New Bids to Reform Campaign Finance

SACRAMENTO -- Emboldened by the passage of federal campaign finance reform, state lawmakers and consumer groups have renewed efforts to toughen California’s laws by curbing contributions to the insurance commissioner and cracking down on misleading advertising.

State Sen. Jackie Speier (D-Hillsborough) is sponsoring new legislation that would prohibit insurance companies from contributing to the incumbent insurance commissioner or any candidates for the job. Her bill would allow individual contributions from insurance agents and company officers and directors but limit them to $500.

As an outgrowth of the scandal that forced former Insurance Commissioner Chuck Quackenbush from office in 2000, the bill would make the next commissioner subject to impeachment if he repeatedly violated the ban.

In the Assembly, a 20-year veteran has introduced a bill that would prohibit independent political committees from financing campaign advertising that contained a false endorsement of a candidate. Violators would be subject to a $1-million fine.

Assemblyman Lou Papan (D-Millbrae) proposed the bill two weeks after his daughter, Gina, lost her quest for his seat in the March 5 Democratic primary. Papan said advertisements by an independent committee of trial attorneys had falsely claimed that his daughter’s opponent, South San Francisco Mayor Gene Mullin, had been endorsed by the Sierra Club.

But Papan insisted his daughter’s defeat had nothing to do with his decision to push for a change in the law. “That’s not the case at all,” he said. “I’m more interested in the whole process.”

Speier predicted that lawmakers will be more receptive this year to campaign finance reform, which has traditionally faced an uphill battle in the Legislature. The passage of major federal legislation, she said, has put pressure on states to do the same.

She said her bill will also be assisted by voters’ rejection on March 5 of a candidate for insurance commissioner who was heavily financed by the industry, Democratic Assemblyman Tom Calderon of Montebello.

“The last election showed us the industry is willing to spend whatever it takes to put one of its own in office,” Speier said. “This practice must end. California consumers must be assured that the office of insurance commissioner is not for sale to the highest bidder.”

In the primary, Calderon collected $1.5 million from insurance interests and was the only candidate who agreed to take their money. He finished third among Democrats.

Speier’s bill, SB 1978, immediately became an issue in the general election race for insurance commissioner. Both the Democratic and Republican candidates hurriedly went on record in support of the ban on contributions.

John Garamendi, the Democratic candidate and the state’s first elected insurance commissioner, appeared with Speier at a news conference Thursday to endorse her proposal.

Gary Mendoza, the Republican candidate, issued a statement calling for legislation that would not only prohibit contributions from the insurance industry but also from personal injury lawyers who sue the industry.

“It’s time to remove any taint of impropriety from the decision-making process at the Department of Insurance,” Mendoza said.

Papan said his measure would also help clean up elections by restricting the actions of independent expenditure committees.

Unlike campaign committees controlled by candidates, independent committees are now unrestricted in the sums they can pour into a campaign and, in many cases, are not required to publicly disclose their expenditures until long after the election. Papan singled out trial lawyers and organized labor as two special interests that ran high-spending independent “shadow” campaigns during the March 5 primary.