Critic: Insurance mogul is hijacking ballot process

Consumer Watchdog founder Harvey Rosenfield showed up today at a Sacramento conference celebrating the 100th anniversary of California’s ballot initiative process with 8,000 of these (click to enlarge):

“Corporations are abusing California’s initiative process for their own profit,” Rosenfield said in a news release. “The Legislature is more beholden to special interests than it has ever been, and now these special interests are attempting to seize control of the initiative/referendum process that was put in place by California voters one hundred years ago today to protect us against that kind of government corruption.”

Rosenfield made up the fake bank notes to bring to the Citizens in Charge Foundation’s conference as “exhibit A” for his argument. Mercury Insurance Chairman George Joseph has put in more than $8.2 million so far to support a proposed ballot measure for June 2012 that would repeal the section of state law – enacted by Rosenfield’s Proposition 103 of 1988 – barring insurance companies from considering a driver’s coverage history when setting rates and premiums.

California voters defeated the similar, Mercury-backed Proposition 17 last year.

“California’s initiative process is suffering from ‘Mercury poisoning,’” Rosenfield said in his news release. “Joseph is the California poster child for the 1 percent in our country that wants to prosper at the expense of the 99 percent. He is number 375 in Forbes’ 400 richest people in America. He and his company have spent tens of millions of dollars attempting to enrich himself and his company by manipulating the Legislature and the ballot initiative process at the expense of Californians. The immediate antidote is voter vigilance; the long term solution is to prevent special interests from interfering with the rights the Founders gave to the American people.”

The proposed ballot measure’s supporters have until Jan. 9 to gather valid signatures from at least 504,760 registered California voters in order to put it on next year’s ballot.

Rachel Pitts, spokeswoman for the committee backing the Joseph-funded ballot measure, has said this measure is significantly different than Prop. 17. For one thing, she said, it deems continuous coverage to have existed if there was a lapse due to a person’s active military service – a change that brought servicemembers’ and veterans’ insurer USAA, which had opposed Prop. 17, into the fold for this one.

She also has said the new measure deems continuous coverage to have existed even if there was a lapse in coverage of up to 18 months in the last five years due to loss of employment resulting from a layoff or furlough. Young, new drivers get the same rate as their parents, she said, and drivers get a discount proportional to the amount of full years they have had insurance in the previous five years.

Pitts last month knocked Consumer Watchdog as a special-interest group that has gotten rich from the insurance intervenor fees created under Prop. 103.

But Consumer Watchdog estimates this new measure could cause premiums to rise by as much as 40 percent for millions of Californians including students who went away for college, Californians who previously used mass-transit, and the long-term unemployed. It also cites a 2008 Consumer Federation of America study that found Proposition 103 had saved California drivers more than $62 billion in its first 20 years.

“I am a strong believer in the initiative process and the wisdom of the voters,” Rosenfield said in his release today. “Dangerous and deceptive initiatives like Mercury’s designed to reward the wealthy and powerful at the expense of the rest of us threaten the integrity of the precious ‘battering ram’ of the initiative process that California voters bequeathed to us 100 years ago today. But the brilliance of California’s initiative process is the faith it puts in voters who know enough to see through an insurance company power grab. California voters must be exceptionally vigilant at the ballot box.”

UPDATE @ 5:30 P.M.: I had tried to reach Pitts today, but have now learned she’s out for a few weeks, with spokesman Vince Duffy pinch-hitting.

“Consumer Watchdog has jumped the shark,” Duffy said. “The truth is that they are not an independent third party looking out for the best interests of the consumer – they are political and legal insiders. As others have already suggested, Consumer Watchdog is funded by special interests with political axes to grind, and their principals have grown wealthy while they distract observers with crafty, and sometimes creepy, public relations.”

Duffy said it’s time to find out why Consumer Watchdog doesn’t disclose its donors, and “to see who has really personally profited from their antics. The closer folks look at this gang led by attack-dog lawyers, we believe we will find much more Elmer Gantry to them and their motives than any genuine desire to protect the consumer.”

This ballot measure, he said, would bring California in line with almost all other states.

“Under the present California system, one supported by Consumer Watchdog, the insurance companies can offer a discount to a consumer for continually having insurance, but the consumer cannot take that discount and shop it around to other insurance companies for a lower price,” he said. “Under the present system supported by the secretive ‘watchdog,’ you lose your persistency discount if you miss being insured by a day. Under the new initiative, veterans are protected, students are protected, those who have lost their jobs in a tough economy are given a break, and there is proportional discount for those who were only insured at intervals over the previous five years.”

Josh Richman

Josh Richman covers state and national politics for the Bay Area News Group. A New York City native, he earned a bachelor’s degree in journalism from the University of Missouri and reported for the Express-Times of Easton, Pa. for five years before coming to the Oakland Tribune and ANG Newspapers in 1997. He is a frequent guest on KQED Channel 9’s “This Week in Northern California;” a proud father; an Eagle Scout; a somewhat skilled player of low-stakes poker; a rather good cook; a firm believer in the use of semicolons; and an unabashed political junkie who will never, EVER seek elected office.

  • RR, Senile Columnist

    Big Insurance has joined the ranks of the other Biggies conspiring to ruin the lives of the trusting, guiless Little People in their multitudes. The “ballot process” so jealously guarded by the Left is insane, absurd and laughably dysfunctional.

  • John W

    I had no idea that fondness for “ballot box” democracy as practiced in California was limited to one end of the political contiuum — i.e., “the Left.” That would probably come as a surprise to Howard Jarvis. But it is indeed “insane, absurd and laughably dysfunctional.”