Aerial view show the scope of devastation left by the Tubbs fire in the Coffey Park neighborhood of Santa Rosa, California, Wednesday, October 11, 2017. (Karl Mondon/ Bay Area News Group)

In summary

Insurance commissioner issues a mea culpa. Economist calls PG&E plan a bailout. Newsom wants changes to vaccine legislation.

Good morning, California.

“The group referred to as the ‘Band-uh’ will no longer exist.”— Emily Galindos, UC Davis’ interim vice chancellor for student affairs, after a consultant confirmed a Sacramento Bee report detailing hazing, binge drinking and sexual misdeeds by the school’s marching band.

  • The Bee’s original report: Renne Morrow, a 19-year-old sousaphone player, died three days after stepping in front of a moving car after a band “bonding” party in 2012. Her blood-alcohol content was twice the legal limit to drive.

Lara’s mea culpa

Sen. Ricardo Lara (D-Bell Gardens). Photo by Max Whittaker for CALmatters
Ricardo Lara

Insurance Commissioner Ricardo Lara has sworn off fundraising for the rest of the year, after news organizations reported he violated his own pledge by accepting more than $50,000 in insurance-related campaign contributions since being elected last year.

Why it matters: Lara oversees California’s $310 billion insurance industry. His office is especially relevant as insurance companies grapple with wildfire risk, and drop customers in fire-prone parts of the state.

Lara promised during his campaign that he would not take insurance industry money. 

The San Diego Union Tribune, followed by others, disclosed he violated that pledge by, for example, accepting $15,500 from a New York City nursery school operator who is the wife of an insurance executive.

In a letter made public Tuesday, Lara said “no laws or rules were broken— and these interactions did not affect nor influence my official actions in any way.” 

Lara’s letter says he takes full responsibility but “terminated” a fundraiser, and is imposing a “strict moratorium” on fundraising for his 2022 re-election campaign.

  • Lara: “I can and will do better. These failures are not consistent with my personal values nor my long career in public service.”

Lara’s letter neglects to mention he was his own campaign treasurer.

California’s Fair Political Practices Commission describes a treasurer’s duties:

  • “Campaign treasurers sign campaign-disclosure reports under penalty of perjury and are liable in enforcement actions for violations of the [Political Reform] Act. … No individual should accept the position of a committee treasurer as a mere figurehead.”

More complications for vaccine bill

Gov. Gavin Newsom

The Assembly Tuesday approved a bill to crack down on bogus medical exemptions for parents who don’t want their kids vaccinated, while Gov. Gavin Newsom tweeted that he wants changes to the legislation.

The legislation by Sen. Richard Pan, a physician and Sacramento Democrat, would require that the California Department of Public Health review medical exemptions if:

  • A child attends schools or daycare that have immunization rates below 95%.
  • Doctors have granted five or more exemptions in a year.

The bill was not expected to come up for several days. By putting it to a vote with little notice, the Assembly spared itself protests by anti-vaccine advocates who have become a fixture at the Capitol.

  • The bill awaits a final vote in the Senate.

Newsom agreed to language earlier this summer. But the governor called for more changes Tuesday: 

  • The state would start counting exemptions granted by doctors when the bill takes effect, presumably on Jan. 1.
  • Doctors who grant medical exemptions would not need to certify their veracity under penalty of perjury.
  • Doctors who face discipline could present additional information at their appeals.
  • Medical exemption details would be exempt from the California Public Records Act.
  • The California Department of Public Health would begin checking exemptions in 2020, not when a database of exemption is created in 2021 or later.

Unanswered: Will Pan agree to the changes? Will Pan’s bill be amended or is a separate bill required?

Vaccines in context

Photo illustration

California is one of 30 states experiencing measles outbreaks. The California Department of Public Health reports 67 measles cases in 2019, up from 15 in 2017.

The World Health Organization declared in 2000 that the United States had eliminated measles. But the United States could lose that status next month, CNN reports.

CNN quotes Dr. Nancy Messonnier, director of the U.S. Centers for Disease Control and Prevention’s National Center for Immunization and Respiratory Diseases:

  • “It certainly is incredibly frustrating and upsetting to the public health community that we may lose measles elimination status, because we do have a safe and effective vaccine.”

Economist: PG&E plan is a ‘bailout’

Burned homes, trees and vehicles in the Northern California city of Santa Rosa, after a devastating 2017 wildfire. Photo by Anne Belden,
Santa Rosa, after the 2017 Tubbs Fire

An economic analysis funded by hedge funds that hold $10 billion in PG&E bonds says creditors, customers and taxpayers would shoulder costs if the bankrupt utility is able to tap a $20 billion bond to pay for its wildfire liabilities.

PG&E wants the Legislature to authorize the state to sell $20 billion in bonds so PG&E can pay off liability from wildfires dating to 2015. PG&E says its shareholders, not ratepayers, would pay off the debt.

Hedge funds seeking control of the utility call it a bailout. So does the economist they hired, Christopher Thornberg, of the Center for Economic Forecasting and Development at UC Riverside.

  • Thornberg: “This is a bailout plan designed not to stabilize the utility and protect the state’s economy but rather to maximize return on investment for the hedge fund shareholders.”

Thornberg says ratepayers would subsidize a portion of PG&E’s losses through increased charges. 

  • His study was funded by the Coalition to Stop the PG&E Bailout, which includes the Agricultural Energy Consumers Association and PG&E bondholders. They declined to say how much they paid for the report.

Steve Maviglio, representing PG&E, noted that one of the hedge funds is controlled by a major Republican donor, Paul Singer

  • “Given that this so-called study was paid for by Donald Trump’s top hedge fund donor, it should be no surprise that it lacks foundation in fact.”

Senate President Pro Tem Toni Atkins has not decided whether to allow a vote on the proposal by Republican Assemblyman Chad Mayes of Yucca Valley.

Time is short. The Legislature leaves for the year Sept. 13.

Trust busting in 2019

Jordan Cunningham stands smiling on the Assembly floor.
Jordan Cunningham, 2016.

Four Assembly Republicans are expected to introduce a resolution today taking aim at Apple, Microsoft, Facebook, Google and Amazon.

The resolution urges Congress to overhaul antitrust law to open the way for action against the tech giants, and calls on Attorney General Xavier Becerra to work with other state attorneys general to determine what legal actions states can take to curb their monopolistic powers.

Assemblymen Jordan Cunningham of San Luis Obispo County, James Gallagher of Yuba City, Tom Lackey of Palmdale and Chad Mayes of Yucca Valley are being backed by James P. Steyer of Common Sense Media and the brother of billionaire Democratic presidential candidate Tom Steyer.

  • Steyer’s statement: “The imbalance of power in tech is not just bad for business, it’s bad for our kids.”

The resolution could have been ripped from the playbook of Progressive trust busters from a century ago. Whether it comes to a vote this late in the session remains to be determined. Democrats, who have been critical of many tech company practices, would be hard-pressed to oppose it. 

Money matters: In California, tech giants lean heavily Democratic in their campaign giving.

  • Facebook, Microsoft, Amazon and Google have donated a combined $1.75 million to Democratic candidates, the Democratic Party and its arms, and campaigns led by Democrats since 2015. 
  • The four have given $496,000 to Republican candidates and the state GOP during that. Apple hasn’t made state donations during that period.

Why California doesn’t cover IVF

Should California require insurance companies to cover IVF?

Fourteen states require insurance companies to cover infertility treatment, and most of those include in vitro fertilization. 

But not California.

CalMatters’ Elizabeth Aguilera reports that the average cost for in vitro fertilization, where eggs are retrieved and combined with sperm in a lab to create an embryo, is $10,000 to $15,000, plus medication that costs $5,000 to $7,000, clearly out of reach of most couples.

Legislation by Assemblywoman Buffy Wicks, an Oakland Democrat,  to require health insurance companies to provide coverage has stalled. To read Aguilera’s analysis of the issue, please click here.

Commentary at CalMatters

Ryan Haight, National Infertility Association: I am obligated to keep fighting for better infertility options for people trying to conceive. This includes advancing health care policies in Assembly Bill 767, which will benefit thousands of people. 

 Dan Walters, CalMatters: While California’s labor unions have achieved near total power in politics, they continue to see a decline in union membership.

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Dan Morain joined CalMatters in March 2018. He is the former editorial page editor of The Sacramento Bee. Morain also spent 27 years at The Los Angeles Times, and has covered the Capitol since 1992.

Judy serves as hub editor of the California Divide project, a five-newsroom collaboration covering economic inequality. Prior to editing, she reported on state finance, workforce and economic issues. Her...