- This Week
How PG&E and Mercury Insurance are spending millions to try to trick Californians into voting for corporate interests
GUARDIAN ILLUSTRATION BY DEVON DOSS
John Geesman, a former member and director of the California Energy Commission, raised the possibility that if the utility is able to amass so much funding for a ballot initiative, its rates are too high. "The indisputable truth is that PG&E's rates are set by the CPUC to provide capital to invest in needed infrastructure. If rates are so generous that PG&E can create a $35 million slush fund for political adventurism, something is seriously wrong."
Indeed, Sup. Ross Mirkarimi, who shepherded the creation of this city's CCA, Clean Power SF, told a recent Harvey Milk Democratic Club forum that the campaign raises larger concerns about corporate power.
"Know what? If we're gonna lose, we go down as warriors. And if we win, then we win not for San Francisco or Marin, but we win to address the very fact that Washington is not moving in the direction we would like addressing climate change," Mirkarimi said. "The complete corporate hubris and arrogance in that they think they can continue to operate in the way that they have is unimaginable."
The people representing these corporations and their front groups, such as Cal-FAIR director Kathy Fairbanks, stressed to us the "broad coalitions" that support their measures. Those coalitions include "consumer groups" such as Consumers First and Consumer Coalition of California — each which seem to be comprised of only single individuals that back business-friendly measures each election.
Fairbanks defends claims that Prop. 16 would lower rates for most Californians, citing state figures that 80 percent of drivers in the state have continuous coverage and therefore could quality for the discount even if they change carriers to a provider like Mercury that generally offers lower rates than many of its competitors.
And while she grudgingly acknowledges that premium discounts for some are always offset by increases for others, she said the measures would create more "competitive markets" that would cause insurance companies to lower costs and decrease rates across-the board. "They're going to do whatever they need to do to get more customers," she said.
Asked whether Mercury's bad reputation, and the difficulty many voters will have in believing that they're spending millions of dollars to lower the premiums they collect, hurt the campaigns chances of winning, she said, "Voters are not going to do anything more than read the measures and vote in their interests."
Rosenfield agreed that this campaign could turn on who can convince voters where their interests lie. "Here's the issue in a nutshell: will California voters be duped by a $20 million insurance initiative campaign in which the insurance company has to hide behind a phony front group?"
After Prop. 17 qualified for the ballot last year, the struggle to defeat it moved into the office of Attorney General Jerry Brown — who is running for the Democratic Party nomination for governor — and again Rosenfield was frustrated by the unwillingness of powerful Democrats to challenge Mercury Insurance.
The Attorney General's Office writes the ballot title and summary for all initiatives. Given the complexity of insurance law and attractiveness of claims by proponents that the measure would save consumers money ("as much as $250 per year" for "your family," proponents claim in their ballot arguments), the language of the summary could decide the outcome of the election.
Initially, last August, the AG's office summarized the measure as "allows insurance companies to increase or decrease the cost of auto insurance based on a driver's coverage history," something that seemed to accurately capture what it would do.
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