Critics Spotlight Insurance Firms’ Clout; Event Delayed

At the height of the battle over earthquake insurance, in the waning days of the 1996 legislative session, it was going to be a true Sacramento political evening Wednesday night.

Both party leaderships were holding big fund-raisers, and both were anticipating heavy participation by the insurance industry.

But threatened by protests, the Republicans postponed their event and the Democrats came under some fire for theirs.

Assembly Speaker Curt Pringle (R-Garden Grove) and Insurance Committee Chairman David Knowles (R-Placerville) had issued a special written invitation to insurance lobbyists: $7,500 for a table of five to help “in large part, determine the future course of the state Assembly.”

Senate Democratic Leader Bill Lockyer (D-Hayward) was holding a $75-a-person “End-of-the-Session Barbecue,” but his letter to lobbyists invited them to sponsor a table of five for $5,000.

Deputy Insurance Commissioner Richard Wiebe observed: “It’s an unfortunate fact of life in Sacramento that fund-raising borders on being a full-time occupation.”

The Republicans have been solid backers of state earthquake insurance, which would take a big financial burden off the companies. Lockyer has often been a critic, calling it an insurance industry bailout, but he seems to be willing to accept the concept with a few amendments.

The GOP event came under fire from five consumer groups that announced plans to hold a news conference and demonstration outside the fund-raiser, charging the Republicans with plans to “cater to insurance industry donors over constituents’ interests 99.7% of the time.”

The consumer groups, in their news release and phone calls, did not mention the Democratic event.

By late afternoon, the Republicans had canceled their event. Later they said they had only postponed it until early September, after the end of the session.

The manager at the Sacramento Capitol Club was quite put out.

“They only told me the Legislature would be running late,” he said. “We already had brought in the sea bass, the beef, the ravioli, for a good 60 guests.”

John Nelson, spokesman for Pringle, said the GOP would reimburse the club for its expense, and that it could keep the food.

At the Personal Insurance Federation, a leading lobbyist for the bill to create a state earthquake insurance authority, spokesman Gerald Davies said that fortunately his group had not yet sent in its check for the Pringle-Knowles party.

As for the Lockyer event, he said, the federation had already notified the Democrats that it wouldn’t become a $5,000 sponsor, but would buy a number of $75 places.

The GOP’s Nelson said the reason the event, for which the invitations went out four weeks ago, was postponed was simply that Wednesday’s Assembly session had started at 2 p.m., nearly three hours late.

But Nelson indicated that the overall timing may have been a problem. When invitations went out July 23, he said, “we had already voted on earthquake insurance. We didn’t realize the Senate wouldn’t have acted by now.”

Harry Snyder, West Coast co-director of the Consumers Union, said he thought he knew the reason why the GOP dinner was postponed.

“The proximity of money raising to policymaking can’t stand the scrutiny of the public,” he said. “They have to back off when knowledge of how much money is being raised comes out in the open.”

Lockyer spokesman Sandy Harrison, meanwhile, said no thought had been given to canceling the Democrats’ event. How many of the lobbyists had consented to become $5,000 sponsors? Harrison said he didn’t know.

Why had the consumers made a big deal out of the Republican fund raising, but not the Democratic?

Greg Kaighn of the United Policyholders organization said, “I wasn’t exactly aware what kind of fund-raiser Lockyer was giving. Besides, the Republicans are trying to court the industry as a block.”

Ruth Holton, California director of Common Cause, said her group had focused on the Republicans because “theirs was an exclusive invitation to insurers.”

But, she added, “A lot of lobbyists are going to both dinners. We shouldn’t single out the Republicans here. It’s the Democrats and Republicans alike who are milking the lobbyists.”