Lining Their Pockets

In Sunday’s Sacramento Bee, Dan Morain  (you can read the whole thing here) took note of Consumer Watchdog’s self-interest in promoting ballot measures that line their pockets with money. In his column, Morain explains how Consumer Watchdog has made millions of dollars of the intervenor process that they created in Prop. 103, and asks the exact question we’ve been asking for months:

“But if intervenors are needed to protect consumer interests, why exactly do we have an elected insurance commissioner? The answer, of course, is that Proposition 103 created the elected insurance commissioner.”  

Like we’ve said, Harvey Rosenfeld, Jamie Court and friends have collected at least $5.3 million since 2007 and, as Morain said, “no other organization has collected a dime in intervenor fees since 2008.”

Why aren’t other organizations able to intervene? What knowledge and “expertise” is Consumer Watchdog providing that apparently the Department can’t or won’t?

As Morain points out another organization, Greenlining, tried to apply for intervenor status but were rejected without explanation. Why is this system rigged for Harvey and his band of west-side royalty?

Who oversees this cozy relationship? To the best of our knowledge, no one. It’s encouraging to see the media starting to pay attention but we’d bet there’s more to the story.

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Why Interveners?

California Watch published a long and comprehensive look at Consumer Watchdog’s “domination” of their self-created intervener program at the Department of Insurance. The article is worth a read. We’re not kidding about their domination. The piece says, “Since 2008, only one other group has attempted to dispute insurance rates, state filings show… but regulators denied them each time.” Read the article here.

We’ve written a lot about Consumer Watchdog’s cozy relationship with the Department of Insurance, but one line in the story jumped out at us. According to the article Department of Insurance general counsel Adam Cole said, “Consumer Watchdog, they are on one end of the spectrum, the insurance companies are the other,” he said. “They sort of frame the debate.”

That quote seems awfully cozy. Why does the Department need someone to frame the debate? And why Consumer Watchdog? What makes them better candidates to analyze rate cases than others? Why is the department  paying Consumer Watchdog hundreds of thousands of dollars for actuary analysis and lawyers when they have more than enough staff  to devote to those exact tasks? It seems the only thing Consumer Watchdog’s self-created intervener process does is enrich its founders (who, in the article, brag about their ability to make money).

And, it seems the scheme is paying off. California Watch also reported, “Since 2011, under Commissioner Jones, Consumer Watchdog has gotten what it requested in every case except two – an overall deduction of 1 percent.”

Like we’ve said before, this screams for oversight.

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