Insurer Donations to Willie Brown Attacked

Insurers gave at least $45,600 to Assembly Speaker Willie Brown’s campaign against two legislative term-limit initiatives within weeks of the passage of legislation exempting surety insurance from regulations imposed by Proposition 103, Voter Revolt Chairman Harvey Rosenfield said Tuesday.

Rosenfield called for a federal corruption probe of the matter and charged that “the campaign against term limits is being waged by the politicians bought and paid for by insurance companies and other special interests.”

Rosenfield, the author of Proposition 103, the voter-approved insurance initiative, also asserted that the Legislature and Gov. George Deukmejian acted illegally in approving the exemption of the surety companies.

Brown’s press secretary, Michael Reese, responded, “This attack is a reach even for the likes of Harvey Rosenfield. Clearly, Mr. Rosenfield is playing connect-the-dots politics. In this case, the dots do not and should not connect.”

Rosenfield noted that one clause of Proposition 103 prohibits the Legislature from changing the measure unless doing so furthers the purposes of the initiative. Exempting the highly profitable, $225-million-a-year surety insurance business from the rollback and rate regulation provisions of Proposition 103 does not further its purposes, he contended.

Rosenfield Tuesday asked Insurance Commissioner Roxani Gillespie to ignore the exemption pending a court test of its validity.

Surety insurers provide a financial guarantee that a party, such as a construction company, will perform the work they have promised to do on a project.

This is the second time this year that insurance industry sources have been accused of furthering their political agenda by giving to initiative campaigns not strictly related to insurance.

In the primary campaign, insurers gave more than $300,000 to efforts to pass Proposition 115, the anti-crime initiative. At that time, critics charged that the insurers’ real aim was to ingratiate themselves with the gubernatorial campaign of Republican Sen. Pete Wilson, while not embarrassing Wilson by giving directly to him. Wilson was the prime sponsor of the measure. Rosenfield noted that the measure to exempt the surety insurers from Proposition 103 quietly passed through the Legislature on unanimous votes in August and was signed by the governor Aug. 24. Many of the insurer donations to Brown’s campaign against the term limits--Propositions 131 and 140--came between Sept. 10 and 12.