Lobbyists Told State Insurance Chief They Represented Company at Center of Campaign Scandal, New Filing Says

Two former state lawmakers now working as lobbyists spoke personally with California Insurance Commissioner Ricardo Lara and his senior deputy, contrary to what state officials have said in a public-records lawsuit unfolding now in a Los Angeles courtroom.

In a sworn declaration filed last month, former state Assemblyman Rusty Areias said he told Lara in 2019 that he had been hired by the workers’ compensation firm Applied Underwriters and may be reaching out to Lara in the future.

At the time Applied Underwriters was seeking state approval from Lara’s office for a change in ownership.

Areias said in the declaration that he spoke repeatedly with Deputy Commissioner Bryant Henley, one of the senior Department of Insurance officials who intervened in department
proceedings to benefit Applied.

“During the course of assisting the clients on this matter, I had multiple phone calls with Bryant Henley of CDI regarding CIC and Applied Underwriters,” Areias said in the sworn declaration filed in Los Angeles Superior Court.

CIC is an acronym for California Insurance Co., a subsidiary of Applied. CDI stands for the California Department of Insurance.

“In our telephonic conversations, Lazlo Komjathy at CDI was always on the line but never said anything,” Areias said. “In these calls I informed Henley and Komjathy, among other things, that I was representing CIC and Applied Underwriters.”

The declaration is significant because state insurance regulators typically are not supposed to take up the cause of companies they regulate. Henley at least twice overruled administrative law judges who decided cases in favor of Applied policyholders.

Henley also was the official in charge of responding to the California Public Records Act requests filed by a group called Consumer Watchdog.

Consumer Watchdog in 2020 sued the Department of Insurance for emails and other communications related to Applied Underwriters after The San Diego Union-Tribune reported in 2019 that Lara had accepted thousands of dollars in political donations from insurers, despite promising during his 2018 campaign not to do so.

At the time, Lara publicly apologized for accepting political contributions from people associated with Applied or other insurance companies, and he returned more than $80,000 to insurers and other donors with business before state regulators.

Click here to read the full article at the San Diego Union Tribune

Burglars Hit At Least A Dozen Sacramento Lobbyists And Nonprofits In Downtown Break-In

Lobbying firms, nonprofits and a union were among the tenants affected by a burglary at the Forum Building on Thursday.

The 10-story building, located a block from the Capitol at the intersection of 9th and K Streets, houses a swath of government relations firms and other organizations that do business with the state. On the morning of Dec. 23, tenants were informed that the building had been broken into the night before.

Rubicon Property Management, which manages the Forum Building, declined to comment on the robbery. In an email to tenants obtained by The Sacramento Bee, management said more than a dozen offices had been compromised by forced entry.

The affected tenants included the California Federation of Teachers, California Strategic Advisors, Reeb, EdVoice, California Association for Adult Day Services, the California Air Pollution Control Officers Association, the California Association of Councils of Governments, the California Solar and Storage Association, Hispanic League of Colleges and Universities, Corbin & Kaiser, the Planning and Conservation League and Houston Magnani and Associates.

Sacramento Police told The Bee that officers responded about 8:30 a.m. Thursday morning, where they saw signs of forced entry and discovered multiple businesses within the building had been burglarized. The investigation is ongoing, police said.

Rubicon on Monday told tenants in an email that law enforcement was able to collect finger prints from the offices. Management will also install additional cameras in elevator lobbies and install security guards 24/7, the email said.

Samantha Corbin, CEO of the firm Corbin & Kaiser, said thieves entered office suits by breaking door handles, locks and door frames. She speculated they might have had a key card.

Corbin said the burglars took brand new computer equipment, banking and routing information, and employee payroll information like Social Security numbers from the filing cabinets in her office suite.

Corbin said she and other tenants have become increasingly wary of working downtown, and say the empty storefronts and rundown streets contribute to crime and theft.

“It’s been so bad on K Street in general,” Corbin said. “I don’t think this is a building owner issue. This is a Sacramento city government issue.”

Ron Kingston, a lobbyist and president of California Strategic Advisors, said things were “strewn everywhere” in his office. His door was busted open and documents from like invoices and billing statements with bank account and routing information, were taken. Kingston said he’s concerned the area isn’t safe.

Click here to read the full article at the Sacramento Bee

Bill Would Ban Legislators From Accepting Lavish Trips From Lobbyists


For average Californians, the news out of Sacramento is seldom good.

Finding ways to increase the tax burden, eliminate the taxpayer protections in Proposition 13 and increasing the cost of living seem to be the preoccupation of most members of the Legislature. The majority of bills that are introduced are designed to give special interests an advantage over their competitors and/or taxpayers.

To illustrate how this can work, let’s look at an issue state regulators faced some years ago. The burning public policy question was whether or not dog groomers should be allowed to clean dogs’ teeth. No, seriously. Veterinarians argued that this should be their exclusive purview because they can perform this procedure more “safely.” Dog groomers claimed this was just an attempt by animal doctors to eliminate competition so they could increase the cost to consumers, who, because of higher prices, might be less attentive to their pets’ needs.

Perhaps only the dogs know who was right, but the point is that much of what passes for activity in our state capitol is in the picking between winners and losers, whether it’s insurance companies versus trial lawyers, school choice advocates versus unions, doctors versus chiropractic providers, etc., ad nauseam. More often than not, the winners are not those with the best argument but, instead, are those with the most political clout. And of course having clout includes the ability to provide generous campaign contributions, turn out voters and hire the most persuasive lobbyists.  This helps explain why the losers are usually average folks.

ShakingHandsWithMoneyStill, there are some regulations over lobbying activity that are designed to give the illusion of fairness. For example, there are limitations on gifts that lawmakers can accept from lobbyists. However, there remains a huge loophole that allows special interests to dominate individual lawmaker’s attention for days at a time. This loophole is free luxury vacations provided to legislators, that are disguised as seminars or conferences.

Every year members of the Legislature are whisked off to exotic locales – Hawaii is a favorite — where they enjoy complimentary luxury lodging and dining, often overlaid by activities like golfing, tennis and snorkeling. In return, the lawmakers are expected to attend brief meetings. Sponsors assure the public that these trips are opportunities for lawmakers to learn more about important issues.

Others call these junkets a form of legalized bribery. They are designed to allow special interest lobbyists to have exclusive call on lawmakers’ attention, against which the officials’ small fry constituents cannot afford to compete.

Enter Assemblywoman Patty Lopez who would ban legislative junkets funded by interest groups. Her Assembly Bill 2840 would prohibit non-profit organizations (set up by lobbying interests) from providing lawmakers with free transportation, lodging and food.

Assemblywoman Lopez summarized the issue by saying “They’re not going to learn anything by golfing with lobbyists in Maui.”

Will Lopez’s colleagues approve her reform legislation intended to reduce the influence of special interest lobbyists by forcing lawmakers to give up junkets? You’d be better off betting on the snowball.

Jon Coupal is president of the Howard Jarvis Taxpayers Association — California’s largest grass-roots taxpayer organization dedicated to the protection of Proposition 13 and the advancement of taxpayers’ rights.

This piece was originally published by the Howard Jarvis Taxpayers Association

Jet-Setting CA Politicians


Globe_2013According to press reports, Fresno Assemblyman Henry T. Perea is off to Spain to study high-speed rail while accompanied by business and labor representatives. He is being joined by his father, Fresno County Supervisor Henry R. Perea.

Out-of-state travel by California politicians is common. Lawmakers say such trips are valuable in learning about programs and policies in other states and countries. Other times travel is justified as an opportunity to attend conferences with those facing similar issues. That the destinations of these trips are so often 5-star hotels in desirable vacation spots is dismissed as coincidence by the journeying elected officials. Still, it seems strange that so many “important” conferences take place in locations like Hawaii and not in Narvik, in northern Norway, during the fall and winter. A few years ago, a number of Los Angeles City Council members jetted off to Paris in the springtime, explaining that the trip was necessary to study public toilets. (You can’t make this stuff up.)

In fairness to Assemblyman Perea, who is termed out next year, there is no suggestion that taxpayers are footing the bill for his weeklong trip — the expenses will be paid out of campaign contributions, according to his spokeswoman.

While there is nothing unusual about trips like these by lawmakers, this does not relieve concerns that these junkets are far from being in the best interests of average taxpayers.

When spending a great deal of time in the company of those who have an interest in pending legislation or government policy, there is the risk that their concerns will become a priority for the lawmakers. After a glass of wine and good paella, the dubious arguments of lobbyists can begin to make sense to even those with a great deal of willpower.

In the case of Perea, there is little additional risk to taxpayers, since he is already a forthright and committed supporter of high-speed rail. “A successful high-speed rail system will bring good paying jobs to the community, while making Fresno more accessible for economic investments,” he has stated.

High Speed RailHowever, it should be noted that the current high-speed rail program, that is intended to speed travel between Los Angeles and San Francisco and Los Angeles and Sacramento, will do little or nothing for average Californians who spend, according to the U.S. Census Bureau, 27 minutes traveling to work — nearly an hour for the round trip. So while a program that may be a boon to those who can afford to travel, it will do nothing to provide relief to those sitting in traffic while commuting to and from work.

Leftist social engineers who want to repopulate the inner city using urban lofts, tony restaurants and cultural attractions as a lure, don’t want people commuting to work. They want to promote a “Starbucks” lifestyle, where everyone lives near where they are employed and if necessary, use a bicycle or public transportation – the Los Angeles City Council recently approved a plan to reduce hundreds of miles of vehicle traffic lanes to provide more room for bicyclists.

While the social engineers may not like the traditional suburbs it is here that most Californians continue to live, and for them bicycling to work is not a practical option. They want to see improved roads and local transportation options, not a train intended to whisk the leisure class off to far away cities. They want their transportation dollars spent to make their lives easier. They show no desire to pay an outrageous sum – hundreds of billions — to subsidize a project that, assume it even gets built, will serve very few.

Originally published by the HJTA.org

Jon Coupal is president of the Howard Jarvis Taxpayers Association — California’s largest grass-roots taxpayer organization dedicated to the protection of Proposition 13 and the advancement of taxpayers’ rights.

The Juiciest Job in Sacramento

hustler_casino71Around the Capitol they’re known as “juice committees” – those that oversee lucrative industries, allowing politicians to foster relationships they can squeeze for campaign cash.

These panels preside over business interests that fight obscure industry battles before the Legislature; think of lawyers vs. insurance companies, doctors vs. physical therapists, or card rooms vs. Indian casinos.

“These are non-visible issues that are of high interest to very wealthy groups,” said Stacy Gordon Fisher, a political scientist who studied Sacramento’s juice committees as a professor at University of Nevada, Reno.

So those groups spend what it takes to get noticed, hiring lobbyists and pouring money into political campaigns.

One of the juiciest committees is responsible for regulating booze, cigarettes and gambling. It was called the “committee on public morals” back in the 1800s but now goes by a more innocuous name: the committee on governmental organization.

G.O., as the committee is known, is one of the Legislature’s biggest, with a total of 34 members in the Senate and Assembly. Its decisions impact profits for California’s gambling factions — card rooms, racetracks and Indian tribes that run casinos. And now, those businesses are bankrolling the political ambitions of the committee’s chairman, Sen. Isadore Hall (D-Compton).

Hall landed in the California Senate in December, following a special election in which just 7 percent of those registered turned out to vote. It was the latest in a long string of political victories for Hall, who advanced from the school board in Compton to its city council to the state Assembly. He represents one of California’s poorer Senate districts, where about 20 percent of people live in poverty.

Hall had served less than three months in the state Senate when he announced plans to run for the Congressional seat being vacated by Rep. Janice Hahn (D-San Pedro), who endorsed him. Through June, he’s raised twice as much money as his closest opponent, attorney Nanette Barragan.

As Hall works to build a campaign war chest for what’s likely to be a competitive election next year, about 8 percent of his donors have come from the district he seeks to represent.

Instead, the bulk of them reflect relationships he’s built as G.O. chairman. More than one-third of the $369,000 Hall raised in the first six months of the year came from people tied to a gambling business. Donors include:

  • Former Assembly speakers Fabian Núñez and Willie Brown, who have worked as consultants to casino magnate Sheldon Adelson in his fight against online poker – an issue that has come before Hall’s committee for several years.
  • Pornographer Larry Flynt, who owns the Hustler Casino in Hall’s Senate district and pushed for a bill this year that would change a rule about casino ownership.
  •  Sacramento lobbyists David Quintana and Steve Cruz, who represent casino-owning Indian tribes, and Robyn Black, who represents Flynt and horse-racing interests. They routinely lobby bills in Hall’s committee and are forbidden by state law from contributing to a legislator’s state-level campaign. The law does not apply, however, to federal races.
  • Las Vegas casino executives Frank and Lorenzo Fertitta, whose company worked with a California tribe to plan a casino near Fresno with the help of a bill carried by Hall.
  • Seven Indian tribes that run casinos, as well as owners of numerous card rooms and horse racing tracks.

“They want to have access to him to have their position heard,” said Gordon Fisher, the political scientist who wrote a book called “Campaign Contributions and Legislative Voting.”

“Over the long term they give him money, he hears them out. There’s not necessarily a quid pro quo, but a relationship is built.”

Asked about his fundraising, Hall said he didn’t want to talk about it while inside the state Capitol. And then he did not respond to follow-up inquiries.

Card room owners are supporting Hall’s congressional campaign because he’s “a champion for the industry,” whose support goes back to his experience in local government, said Jarhett Blonien, a lobbyist who represents several card rooms.

“It’s not so much that they’re looking for favors, it’s that Isadore is their friend and they want to help him out,” Blonien said.

Black, the horse-racing lobbyist who gave $500 to Hall’s campaign, said her donation is unrelated to the business she has before him. She pointed out that she’s donated to several congressional campaigns across party lines.

“There are members that you get to know because you worked with them here in Sacramento and you just know they’re the kind of person you want representing our state,” Black said.

The message was the same from Quintana, the lobbyist for several casino-owning tribes, who gave $2,000 to Hall’s campaign: “I’ve seen him operate in Sacramento… and I think he would make a great congressman.”

To be clear: donors don’t necessarily get their way. Quintana, for example, lobbied against a bill Hall carried this year to expand the ability for sports teams to host live raffles at their games. The bill passed through the Legislature and is awaiting action from Gov. Jerry Brown.

Which gets back to the allure of a juice committee: Often, the money keeps flowing no matter which way politicians vote.

“It’s not like he always has to represent their interests for this to be a good investment,” Gordon Fisher said.

“Every once in awhile he might be a critical vote on a piece of legislation that’s important to them.”

Originally published by CalMatters.org