California Insurance Commissioner Ricardo Lara is being hammered by allegations that he took campaign contributions from insurance industry sources and favored contributors.
This has been a long, hot summer for Ricardo Lara, a former state legislator from Los Angeles who was elected as California’s insurance commissioner nine months ago.
He’s been hammered by a series of journalistic revelations, mostly in the San Diego Union-Tribune, about how he has indirectly reneged on a campaign promise not to accept campaign contributions from insurance industry sources.
Union-Tribune reporter Jeff McDonald wrote that Lara’s office “intervened in at least four proceedings involving a company with ties to insurance executives and their spouses who donated tens of thousands of dollars to his re-election campaign, records show.”
Lara quickly did a mea culpa, saying, “I appreciate The San Diego Union-Tribune bringing this to my attention” and promising to return the tainted contributions.
However, the revelations have continued, not only in the Union-Tribune but in other media.
Lara portrayed himself as a tough regulator of the insurance industry during his hard-fought campaign against a former holder of the office, Steve Poizner, last year.
However, Politico, a political website, reported this week that during a private speech to insurance executives in July, Lara declared support for a long-sought goal of giving insurers more access to drivers’ vehicle data, something that privacy advocates oppose. He told the executives, “I’m prepared to get creative, just like all of you have been for so many years.”
Lara’s situation recalls that of Chuck Quackenbush, another former state legislator who was elected as insurance commissioner in 1994 and was also seen as a rising political star.
In 2000, after Republican Quackenbush won a second term, the Los Angeles Times reported that he had not only collected campaign contributions from insurers but directed some of the money into his wife’s nascent hopes for political office.
Quackenbush, the Times reported, also made deals with insurers who had been accused of unfair practices in handling claims from the Northridge earthquake, allowing them to donate to special funds he controlled in lieu of being fined. The funds were used for “public service” television ads in which Quackenbush appeared – a way of building his public profile.
As revelations about Quackenbush mounted, the Legislature, controlled by Democrats, launched investigations. He denied any wrongdoing but within a few months resigned. He later moved to Hawaii, then to Florida to become a sheriff’s deputy, but that came to a bad end as well; he was forced to resign from the Lee County force after making Facebook postings considered to be racist.
It’s unlikely that Democrat Lara’s former colleagues in the Legislature would subject him to the same kind of embarrassing scrutiny that led to Quackenbush’s much-deserved downfall.
There is another aspect to the situation that drips with irony.
Some of the loudest criticism of Lara is coming from Consumer Watchdog, a Los Angeles organization that sponsored a 1988 ballot measure to make the insurance commissioner an elected official rather than one appointed by the governor and give the office new regulatory powers.
After the Union-Tribune’s revelations, Consumer Watchdog dispatched a letter to Lara giving him until the end of July “to reveal details of these fundraising contacts or face a lawsuit to compel his answers.”
The Quackenbush and Lara imbroglios stem from the wrong-headed conversion of a regulatory office to a political plum. It infuses the sort of horsetrading and mutual backscratching one finds in the Legislature into what should be a dispassionate and objective regulatory process.
If Consumer Watchdog wants to clean up insurance regulation, it should sponsor a ballot measure to undo what it did 31 years ago.