Capitol Alert

California Democrat halts fundraising amid scrutiny into donations from industry he regulates

California Insurance Commissioner Ricardo Lara speaks to an overflow crowd at a town hall meeting in Grass Valley, Thursday, August 22, 2019, to address the concerns of local residents after a rise in homeowners insurance premiums and non-renewal letters due to recent California wildfires.
California Insurance Commissioner Ricardo Lara speaks to an overflow crowd at a town hall meeting in Grass Valley, Thursday, August 22, 2019, to address the concerns of local residents after a rise in homeowners insurance premiums and non-renewal letters due to recent California wildfires. jpierce@sacbee.com

California Insurance Commissioner Ricardo Lara is halting fundraising while his staff reviews how he vets contributions from the industry he regulates, according to a letter he sent to consumer advocates on Tuesday.

Lara, a Democrat and former state lawmaker, has faced scrutiny in recent months for accepting more than $50,000 from industry executives in April, with most of the money coming from out-of-state donors.

Lara then admitted to meeting in May with the CEO of Applied Underwriters, a workers’ compensation agency with pending matter before the department.

Lara in a letter addressed to three advocacy organizations that he violated a campaign pledge not to accept contributions from the insurance industry.

“I believe effective public service demands constant adherence to the highest ethical standards,” Lara wrote. “But during my campaign and first six months in office, my campaign operation scheduled meetings and solicited campaign contributions that did not fall in line with commitments I made to refuse contributions from the insurance industry. I take full responsibility for that and am deeply sorry.”

Lara had designated himself as his own 2022 reelection campaign treasurer. Usually, a campaign treasurer manages accounts, tracks donations and weighs political consequences of accepting money from certain donors.

Lara has since appointed Denise Lewis of River City Business Services to fill that role, his campaign said. Finance records reflect that he’s also returned the industry-connected contributions.

Lara promised to increase oversight of future donations and said he terminated his “longtime contractual relationship” with unnamed fundraising personnel. He also said he placed a “strict moratorium” on fundraising activity for his reelection campaign until “at least” the end of the year and tasked department attorneys with increasing oversight of scheduled meetings with stakeholders.

“I am implementing rigorous vetting protocols and am retaining experts to develop new processes for the screening and reporting of all outside political activity – to ensure greater transparency and no direct connection to the insurance industry or department-regulated entities – consistent with best practices,” he pledged.

Lara’s tone in the letter contrasts with his remarks he made previously defending his meetings and the decisions he made in cases before his department.

“I meet with CEOs all the time with insurance companies,” he previously said in an interview with KQED. “In the six months that I’ve been in office, I’ve met with CEOs, I’ve met with consumer advocates, I’ve met with fire victims. If you’re asking me if I met with the CEO of Applied Underwriters, I did. I met with him.”

His department also previously denied requests to make his calendars and meeting scheduled public, though Lara reiterated in his letter that he planned to release those records on a regular basis.

In closing, Lara said he would “renew” his commitment to more principled behavior and reconfirmed his promise to fight the wildfire insurance crisis in California, mitigate declining property taxes and home values and combat climate change.

“Even though no laws or rules were broken – and these interactions did not affect nor influence my official actions in any way – I must hold myself to a higher standard. I can and will do better,” Lara wrote. “These failures are not consistent with my personal values nor my long career in public service.”

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Hannah Wiley joined The Bee as a legislative reporter in 2019. She produces the morning newsletter for Capitol Alert and previously reported on immigration, education and criminal justice. She’s a Chicago-area native and a graduate of Saint Louis University and Northwestern.
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