CALIFORNIA ELECTIONS BALLOT PROPOSITIONS : Insurers’ Motives on Prop. 115 Questioned

Insurance companies have contributed more than $300,000 to the campaign for Proposition 115--an anti-crime initiative on the June ballot--and suspicious foes charged on Thursday that insurers may have hidden motives for their generous support of the measure.

The initiative’s opponents contend that insurers may be backing the measure because, under it, the courts could be so busy with criminal cases it would be increasingly difficult to bring civil suits to trial. That could enable insurers to stall or obtain more favorable settlements in cases where they are being sued, the foes said.

The accusations were heatedly denied by insurance officials, who said they support the initiative as an effective device to curb crime and thus trim insurance losses. And backers of the proposition said the opponents’ claims reflected a resort to desperation tactics in the face of a losing battle to defeat it.

Bob Wickers, campaign director for the main group backing the initiative, also said that the $322,000 insurance companies have donated represents a relatively small proportion of the $2.2 million raised in behalf of the initiative.

Most suits involving insurance are civil cases. The initiative, sponsored by prosecutors and victims’ groups, aims to reduce delay in the criminal justice system and curb the constitutional rights of criminal defendants.

Among other things, the measure eases requirements that witnesses testify personally at preliminary hearings, requires that court-appointed defense attorneys be ready for trial by certain dates and imposes deadlines on courts to bring felony cases to trial.

“Experts tell us that if 115 passes, it will all but consume every judge in the county in order to try criminal cases,” said Ian Herzog of Los Angeles, president-elect of the California Trial Lawyers Assn. and an initiative opponent. “It means innocent civil victims won’t have a place to have their cases tried.”

Another spokesman for initiative opponents, Sacramento defense attorney Michael Rothschild, said: “The insurers are giving a lot of money to 115 because they know it will shut down the civil courts. . . . Insurance companies only do things because they can make money from it; they don’t do things for benevolent purposes.”

Jack Nickell, campaign director for Californians for Privacy, a coalition of groups opposing the measure, said that insurers may stand to gain better access to personal medical records if, as opponents claim, the measure weakens state privacy protections.

Another motive for the big contributions, Nickell said, could be to provide indirect support for the gubernatorial candidacy of Republican U.S. Sen. Pete Wilson, who is honorary chairman of the initiative campaign.

While some industry officials remained tight-lipped or unavailable for comment, others reacted vehemently to the charges, calling them “silly” and a “big lie.”

James Snyder, president of the Personal Insurance Federation of California, an industry association, said the initiative could result in faster and more effective prosecution in insurance-fraud cases. At a “bare minimum,” he said, fraud against insurers costs consumers over $100 million annually in Southern California alone.

“We all pay the cost of crime--and we’re all frustrated with the inefficiency and what appears to be the lack of effectiveness in the criminal justice system,” Snyder said.

“Crime is a major contributor to insurance costs,” said Curt Olsen, a spokesman for TransAmerica Insurance Co., which contributed $25,000 in support of 115. “The less crime there is, the less our losses will be. Crime is expensive to insurance companies and their policyholders.”

Top officials of Mercury General Corp. and Surety Co. of the Pacific, which each contributed $100,000, were not available for comment. George Joseph, chief executive officer of Mercury General, and Bill Erwin, chief executive officer of Surety, are known in political circles as strong Republican Party supporters.

A spokesman for Wilson joined in blasting the the opponents’ claims.

“The opponents are trying again to create the big lie,” said Bill Livingston, press secretary of Wilson’s campaign for governor. “The initiative will do the very opposite of what they say. . . . It sounds like they are desperate.”

Livingston said that, in fact, the initiative will relieve congestion in the courts--speeding both criminal and civil cases--and that it does not threaten the confidentiality of medical records or any other rights to privacy. “There is no hidden agenda,” he said.

Nickell released a list showing that 14 insurance companies had donated $322,000 to the “Yes on 115” campaign, in amounts ranging from $500 to $100,000. The larger contributions are unusual, he said, because the industry traditionally has not made major donations in campaigns that do not appear to involve it directly.

While conceding there was no way to determine the motives for the contributions, Nickell contended that the prospect of a “logjam of criminal cases” in the courts and more readily available medical records seemed the most likely explanations.

Times staff writer Kenneth Reich contributed to this story