Firm That Directed ‘Deep-Pockets’ Initiative Switches to Lawyers’ Side

The political management firm of Woodward & McDowell, which directed the winning “deep-pockets” initiative campaign for a coalition of big business and the insurance industry last year, has switched sides, going to work at a reported $40,000 a month for the California Trial Lawyers Assn., which fought the initiative.

Jack McDowell, a partner in the firm, said of the change in allegiance:

“It’s no secret we were disappointed at the lack of positive action that followed the victory of Proposition 51 last June. . . . It’s clear that many voters have a sense of betrayal, because liability insurance has not become generally available and has not gone down in price.”

But leaders of the business-insurance coalition scoffed at this explanation of the switch.

“They’re basically going where they view the pot of money to be in the next round of campaigning,” said Frank Schubert, manager of the Assn. for California Tort Reform. “As for heartfelt, deep-seated concern over the insurance industry, that’s just bogus.”

Kirk West, president of the California Chamber of Commerce, remarked, “Some of our people were incensed over their departure.” He said it appears that the trial lawyers hope that the hiring away of consultants who were privy to the business-insurance coalition’s strategy would discourage them from pursuing another initiative in 1988 that would cut even more drastically into the lawyers’ interests.

Woodward & McDowell is viewed in political circles as one of the most competent campaign management firms in the state. After recent resounding triumphs in the lottery and deep-pockets initiatives, it was hired to manage a projected initiative for the 1988 June primary ballot that would lift state spending limits formerly set by the Gann Initiative.

Developing Liberal Contacts

Although both McDowell and partner Richard S. Woodward are Republicans, they have become close to one prospective Democratic candidate for governor, Bill Honig, the state superintendent of public instruction. In moving to the trial lawyers’ side, they will be affording themselves a chance to develop liberal, Democratic fund-raising and other contacts that might come in handy in a Honig race. Honig is involved in the proposed changes in the Gann limits.

There also has been talk about the possibility of the trial lawyers sponsoring an insurance reform initiative for the general election in November, 1988. But the executive director of the Trial Lawyers Assn., Leonard Esquina, said Friday that the lawyers would prefer not to fund an initiative.

Esquina said that if the business-insurance coalition does not sponsor a new tort reform initiative contrary to the trial lawyers’ interests, the lawyers might avoid advancing an insurance reform initiative. He noted that initiative campaigns cost millions of dollars.

McDowell said that Woodward & McDowell’s first task in working for the trial lawyers will be to help organize “a rather extensive public education program that they have planned for the future.”

“There is a very definite desire and intent on the part of the present administration of trial lawyers not only to improve their image, but do things that would facilitate that,” he said.

Question of Ethics

Browne Greene, state president of the Trial Lawyers Assn., said, “We wanted to hire the best. I liken it to hiring away Vince Lombardi and Bart Starr from the Green Bay Packers at the height of their success.”

An insurance industry representative who asked not to be identified said the consultants’ switch raised ethical questions. He noted that Woodward and McDowell announced their move within two weeks of attending a luncheon at which the insurers laid out all their thinking for 1988.

McDowell responded that it is “hogwash” to suggest that his firm had been doing any spying or was trading information. He said that at the luncheon in question, the amount of free advice his firm had given the coalition far outweighed whatever information the coalition provided.

As for the suggestion that the firm moved to the side of the trial lawyers for reasons of money rather than ideology, McDowell said: “Of course, everybody in business is in business to pay his bills and have something left over at the end of the month. To deny such motives would be ridiculous, and I would not expect anyone to believe them. But this was not the motivation. The lawyers sought us.”

McDowell said the trial lawyers agreed that his firm would not work to repeal or abridge Proposition 51.