla Marinucci at cmarinucci@sfchronicle.com. Chronicle staff writer David R. Baker contributed to this report.

‘Democracy Hijacked’ as California Goes to Polls

June 6th, 2010

By Staff Writers, AGENCE FRANCE PRESSE

LOS ANGELES, CA — The free-spending role of corporations in California’s electoral system has come under fire as the state prepares to vote on two referenda which opponents have condemned as a “hijacking” of democracy.

Whether its a bid to legalize marijuana or ban same-sex marriage, single-issue referenda, known in California as ballot initiatives, are part of the fabric of the state’s political scene.

But two ballot measures being presented to voters at Tuesday’s June 8 primaries have raised questions about an electoral system which allows corporations to bankroll campaigns with millions of dollars.

The highest profile initiative — Proposition 16 — is backed and financed by Pacific Gas and Electric, the private, for-profit electric company which supplies energy to nearly two thirds of northern California.

Proposition 16 would require any city or county in the state seeking to start its own municipal utility to get approval from two thirds of its voters.

Opponents of the initiative say that if approved it will give PG&E and other existing companies a virtual monopoly, locking out potential public sector rivals in perpetuity.

“I think it’s outrageous that a regulated company could decide to write its own business advantage into the state Constitution,” John Geesman, a former member of the California Energy Commission, told the Los Angeles Times.

So far PG&E has spent an estimated 46 million dollars on its campaign, blitzing local television, radio and newspapers with hard-hitting ads touting the measure as the “Taxpayers Right to Vote.”

Opponents however are hamstrung because the law forbids municipal power providers from spending any money on electioneering. The “No on 16″ campaign is staffed exclusively by volunteers and has so far raised only 80,000 dollars.

“The initiative process originated with the idea that ordinary voters could bring forth issues of importance to them and it’s pretty much been hijacked by wealthy corporations,” said “No on 16″ spokeswoman Mindy Spratt.

“We have far more public support, far more endorsements, far more volunteers. But the challenge is getting our message out against a 46 million dollar ad campaign that has blanketed the entire state.

“PG&E has obviously calculated ‘If you can buy a Governor’s Mansion, you might as well try and buy a part of the constitution.’”

The other ballot measure being decided Tuesday, Proposition 17, is being funded by Mercury Insurance, which has spent more than 15 million dollars on the campaign. Supporters say the measure is designed to allow drivers to keep loyalty discounts even if if they switch insurance companies.

Opponents say Proposition 17 will allow insurance companies to raise rates by imposing premium surcharges that are currently illegal.

“When was the last time an insurance company spent millions to save you money?,” the “Stop Prop 17″ campaign asks on its website.

Experts say that while corporations attempting to influence politics is nothing new, the sums of money being spent by backers of the two California measures in Tuesday’s election are unprecedented.

John Matsusaka, a leading authority on ballot initiatives who heads the Initiative And Referendum Institute at the University of Southern California, described the PG&E-financed campaign as “staggering.”

“Corporations have been involved in initiatives since the very beginning. It’s not new. But the amount of money being spent is,” Matsusaka told AFP.

“PG&E has spent something like 45 million dollars now. That’s staggering. Huge. That is a completely new thing.”

Matsusaka noted however that corporations were not alone in trying to buy influence at the ballot box, where public sector unions and wealthy individuals have often mounted similar campaigns in the past.

“What I do think is of concern though is the imbalance between the two sides,” Matsusaka said. “The direct democracy process was set up in the belief that the voters are competent to make choices.

“But in order for them to make choices they need to hear both sides of the argument. What’s troubling about this campaign is that only one side of the argument is being heard.”

Cash is King as Primary Election Campaign Spending Soars

June 6th, 2010

By Timm Herdt, THE VENTURA COUNTY STAR

Stan Statham is a former California lawmaker who for the past 15 years has been president of the California Broadcasters Association, the trade group that represents television stations. About this time of year, he regrets that most of his neighbors know what he does for a living.

“Wherever I go,” he said, “my neighbors say, ‘Stop with the political ads already!’ ”

It’s been one of those springs in California.

Political ads have floated over the airwaves like pollen during a record-breaking primary election campaign in which billionaire Meg Whitman, multimillionaires Steve Poizner and Carly Fiorina, Fortune 500 company Pacific Gas & Electric, insurance giant Mercury and former Facebook attorney Chris Kelly have combined to spend $171 million, the bulk of it on television ads.

The spending spree ends – or at least pauses – on Tuesday, when those Californians who haven’t already voted by mail go to the polls.

Those who do vote at the polls will likely be in the minority in Ventura County. Assistant Registrar of Voters Tracy Saucedo said Friday that pre-election activity this spring closely resembles that which preceded the May 2009 statewide special election, in which 62.4 percent of ballots cast in the county were by mail.

Of the county’s 422,143 voters, 172,591 received mail-in ballots last month. Through midday Friday, 50,498 had been returned.

Low turnout expected

Turnout is expected to be relatively light, as is typical in primaries, even though numerous issues are at stake both statewide and locally. Saucedo said the return rate of mail-in ballots, which was very slow at first, picked up late last week, and she expects a turnout similar to that of the May 2009 election (31.5 percent), or the last gubernatorial primary in June 2006 (33.3 percent).

“It looks like it’s going to be in the low 30s, but who knows?” Saucedo said.

In California, Republicans will choose challengers to take on presumptive Democratic gubernatorial nominee Jerry Brown and incumbent U.S. Sen. Barbara Boxer in the fall. Voters in both parties will decide multiple contested races for lesser statewide offices, including wide-open races for attorney general in both parties.

In Ventura County, voters will pick a new sheriff and clerk-recorder and select two finalists from a long list of candidates for treasurer-tax collector if no one gets more than 50 percent of the vote. They will also decide whether two incumbent county supervisors will return for another term.

In partisan races, there are contested primaries among Democrats to select a challenger for Rep. Elton Gallegly in the fall, and among Republicans to select a challenger for Rep. Lois Capps.

By far the highest-profile local partisan race is in Ventura and Oxnard’s 35th Assembly District, where Democrats Susan Jordan and Das Williams have combined to spend nearly $1 million in their contest for the nomination.

Record-breaking spending

Across the state, voters will decide on five ballot propositions, including one that would radically change how primary elections are conducted in the future.

The spotlight across California will be on the Republican contest for governor, which has spawned a record-breaking spending race between Whitman, the former eBay CEO, and Insurance Commissioner Steve Poizner. They are the latest to join a long list of wealthy California candidates to significantly self-fund campaigns for governor or senator (18 since the early 1960s, according to a count compiled by the San Diego Union-Tribune).

All but one has failed, with Gov. Arnold Schwarzenegger being the sole exception.

Whitman has already shattered the spending record, having put $68 million of her own money into the campaign so far. Poizner, who made a fortune selling GPS technology he helped develop for cell phones, has put in $24 million.

“In other states, that could be the whole state budget,” said Sherry Bebitch Jeffe, a senior fellow at USC’s School of Policy, Planning and Development. “Money, media and message – those three things have always been the driving force of politics. It’s not enough to have money. You’ve got to use the media well, and you have to have a message that resonates with voters.”

The most recent pre-election polls suggest Whitman has been getting the most for her money. A Field Poll released Friday showed her leading Poizner by 26 percentage points.

“She got a lot for her money,” Jeffe said. “She became a credible candidate, and she got to even with Jerry Brown in the polls. If she wins, then will come the real thing.”

Whitman and Poizner have been engaged in a weeks-long battle of negative advertising, with Poizner hammering on conservative themes and forcing Whitman to answer back.

One result has been that Whitman has lost ground in the polls to Brown, who faces only nominal opposition in the Democratic primary. “She did have to move further to the right than she wanted to,” Jeffe said.

Brown, the current attorney general, is hoping to return to the office he held from 1974 to 1982.

The other big-ticket contest is the three-way race for the Republican nomination for the U.S. Senate, for the right to take on Boxer in the fall. That race appears both tighter and more fluid than the governor’s contest, although recent polls indicate that former Hewlett-Packard CEO Fiorina has opened a slight lead over former Congressman Tom Campbell and Assemblyman Chuck DeVore.

At the county level, most eyes will be on the District 2 contest for supervisor, which pits two longtime local Republican officeholders against each other: Linda Parks, seeking a third term, and Assemblywoman Audra Strickland, who is being termed out of the Assembly.

Money has also played a significant role in that race, as the county Republican Party has spent about $300,000 to promote Strickland and attack Parks.

Another high-profile local contest is the race for sheriff, the first contested campaign for that office in almost 40 years. It features two high-ranking officers from within the department, Cmdr. Geoff Dean and Chief Deputy Dennis Carpenter. They seek to replace Sheriff Bob Brooks, who is stepping down.

Lopsided measure funding

On the statewide ballot, the focus on the five propositions has centered largely on two being funded almost entirely by single business interests.

Proposition 16 would make it much harder for local governments to form either public power agencies or community electricity-purchasing collectives, by forcing then to first put the issue on the ballot and receive approval from two-thirds of voters.

It is sponsored by Pacific Gas & Electric, which has spent $46 million to promote the measure. Opponents have raised $98,000.

Proposition 17, sponsored by Mercury Insurance, would change state law to allow insurers to offer discounts to new customers who have at least a five-year, uninterrupted history of coverage with other companies. Mercury has spent $16 million to promote its initiative. Opponents, who say the measure will cause insurance premiums to rise for many motorists, have raised $1.5 million.

Despite the one-sided spending, history shows both measures could face tough going.

“Evidence suggests that if the public figures out that an initiative is sponsored by one group, they reject it,” said Ted Lascher, director of the Serna Center of public policy studies at Sacramento State University. “The default position of most voters is to vote no.”

Proposition 14

The most politically significant measure on Tuesday’s ballot is Proposition 14, which would create a “top-two” primary system for future elections. Under the proposed system, all voters in a primary could chose from among all candidates, whose party preferences would be listed on a single ballot. The top two finishers would advance to the general election, regardless of their party affiliations.

Again, proponents have outspent opponents by a sizeable margin, $5.1 million to $244,500. Activists from both major parties, as well as from the minor parties, are strongly opposed.

There will likely be a number of tight races in both parties in the so-called “down ticket” races for state offices. Two of those feature legislators who represent portions of Ventura County: Sen. Tony Strickland of Thousand Oaks is pitted against businessman David Evans for the GOP nomination for controller, and Assemblyman Pedro Nava of Santa Barbara is one of seven Democrats seeking the party’s nomination for attorney general.

That crowded Democratic field for attorney general includes Kelly, the other self-funded, multimillionaire candidate on Tuesday’s ballot. Kelly has put $12 million into his campaign.

Contact the author at: therdt@VCStar.com

Vote June 8th

June 6th, 2010

Op Ed by Sharon Byrne, Deputy Director, California Common Cause

Common Cause California is a non-profit, non-partisan citizens’ lobby organization. we believe that by banding together, citizens can make a difference. we throw a spotlight on issues that affect all Californians. we work to strengthen public participation and to ensure that the political process serve the public interest, rather than the special interests.

Our purpose is clear: make public officials and public institutions accountable and responsive to citizens.

With that in mind, voters face 4 ballot propositions June 8th, and need to understand what it is they’re voting for. The following is somewhat abbreviated, to help people understand the ballot propositions as they vote on June 8th. Common Cause has not taken a position on all of these, but where we have, we note it. Voters are encouraged to research these propositions further, and vote on June 8th. Further information on Propositions 14 and 15 can be found on our website at http://www.commoncause.org/ca.

Prop 14 – top Two Primaries Act

This proposal is aimed at reducing partisan gridlock in state government. it was placed on the ballot by the California Legislature as part of the February 2009 budget deal. if passed, Prop 14 would establish a “top-two” primary system for electing California’s statewide constitutional officers, Congressional representatives and U.S. Senators. it would not apply to not to local elections or presidential primaries.

California’s primary system features political parties that nominate candidates through a closed June primary who then appear on a general election ballot in the fall. Prop 14 would eliminate the party primary in favor of a single “voter-nominated primary elections” ballot open to all voters regardless of their registered affiliation. Candidates would choose whether or not to list a party affiliation under their name on the ballot, and all voters would have the option of voting for any candidate. The two candidates with the highest vote totals, regardless of party affiliation, advance to a general election in the fall.

Possible Outcome: Under this process, some districts could see two candidates from the same party appear on their November general election ballot.

Arguments for Prop 14: it has the potential to increase the chance that moderate candidates will survive the primary process. less people vote in the primaries, and those that do vote do so more along extreme party lines than is true in the general election, so officials elected through the current modified closed primary may not reflect moderate majorities in their districts.

The top-two primary could also result in increased primary voter turnout as decline-to-state voters are able to cast primary ballots more easily and more choices on an elector’s ballot and the ability to vote across party lines could lure in voters who traditionally don’t vote in primary elections.

Arguments against Prop 14: Eliminating the partisan primary for the affected offices encroaches on the political party’s right to determine its own future and choose its own nominees. Voters who have little or no interest in the party’s success will have the ability to influence which, if any, of its candidates are advanced to the run-off election. Opponents have even argued that voters could seek to sabotage an opposing political party in their choices.

Since third-party candidates are rarely among the top vote-getters in a primary election, they would likely not appear on many general election ballots and write-in candidates would be prohibited. The consequences of this limitation would be to remove the voices of third-party candidates from the discussion and debate of the fall election, which is the election that a greater number of voters follow and participate in.

California Common Cause has taken a neutral position on Prop 14.

Proposition 15 – California Fair Elections Act

Put on the June 2010 ballot by the legislature and Governor Schwarzenegger to create a pilot project providing voluntary public financing for candidates running for Secretary of State in 2014 and 2018. Its passage will assure voters that the elected official guarding the integrity of elections has no need to raise private campaign contributions. Further, it will pave the way for expanding public financing of other offices in California. The Secretary of State is a key role as it regulates elections in the state. This office, in the state of Florida, was partly responsible for deciding the 2000 presidential election.

To Qualify: Major party candidates for Secretary of State must raise 7,500 five dollar qualifying contributions and signatures from registered California voters to prove that they have a broad base of support.

Fair Elections Candidates Receive: Enough baseline public funds to run competitive primary campaigns ($1,000,000). if they win their primary, they receive enough baseline public funds to run competitive general election campaigns ($1,300,000). these levels are comparable to what winning candidates spent in 2006, but future candidates will have fewer fundraising costs so this will represent more net funding.

Strict Rules for Participating Candidates: Once qualified, Fair Elections Candidates must agree to spending limits and accept no private contributions. they would be prohibited from raising or spending additional money beyond what they receive from the fund. Further, Fair Elections Candidates would be required to participate in two debates during the general election and one during the primary.

Paid for By Registration Fees on Lobbyists and Voluntary Contributions

CFEA will be paid for by voluntary contributions designated on state tax returns and by a registration fee of $350 a year on lobbyists, lobbying firms, and lobbyist employers, the same as in Illinois, raising an estimated $8.0 million over four years. currently California lobbyists only pay $12.50 a year, among the lowest of any state. The Secretary of State is responsible for administering the lobbyist registration program, so it makes sense that elections for this office would be funded in this fashion.

California Common Cause recommends a ‘yes’ vote on Proposition 15. Mayor Helene Schneider supports Prop 15.

Proposition 16 – Taxpayer’s right to Vote Act

The titling of this act is misleading as to its contents. Placed on the ballot by Pacific Gas & Electric (PG&E), it requires a two-thirds vote of the electorate before a public agency could enter the retail power business. This will make it more difficult than it is currently for local entities to form either municipal utilities, or community wide clean electricity districts called Community Choice Aggregators (CCAs).

The CCA program, established in 2002, allows local governments to purchase blocks of power to sell to residents, and to construct municipal electricity generation facilities, which means that cities and counties can become competitors to private utilities. Some cities may wish to engage in forming a utility to provide alternative energy, and this bill would make it harder to so, requiring a 2/3 vote of the electorate.

Pacific Gas & Electric is the primary financial sponsor of the initiative, having contributed $46.1 million through May 25, 2010. Prop 16’s opponents have raised less than $50,000 through mid-May.

California Common Cause has not taken a position on Prop 16.

Proposition 17 “Allows Auto Insurance Companies to Base Their Prices in Part on a Driver’s History of Insurance Coverage. Initiative Statute.”

This will allow insurance companies in the state to give what are known as “persistency discounts” to new customers. “Persistency discounts” are discounts for those who have had continuous or nearly continuous auto insurance coverage. California has 23.7 million licensed drivers who collectively pay billions of dollars in auto insurance premiums. currently 80% of drivers maintain auto insurance and qualify for a persistency discount. A flaw in current law prohibits drivers from taking this continuous coverage discount with them if they switch insurance companies.

About 20% of California’s drivers fall into the category of those who have had lapses in their insurance coverage to the extent that they would not be eligible for the persistency discounts allowed both under current law and Proposition 17.

Mercury Insurance is Proposition 17’s primary sponsor. Through May 28, Mercury Insurance was responsible for about 98% of the funding for the “Yes on 17″ campaign, having contributed $14.6 million.

The Los Angeles Times is urging a “no” voting, saying, “proponents can’t explain away is that insurers will have to offset the expected revenue loss from the new discount by raising rates on the people who don’t qualify for it. By proponents’ estimates, 80% of California drivers qualify for the loyalty discount, which means that the 20% who don’t qualify pay a surcharge. But more than 80% of drivers have been continuously covered by various insurers, so more people will be eligible for the discount – and the fewer people who remain will have to pay for it.

Like Prop 16, voters have to question why a major corporation is funding it, and what they hope to get out of its passage.

California Common Cause has not taken a position on Prop 17.

ELECTION: Corporations Back Propositions 16, 17

June 6th, 2010

Both have sought to be portrayed as “grassroots” efforts

By Eilene Zimmerman, SAN DIEGO BUSINESS.COM

The phrase “more power to the people” has a lot of resonance here in California, where so many of our laws are decided by ballot initiative. This year voters would be justified in feeing a bit manipulated by special interests, as some of the most significant propositions on the ballot are being bankrolled by corporations advancing their own agendas.

No on Prop 17.

Courtesy photo

Proposition 16, for example, called the “Taxpayer’s Right to Vote Act” isn’t actually about voting rights. And although it sounds very grass roots, it’s not. If Prop 16 passes, it will mean that for a local government to get into the energy business—by forming a municipal utility, for example, or a community-wide clean electricity district—they first have to schedule an election and win approval of two-thirds of voters in the area of the proposed utility. The proposition’s main financial sponsor is—surprise, surprise—Pacific Gas & Electric.

The utility company has spent more than $46 million to make this proposition law. Opponents of Prop 16 have raised a paltry $50,000. If the proposition doesn’t pass, it means local governments can continue to startup up or expand electricity service either by approval of a majority of voters or through the action of governing boards. If it does pass, PG&E could give itself a perpetual monopoly in the state.

The energy company is presenting its support of Prop 16 in a very Tea Party light—voters taking control of the public funds their governments spends too easily. Robin Swanson, a spokeswoman for the “Yes On 16” campaign told National Public Radio this month the proposition puts “the power back in the hands of the people.”

She also said PG&E isn’t afraid of competition from publicly owned power providers. “If our opponents can provide cheaper, greener, better electric service, then they shouldn’t b e afraid to go to the people and sell it to them,” she says.

Another corporate entity financing a proposition on Tuesday’s ballot? Mercury Insurance. The company put Prop 17 on the ballot in order to repeal a provision of a voter-approved insurance rate regulation that saved California motorists over $60 billion in excessive insurance rate hikes, according to the Consumer Federation of California. Prop 17 allows auto insurers to raise your premium if you have a break in insurance coverage for three months for any reason, even if you have a great driving record.

Mercury is portraying Prop 17 as “correcting a flaw in the law” that prohibits drivers from taking continuous coverage discounts with them when they switch insurers. The insurance company spent more than $3 million to get the proposition onto the state’s ballot.

Mercury’s CEO George Joseph told Steve Lopez of the L.A. Times that Prop 17 was an effort to offer low car insurance rates for Californians, but a few sentences later admitted he wants more customers, and if discounts become portable, drivers will drop other companies and switch to Mercury because of the company’s cheap rates.

So voters beware. Certain companies (and individuals) stand to benefit mightily if Props 16 and 17 pass. You ought to know that before casting your vote.


Eilene Zimmerman

About the author: Eilene Zimmerman is a journalist based in San Diego who writes about a variety of topics, including business, social and political issues and family life. Her work has been published in national magazines and newspapers including The New York Times, The San Francisco Chronicle, The Christian Science Monitor, FORTUNE Small Business, CNNMoney.com, CBS MoneyWatch.com, Wired, Harper’s, Salon.com, Slate.com, Psychology Today and others. She blogs at www.trueslant.com.

Money and Anger Dominate California’s Top Primary Contests

June 6th, 2010

As GOP bids wind down, personal spending vaults Meg Whitman to front of gubernatorial race and Carly Fiorina into the lead for Senate. All Republican candidates are trying to tap voters’ sour mood.

By Seema Mehta, THE LOS ANGELES TIMES

California Republicans racing Saturday to clinch their party’s nominations tried to ride the frustration of an angry electorate, claiming as they campaigned across the state that they represent their party’s best chance to defeat Democrats who have been in power for decades.

From  corporate executives to conservative activists to career politicians, the GOP  candidates in the top-of-the-ticket races to be decided Tuesday have strikingly different resumes. But the personal wealth employed by several of them has sharply altered the momentum of the races. The Republican governor’s contest is the most expensive California primary in history, and money tilted the standings in the closing weeks of the Senate race.

Despite their differences, the candidates are essentially making the same argument: that they are the most lethal threats to gubernatorial candidate Jerry Brown or incumbent Sen. Barbara Boxer, despite the Democratic Party’s  substantial edge among California voters.

“The common thread is, ‘I’m not part of the establishment,’ ” said Jack Pitney, a Claremont McKenna College government professor and former national GOP official. “They’re all saying they’re a break from politics as usual.”

The Republican gubernatorial and Senate races have drawn the most attention this primary season. Among the Democrats, only token opposition  has emerged to challenge  Brown in the governor’s race and three-term incumbent Boxer in the Senate race. Tuesday’s ballot will also decide party nominations for statewide offices, legislative seats, local measures and a smattering of ballot propositions.

‘Money talks’

Money has played a prominent role in many races. Former Facebook executive Chris Kelly used $12 million of his money to run for the Democratic nomination for attorney general; Pacific Gas & Electric has spent $46 million to support Proposition 16, which would require a two-thirds vote for municipalities trying to get into the electric business; and Mercury Insurance spent $16 million to support Proposition 17, which would alter rules on car insurance.

But nowhere has it held greater sway than in the governor’s race, where Meg Whitman and Steve Poizner had spent a combined $103 million by late May, nearly all of it drawn from their vast personal wealth. That figure is sure to rise by millions once spending from the final two and a half weeks is tallied.

Whitman, a billionaire, has contributed $71 million to her effort. Her spending led Poizner, a multimillionaire who has invested $25 million in his campaign, to accuse Whitman of trying to buy the nomination.

“Money talks,” said Larry Gerston, a political science professor at San Jose State.

Personal funds also played a role in the Senate race, with Carly Fiorina moving into the lead in polls as she spent $5.5 million on her campaign. Her opponents, Tom Campbell and Chuck DeVore, were operating on far smaller budgets.

Bucking politics as usual

Wealthy or not, the GOP candidates are counting on the electorate’s sour mood about incumbents to ease their path.

Democrats Boxer and Brown have a combined 59 years in elective office. The top two races have pivoted around GOP efforts to cast that as a weakness to voters who are dismayed by the economy and question whether politicians in Sacramento and Washington have lost their way.

Whitman, the former EBay chief executive, and Fiorina, the former Hewlett-Packard chief executive, have painted themselves as political outsiders whose corporate know-how will help them reform tangled bureaucracies.

Poizner, the state insurance commissioner, and DeVore, a state Assemblyman, have tried to tap the voter rage typified by the “tea party” movement. And former congressman and academic Campbell has argued that his combination of detailed policy positions, fiscal conservatism and social moderation make him the ideal general-election Republican.

Polls indicate that Whitman and Fiorina’s messages — and the ads fueled by their personal wealth — are resonating. Whitman led Poizner by 24 points in the recent Los Angeles Times/USC poll, and Fiorina led Campbell by 15 points, with DeVore trailing. A Field Poll released Saturday showed DeVore closing in on Campbell.

Pushing forward

On Saturday, the buoyant frontrunners in both races looked ahead to the general election.

Whitman appeared at rallies in Escondido and Fullerton, where she fired at  Brown.

“Jerry Brown was already governor, 35 years ago, and it was not a great run,” she told supporters gathered on a patio surrounded by shops in downtown Fullerton.

Later, she added, “If we elect Jerry Brown as governor of this state, a Democrat with a Democratic Legislature, you will not recognize California. Taxes will be higher, businesses will continue to leave, we will continue to be the welfare state and the truth is we have got to make sure that does not happen.”

Near Sacramento, a confident Fiorina rallied  her troops in the Senate race, thanking them for bypassing the beautiful weather to call voters on her behalf.

“With your help, we’ll be having a hell of a party on Tuesday night,” she said, flashing two thumbs up to about 30 volunteers gathered at a recreation center in Gold River.

Speaking to reporters, she criticized Boxer’s positions on national security, terrorism and immigration. “Her policies are part of what’s driving this state into bankruptcy,” Fiorina said.

The underdogs in both races tried to  persuade supporters that they could see a path to victory.

“We are the underdogs, of course, and we’re being outspent  4 to 1,” Poizner told a group of young volunteers in Santa Ana who had been roped into precinct-walking by a campaign worker’s brother.

But the  gubernatorial hopeful also predicted “some good positive momentum” as late-deciding voters learn of his positions on issues such as Proposition 13 and abortion.

DeVore, meanwhile, said expected low voter turnout and the enthusiasm of his supporters mean he is not out of the running for Senate.

“This low turnout is going to completely upend or overturn all the polls,” he told more than 100 supporters who phoned into a conference call with the candidate. “We will defy expectations.”

The third Senate candidate, Campbell, spent part of Saturday speaking to supporters in Saratoga, near San Jose.

Fierce battles ahead

With their lineup unofficially set,  top-of-the-ticket Democrats and their allies in organized labor were also gearing up Saturday for a bruising general election battle against opponents with unprecedented amounts of personal money to spend.

A sign of the tension going forward occurred at both Whitman events, when protestors were physically removed from the rallies. In Fullerton, protestors were thrown against a wall before being pushed outside an iron gate, which was locked behind them. A Whitman aide described them as “rabble-rousers.”

With the battles brewing, “Boxer and Brown both realize they have real contests and are not going to wait,” Pitney said.

Boxer proved that  Saturday. After touring a new $13.5-million aircraft rescue and firefighting facility at Los Angeles International Airport that was funded mostly by federal stimulus  money,  the senator lashed out at Fiorina. She let fly a host of criticisms: Fiorina laid off tens of thousands of workers and shipped jobs overseas  as head of Hewlett-Packard; she failed to vote for much of her life; she opposes abortion rights and supports offshore drilling — the opposite of most Californians’ views — and would allow people on the no-fly terrorism watch list to purchase handguns.

“This is the clearest choice in the nation,” Boxer said. “She is so out of step with California voters.”

As the primary election  comes down to its final days, radio and television stations are swamped with political ads. Voters hoping for a respite after Tuesday’s primary will be disappointed: A coalition of labor unions plans to start advertising against Whitman the following day.

“For all practical purposes, the general election campaign has already started,” said Dan Schnur, head of the Jesse M. Unruh Institute of Politics at USC. “It doesn’t look like many people on either side are going to be taking summer vacations.”

seema.mehta@latimes.com

Times staff writers Robin Abcarian, Cathleen Decker, Shane Goldmacher and Maeve Reston contributed to this report.

Proposition 17 Won’t ‘Fix’ Anything

June 5th, 2010

Editorial by THE LOS ANGELES TIMES

It claims to address a problem in California’s auto insurance laws. But the problem doesn’t exist.

Give proponents of Proposition 17 credit for chutzpah. Their TV commercials tell voters that there’s “only one place to get the facts about Prop. 17: the official voters guide.” But then they quote from the opinions the Yes on 17 campaign inserted into the guide’s arguments and rebuttals section. No matter what the campaign commercials claim, the measure would not let drivers “take their continuous coverage discounts with them.” Instead, it would create a new type of discount whose magnitude and effect are, at this point, unpredictable.

There is no “continuous coverage” discount today, at least not the way it’s defined in Proposition 17. Instead, there is what amounts to a loyalty discount that most insurers offer to drivers who’ve been their customers for some time. The amount of the discount varies from company to company, as do the requirements to qualify. As per the requirements of Proposition 103, which voters approved in 1988, insurers have to justify the terms of the discount by showing a substantial correlation between customer loyalty and a lower risk of loss. They also have to offset the cost of the discount by imposing surcharges on new customers.

Proposition 17 would allow insurers to offer a new discount to drivers based on the length of time they’d been insured by any company, with corresponding surcharges on those who didn’t qualify — in short, those who’d recently allowed their coverage to lapse. But nothing in the measure would compel insurers to match their rivals’ loyalty discounts, so there’s no guarantee that drivers could “take their discounts with them” when they switched insurers. Instead, the amount of the discount would be up to each insurer. If drivers wanted the same terms, they’d have to find an insurer whose discount matched the one offered by their current company.

Nor is it clear whether the continuous coverage discounts would be as large as the loyalty discounts insurers offer today. That’s because the universe of drivers eligible for the new discount wouldn’t just be “responsible drivers,” as the Yes on 17 mailers claim; it would also include people who’ve bounced from one insurer to another as they’ve racked up collisions, claims and tickets. Meanwhile, the new discount would have to be offset through surcharges on any number of “responsible” people who stopped carrying insurance temporarily when they took a break from commuting.

The most misleading thing about the commercials is the suggestion that the proposed discount would exist if not for a “flaw” in the law. As part of Proposition 103, voters banned insurers from charging drivers more if they’d been previously uninsured. The point was to shift premium calculations from a system based on potentially discriminatory factors, such as where drivers lived, to one based on how they performed behind the wheel. Proposition 17 is just the latest attempt by some companies, most notably Mercury Insurance, to unravel that policy. Voters shouldn’t be confused by the Yes on 17 campaign’s skewed version of reality.

Propositions 16 and 17 Could Pave the Way for More Company-Backed Initiatives

June 5th, 2010

If the proposals pushed by utility PG&E and insurer Mercury succeed, individual corporations could turn to the ballot box as an easier way to change laws.

By Marc Lifsher, THE LOS ANGELES TIMES

Reporting from Sacramento — Tuesday’s California primary election represents a first — two initiative measures that were conceived and financed by individual companies. The fate of these propositions, analysts say, could determine whether other companies follow suit.

Proposition 16 is being pushed by Pacific Gas & Electric Co., which has provided 98% of the $46 million in campaign financing for the measure, according to the secretary of state’s office. The measure would make it harder for municipalities to launch utilities to compete with corporate providers such as PG&E.

Likewise, Proposition 17 was the brainchild of insurance company Mercury General Corp., which has raised 99% of its $16 million in campaign funding. Approval of the measure would make it easier for auto insurance companies to win customers from competitors by allowing them to carry over their loyalty discounts.

Both companies have spent far more than opponents, who raised just $50,000 against Proposition 16 and $1.3 million against Proposition 17.

A victory for either measure could mark a troubling development in the century-long evolution of direct democracy in initiative-happy California, some veteran political observers say.

“You could very well see the floodgates open,” said Dan Schnur, the newly named chairman of the Fair Political Practices Commission, the state’s political ethics watchdog. “Any number of corporations and union interests could decide that a ballot initiative is a much easier” way to change the law.

Gov. Hiram Johnson championed the ballot initiative in 1911 as a populist tool to counter Southern Pacific Railroad’s influence on the Legislature, noted Jessica Levinson, political reform director at the Center for Governmental Studies, a nonpartisan Los Angeles think tank.

“Now, we’re seeing special interests using the initiative process to simply bypass the Legislature completely by proposing laws that would overwhelmingly benefit the proponents of the initiative,” Levinson said.

PG&E and Mercury both insist the propositions they are backing would benefit millions of Californians.

PG&E contends that it and its allies — many of them nonprofit groups that have received contributions from the utility — are pursuing a good-government goal of giving citizens the right to vote on public power projects. Proposition 16 would require municipal power advocates to get approval from two-thirds of the voters in an affected area for any plan to create or expand a nonprofit alternative to a for-profit utility.

Voters rarely back any proposal by such a super-majority, so Proposition 16’s passage would essentially eliminate future public power efforts, opponents say.

For its part, Mercury claims that Proposition 17 could foster competition and lower insurance bills for most car owners by allowing them to keep a current discount for being loyal to their insurance company, even if they switch insurers.

“A more competitive market always makes people better off,” said Proposition 17 spokesman Mike D’Arelli.

Courts have ruled that such “portable” discounts violate Proposition 103, an initiative passed in 1988 that regulates property insurance rates. Consumer advocates in the past have contended that providing new discounts would raise premiums for motorists buying first-time coverage or who let policies lapse because they didn’t own cars or lived out of state.

The fact that both PG&E and Mercury are pushing pet initiatives doesn’t necessarily signify a trend toward a corporate takeover of the process, said Allan Zaremberg, president of the California Chamber of Commerce, which backs both propositions 16 and 17. “There are two unique circumstances here that happen to be on the same ballot,” he said.

Until this election cycle, initiatives that primarily benefited a single corporation have been rare. In 1984, a drive to give California a state lottery passed with support from Scientific Games Corp., a Georgia company that still sells instant-winner, scratch-off tickets to the agency.

Another company-specific effort, Proposition 10 in November 2008, failed spectacularly. The initiative, backed by Texas oil and gas developer T. Boone Pickens Jr., asked voters to approve $5 billion in bonds to finance investments in natural gas and alternative energy projects.

There have been no publicly available polls on either of next week’s business-backed propositions. But people who have seen private daily tracking polls say that the PG&E initiative has been stuck in the mid-40% approval zone while Mercury’s effort is running somewhere around 50%.

Often with initiatives, voters have an ability to see through the propaganda, said John G. Matsusaka, president of the Initiative and Referendum Institute at USC.

“If voters favor corporations, that’s their choice,” he said. “But the thing that concerns me is when the spending is so one-sided. You wonder, did the other side get to make its arguments?”

marc.lifsher@latimes.com

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?