Watchdog-or special-interest lapdog?

Consumer Watchdog, a self-styled consumer group, is calling on the state Fair  Political Practices Commission to require political bloggers like me to  reveal our clients, something we already do. At the same time, Consumer Watchdog  refuses to disclose the sources of its financial support.

One source of Consumer Watchdog’s financing is public record. Consumer  Watchdog sprang from the loins of Voter Revolt, which gave us Proposition  103 and auto insurance reform in 1988. Organizations created by Prop. 103 author Harvey  Rosenfield have collected $7.8 million in intervenor fees since his measure  passed, including $2.4 million in 2009 alone.

No other group has received any of these fees in years. (It’s not clear why  consumers need intervenors when there are lawyers, actuaries and analysts at the  state Department of Insurance to protect our interests.) Meanwhile, Rosenfield  has paid himself millions of dollars through nonprofits, including one  organization whose only grant, according to IRS records, is a grant to another  one of his organizations.

More recently, Consumer Watchdog pushed legislation that would regulate  health insurance rates at the state level even though the federal government  plans to do the same thing – with one critical difference. Federal law doesn’t  pay “intervenors,” so Consumer Watchdog wrote a state law that promises juicy  intervenor fees in California.

When lawmakers insisted on auditing their fees, Consumer Watchdog backed off  and put the law on the ballot instead, betting that high health care costs will  cause voters to overlook Consumer Watchdog’s self-interest. Curiously, Consumer  Watchdog spelled out the rate regulatory process in excruciating detail, but it  would adopt the intervenor program by statutory reference. If you know what  Section 1861.10 of the California Insurance Code is, you’ll be an informed voter  in 2014.

Their sneakiness is not surprising to those who have been asking Consumer  Watchdog for years to reveal the source of their financial backing.

If voters have learned anything over the years, it’s to look under the skirts  of those who write ballot measures and spend millions to pass them. Their  motives are key to a realistic understanding of the likely consequences of a  measure’s passage or defeat.

There’s no guarantee Consumer Watchdog’s scheme will work, but there’s no  doubt the measure would provide them with a revenue stream without  any transparency.

It’s no wonder the group – which strongly opposed President Obama’s  Affordable Health Care Act – is fighting so hard to regulate health insurance  rates. With auto accidents

dropping and health care costs rising, Consumer  Watchdog’s lawyers need a new profit center, and health insurance is the  logical choice.

To be sure, reducing insurance costs is important. If the Legislature is  serious about it, ending the failed intervenor experiment is a place  to begin.


Steve Maviglio is a Democratic strategist  in Sacramento.

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