Insurance Initiative Spending Climbs to Record $61 Million

Spending in the insurance initiative fight on all sides reached at least $61,182,505 by Oct. 22, two weeks before the election, according to record-breaking contribution and spending reports made available Friday.

With many expenditures still to come, the amount is about 2 1/2 times what has ever been spent before for a California political contest.

The new spending figures include $40,796,583 from the insurance industry alone, and an industry spokesman acknowledged Friday that it is probable that spending by the insurers will reach $48 million or $49 million in their campaign for Propositions 104 and 106 and against the anti-industry Propositions 100 and 103.

Scott Carpenter, a spokesman for the insurers, said spending by the main campaign organization is running about what had been projected earlier, at $37,925,869 thus far, but he added, “Individual (insurance) companies are doing more than we had originally thought. Those estimates were short.”

Auto Club Spending

For instance, according to their statements Friday, the Automobile Club of Southern California has spent $1,515,000 on its promotion of Proposition 104, the no-fault initiative, and its affiliate in Northern California, the California State Automobile Assn., has spent $1,355,714.

Other spending in the initiative campaigns through Oct. 22 included:

- $12,397,255 by the Proposition 100 campaign, primarily funded by the California Trial Lawyers Assn., individual lawyers and law firms, but also by banks, chiropractors and other medical practitioners.

- $5,160,138 by the Proposition 101 campaign, 96% of which has come from companies controlled by Harry O. Miller, chief executive of Coastal Insurance Co.

- $2,224,670 by the Proposition 103 campaign, most of which has come from small individual contributors. The amount includes hundreds of thousands in unpaid bills; this campaign, supported by consumer advocate Ralph Nader, remains deeply in debt.

- $603,859 from two independent committees organized by trial lawyers opposed to the insurers’ Proposition 106, which calls for strict limits on lawyers’ contingency fees.

The largest amounts spent in individual campaigns in California before this were in the 1986 reelection campaigns of Gov. George Deukmejian and Sen. Alan Cranston--approximately $13 million each. Cranston and former Rep. Ed Zschau spent about $25 million between them in their 1986 Senate race.

The $61-million total in the current insurance campaign is not all that was spent through Oct. 22, but it is most of it. Representatives of various campaigns said other companies and interests have made additional reported expenditures, but there was insufficient time to check through all the forms at the California secretary of state’s office to come up with a more comprehensive figure.

As the spending grows, there is evidence that independent committees dedicated to working against some of the initiatives are proliferating, but most of these appear to be drawing funds from the same groups funding the main campaigns--particularly insurers and trial lawyers.

The insurance industry campaign Friday charged both of its rivals, the Proposition 100 and 103 campaigns, with underreporting their expenses.

Carpenter, the insurers’ spokesman, asked, “Where’s Ralph (Nader) in the 103 reports? He appears nowhere in there. . . . There’s no travel expense, no lodging expense, no expense at all, despite his several trips to the state.”

He added: “The (Proposition) 100 people still have not reported any in-kind contributions, which appears to violate the law, because thousands of letters have been mailed by law firms on behalf of their initiative, and they should have been reported as in-kind contributions on the forms.”

Responding for the 103 campaign, Chairman Harvey Rosenfield said that many past Nader expenditures had been reported as payments to hotels and airlines without using his name and that other bills had been paid by other groups.

For the 100 campaign, spokeswoman Patti LeVine said: “Independent expenditures by attorneys are not reportable until they exceed $1,000 and we’re unaware that any attorney has spent more than $1,000. Most have thrown the (Proposition) 100 materials into regular mailings.

‘Diversion Tactic’

“I think it’s an attempt by the insurers to divert attention from all the money they’re spending,” she added, saying she believes it will reach $50 million.

Big new contributions were reported in most quarters except for the Nader camp in the latest filing period, from Sept. 30 to Oct. 22, but the insurers were apparently in a much more solid financial position than the trial lawyers going into the last two weeks of the campaign.

The insurers had nearly $8 million in the bank, ready to be spent, on their main campaign advertising, which at this point is mostly an assault on Proposition 103, the only measure leading in recent polls. The Proposition 100 campaign financed mainly by the lawyers, by contrast, reported it had slipped into about $190,000 of debt.

The biggest insurance companies continued to make massive contributions to the industry effort.

State Farm, the biggest seller of auto insurance in California, reported new contributions, both in direct cash to the industry campaign and to its own company promotional efforts, of $1,360,131, bringing its total thus far to $5,203,091.

Farmers, Allstate Spending

The Farmers group of companies, meanwhile, gave another $1,415,953, bringing its total contributions to $4,295,465, while Allstate gave another $357,394, making its total $3,105,126.

Other major sellers also added to their already substantial contributions. The totals thus far for Fireman’s Fund reached $2,003,744; for United Services Automobile Assn., $1,360,535; for the Insurance Information Institute, a trade association, $1,246,941, and for 20th Century, $798,187.

Some insurers contributed during the latest period for the first time. The American Council of Life Insurances, based in the East, gave $600,000 and the Assn. of California Insurance Companies, a lobbying group, $250,000.

On the Proposition 100 side, the contribution totals for the political action committee of the California Trial Lawyers Assn. had reached by the latest reporting deadline $3,720,883; for the California Bankers Assn., $646,975, and for the California Chiropractic Assn., $796,769.

Most of the contributions from lawyers, however, continued to come from individual personal injury trial attorneys and their law firms. Several other law firms, including Girardi, Keese & Crane of Los Angeles and Hurley, Grassini & Wrinkle of Los Angeles, reached the $100,000 mark in total contributions.

While the contributions cascaded in to the Proposition 100, 104 and 106 campaigns, the Proposition 101 campaign was unable to widen its fund-raising base beyond Coastal Insurance’s Miller.

All but about $2,000 of the amount that campaign raised in the latest reporting period came from Miller’s companies, despite earlier expressed hopes that other insurers would contribute.