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Both Democratic candidates for insurance commissioner have promised not to take campaign donations from the industry that one of them will soon be regulating. Despite that, insurance money has seeped in.
Political action committees that operate separately from the official campaigns have poured more than $6 million into the race, including what was spent on the June primary. That’s a record high for the contest for this position, which is responsible for regulating the state’s property and casualty insurance market.
These PACs have spent about $3.2 million to support state Sen. Ben Allen, and some of their funders include companies from the insurance industry. Those same groups have spent more than $1.5 million to oppose his opponent, Jane Kim.
In the past week, bail bonds insurers made three donations of $10,000 each to a committee supporting Allen, campaign finance records show. Another entity that appears to be connected to the bail bonds industry donated $9,500. And a health insurance PAC donated $48,000 to the same committee, bringing the number of insurance-related donations to five as of Friday.
“I didn’t ask for this and don’t welcome it,” Allen told CalMatters.
Outside groups called super PACs can spend an unlimited amount of money to push their point of view through “independent expenditures,” as long as they do not coordinate with the candidate’s campaign, the result of a Supreme Court decision known as Citizens United.
That also means that the candidates cannot return the money like they can if they receive a contribution directly to their campaign. With Kim and Allen questioning the source of donations to the super PACs that have spent money in the race, CalMatters looked at who has donated to the committees that have supported or opposed each candidate.
Other companies that have donated to groups spending to support Allen include investor-owned utilities such as Southern California Edison and Pacific Gas & Electric.
Allen said his vow not to take money directly from the insurance, utility and fossil fuel industries still stands, but his opponent is raising an alarm.
“The contributions that come in are a reflection of what the (insurance) industry believes is the best outcome for them,” said Kim, the former San Francisco supervisor. “These contributions are an investment in him and themselves, not for consumers.”
Thomas Holyoke, a political science professor at California State University, Fresno, agrees. He said donors will expect some kind of access.
“This is what creates cynicism in our politics today,” Holyoke said, referring to the campaign finance system. “This is why people don’t trust elected officials. That’s bad for democracy.”
Early on in his campaign for commissioner, Allen returned some direct insurance industry donations that he said were mistakenly transferred from an old campaign account into his account for this race. During a debate between the two candidates this month, Allen said even though he has taken insurance industry money in the past, he has a track record of consumer advocacy and of holding industries accountable.
“I have taken on the insurance industry directly,” Allen said at the debate. “I’ve run bills against them and won, gotten them just signed into law.” One of those laws boosts the commissioner’s ability to make insurers fix problems the Insurance Department finds after an investigation.
Allen also pushed back against a failed effort to reduce utility industry liability for wildfires they cause; he opposed an effort to take away insurance companies’ right to recoup their costs from utilities, which could affect Californians’ insurance costs.
Kim said at the debate that for this race, she has not taken insurance industry money directly, nor has she accepted corporate PAC donations, which she called an “important distinction” between her and Allen.
Kim’s campaign website has a section that details insurance-related donations to both candidates throughout their careers; she said at the debate that donations she received from individuals who work in the insurance industry are different from Allen receiving money from insurance companies. She said she has not taken checks from insurance carriers or their PACs.
Jamie Court is president of Consumer Watchdog, the advocacy group whose founder wrote Proposition 103, which voters approved in 1988 and governs insurance law in California. The law made the commissioner position an elected one.
Court, who opposes Kim’s plan for public disaster insurance but says his organization is “publicly agnostic” on the race, said “insurance companies should not be allowed to influence this race, and they haven’t yet, as far as I know.”
He called the bail bond industry money donated to the super PAC supporting Allen a small amount that he described as coming from a “rogue element” because he said Big Insurance has largely stayed out of this race.
“A few bail bonds donations shouldn’t convince anyone,” Court said. “I honestly think they’ll both be impartial and listen to reason.”
Meanwhile, the outside spending to support Kim totals more than $958,000, much of it from the left-wing California Working Families Party. Kim led the organization until earlier this year, when she decided to run for commissioner.
“This isn’t some independent group that happens to like her,” said Joe Arellano, spokesperson for Allen’s campaign. “It’s her own political operation spending on her behalf.”
Kim’s campaign rejected any insinuation of illegal coordination.
“(Working Families Party) has a strict firewall between their independent expenditure and coordinated activities,” said Catie Stewart, spokesperson for Kim’s campaign. “We have no idea who makes their (independent expenditure) spending decisions, because we don’t talk to anyone on that side of that firewall.”
Donations to the party’s PAC come mostly from individual donors and labor groups. Its biggest donors include Patty Quillin, wife of Netflix co-founder Reed Hastings; philanthropists Wayne Jordan and Quinn Delaney, who own a real estate development firm; and PACs for the National Union of Healthcare Workers and United Domestic Workers of America.
Donations to the outside PACs spending money on Allen’s campaign or against Kim’s campaign also include Google co-founder Sergey Brin; Facebook parent company Meta; a California Business Roundtable PAC; and crypto billionaire Chris Larsen, who gave to three different committees for a total of about $3.5 million, making him the single largest individual outside contributor in this race. These same tech and business donors are spending big on other races in the state, some of which also pit Democrat vs. Democrat.
Both candidates are endorsed by unions, and some of their top direct donors are labor groups. Allen’s donors include the California State Council of Laborers, a lobbying group for public service workers, and the Southern California District Council of Laborers, an advocacy group of a dozen unions. Kim’s include the California Nurses Association, the California School Employees Association and the California Teachers Association.
Other top direct donors to Allen’s campaign include the California Democratic Party, which endorsed him. The California Labor Federation endorsed Kim and is one of her top direct donors.
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