Health Plan Foe Is Fined by FPPC

The sponsor of a referendum to repeal a controversial employer-financed health insurance law was fined $25,000 Monday for failing to properly disclose more than $1 million in contributions from big-name California businesses.

In levying the administrative punishment, the watchdog Fair Political Practices Commission approved a stipulated agreement between its staff and Californians Against Government Run Healthcare, the campaign organization that qualified the issue for the Nov. 2 election.

In the settlement, the campaign committee conceded that it had failed to electronically disclose within 10 days the receipt of contributions of $100,000 each from such major retailers as Nordstrom, Robinsons-May, Target and Sears Roebuck.

It also failed to promptly report donations of $500,000 from the California Restaurant Assn. and its political action committee; $100,000 from Yum! Brands, parent of KFC and Taco Bell; $100,000 from Darden Restaurants; and $5,000 from RUI One, which operates Restaurants Unlimited.

If approved by the voters, the November referendum would block a law, which goes into effect in 2006, requiring employers to pay for the health insurance coverage of uninsured workers. In California, all but a relatively small group of workers are covered by employer-paid insurance. If an employer did not provide healthcare coverage, it would be required to pay a fee into a statewide pool that would purchase coverage on behalf of the workers. Employers of 200 or more would be required to provide coverage for both employees and dependents.

Those with 50 to 199 workers would buy insurance for employees only, while those with 20 to 24 employees would be exempt until a future Legislature found spare cash to subsidize the premiums. Employers would be required to pay at least 80% of the premiums.

The new law was created by legislation (SB 2) by Senate leader John L. Burton of San Francisco and Sen. Jackie Speier of Hillsborough, both Democrats. Backers praised it as a prototype for the nation, while opponents argued that its costs would require them to reduce or eliminate healthcare for other employees.

Led by the restaurant association and the California Chamber of Commerce, opponents of the law say they cannot afford the cost of premiums, estimated at between $7 billion and $11 billion a year. Proponents say those estimates are overblown and the actual costs would be closer to $2 billion.

One backer of the new law, Anthony Wright, executive director of Health Access California, a labor and consumer organization, charged Monday that the failure to report the funds on time was a deliberate attempt to hide the big-name donors from Californians.

“These large corporations don’t seem enthusiastic to let the public know about their supporting this repeal of this important law,” he said.

Steve Churchwell, treasurer of Californians Against Government Run Healthcare and a former chief attorney for the FPPC, said he believed he was following the commission’s rules for proper filing when he disclosed the receipt of the contributions in January, two months after the campaign committee was formed.

The commission said contributions should have been reported on Nov. 3 and Nov. 10. In failing to meet the deadlines, it said, the referendum sponsors had denied information that voters were entitled to have.

The maximum fine against Californians Against Government Run Healthcare could have totaled $50,000, but the FPPC cut the sum to $25,000, because it said the organization “mitigated” some of the harm by making the disclosures in January. “Thus, the contributions were disclosed to the public ... 10 months before the Nov. 2, 2004, election,” the commission said. It also noted that 18 other contributions totaling about $1.1 million were properly disclosed.