Why does Dave Jones need Harvey, Consumer Watchdog and Friends?

Here we go again. Recently Dave Jones announced AAA will lower their rates for customers in Northern California.

Interestingly, Consumer Watchdog posted this news story on the reduction on their YouTube page, touting Prop 103’s role in lowering the rates. However, Jones’ own press release makes absolutely no mention of Consumer Watchdog or Prop 103. No credit, no mention, nothing.

This begs the question: why does DOI need Harvey to intervene in these cases? If their “priority at the Department is to fight for consumers to make sure homeowner insurance rates are fair and company profits are not excessive” as Jones states in the AAA press release, why do they need Harvey and friends at all? What are the taxpayer-funded actuary and lawyers doing over there? Are they so incompetent they need trial lawyers to do their job for them?

What we do know is that once again Harvey and Dave Jones are in bed together. Not only has Jones given Harvey a monopoly on intervener fees, they’re working together to pass an initiative that would force health plans in to their get rich quick scheme.

We’ll be watching.


Hey Harvey– Time to Call the Waa-mbulance!

This morning Consumer Watchdog sent a whiny press release calling the Secretary of State to make a major change to the way ballot measures qualify because they didn’t get the ballot they want. Reminds me of this Bruce Willis gem:

So let’s get this straight.

Consumer Watchdog was treated fairly by a government agency (for all Debra Bowen’s faults, she seems to run a pretty tight and fair elections department even if her website fails far too frequently), got an outcome they don’t like and therefore called for a rule change. Lowering the random sample threshold would make the initiative process vulnerable to fraud and weaken critical protections in the process.

Maybe this is what happens when you’re used to getting what you want from government. It’s clear Harvey and his friends are far too used to sweetheart deals and to getting what they want without question. After all this is the same group who wrote a self-serving provision in to a ballot measure that nets them millions of dollars, often without competition.

And now, they’re trying to do it again. This time at the expense of hardworking Californians who are already saddled with high healthcare costs.

Don’t be fooled- Harvey’s latest initiative isn’t an altruistic attempt to save Californians money. It’s yet another attempt to extract millions of dollars from consumers to pad their cushy West LA lifestyle. Nice try guys.

Yeah, right

Recently, in a hysterical rant on Consumer Watchdog’s blog, Jamie Court claimed Harvey Rosenfeld “made less than $25,000 each year during the last ten years from intervener fees.” Yeah, right. We’re going to call BS on that.

Like we’ve said before, CW collected 100% of the intervener fees awarded by the Department of Insurance last year and has collected at least $7.5 million since Prop 103 passed. In fact, he created a nice monopoly on the intervener business that’s funding his $1.7 million Marina del Ray digs (Harvey, do you keep a wine locker at the Ritz?). In 2008 alone he made at least half a million dollars- we suggest there’s no way Consumer Watchdog paid Harvey that much without using money from intervener fees.   Of course, Court could clear all of this up and open his books to the public, but we already know these “consumer advocate” posers don’t really believe in transparency to taxpayers.

Consumer Watchdog pretends they’re on the side of the consumer but the $7.5 million they’ve collected over the years comes from a fee they get from insurance companies who are forced to pass those costs to the consumer, the very same people they pretend to represent.  They’ve clearly figured out a cozy, get rich scheme: use their political connections to profit and live the Marina del Rey lifestyle.

It’s clear by the tone of the blog that the light starting to shine on Harvey’s scheme touched a nerve. Good. We’ll continue to expose them for what they are: opportunistic trial lawyers profiting off a cozy system they created.

Screaming for Oversight

Wow. This week Insurance Commissioner Dave Jones announced he appointed a “public advisor” to assist “consumer groups with the intervener process.” What exactly will this public advisor do and more importantly, why? Has he finally realized that people are questioning his cozy relationship with Consumer Watchdog? It’s high time the insurance commissioner reaches out to members of the public. If they’re legitimately interested in lower insurance rates they shouldn’t just turn over millions of dollars to Consumer Watchdog.

We know that last year Harvey Rosenfeld and friends pocketed 100% of the intervener fees last year and collected $7.5 million since Prop 103 passed. Like we’ve pointed out before, Harvey and friends inserted a self-serving provision in to Prop. 103 to keep their lavish lifestyles of the rich and famous afloat at the expense of rate and taxpayers.

We also know Insurance Commissioner Jones seems pretty cozy with Harvey and friends. In fact, Dave Jones campaigned with Consumer Watchdog just a few months ago on a measure to increase their access to intervener fees.

And these fees are no small matter. Check out the report from the California Department of Insurance here.  Those are some pretty hefty profits.

This relationship and new position is once again screaming for legislative or journalistic oversight. In fact, last May Senator Juan Vargas called for more oversight after noticing Consumer Watchdog is the only group receiving intervener fee payouts. And yet, no one stepped up.  Who’s watching the watchdog?

Tone Deaf

Who is Jerry Brown’s greatest political adversary these days? 

Molly Munger you say?  Yeah, maybe, but it seems she’s headed to a more glorious defeat in November than the Governor.

Legislative Republicans?  Not really.  They are eager to pass his pension reforms, although he doesn’t seem to care.

Gavin Newsom?  Not yet, but he could be someday.  Unless he finds it easier to just be a TV talker.

No, to find Jerry Brown’s worse political adversary he only needs to look in the mirror.

Jerry’s his own worst enemy.

Walking a perilously difficult path to secure voter approval of his tax increases in November, Brown, often the master of political symbolism, is literally railroading himself out the credibility he needs with voters.

Always infatuated with “big ideas,” Brown’s championing of High Speed Rail will leave voters struggling with the incongruity of committing to billions of new debt while the state flirts with insolvency.

True, voters approved HSR bonds, but that was at a different time and the plan presented to them is not the cost overrun plan of today, nor is the current plan necessarily the “bullet train” voters were promised.

Of additional concern for Brown, should be last week’s Field Poll finding that voters deeply dislike that education bears the force of “trigger cuts” that will go into effect if the taxes don’t pass.  One may say, “but that’s exactly the point, to coerce a vote for the taxes.”  Ok, but it seems just as likely that voters in the Field Poll get the joke and are deeply bitter that the Sacramento politicians appear to be blackmailing them into tax increases.  When was the last time the voters succumbed to the “bastards in Sacramento” as opposed to lashing out against “the bastards in Sacramento”?

Sounds risky.

Brown’s tax measure is perched in the low 50s approval as we hit the dog days of summer.  History suggests that the measure needs to be in the high 50s in order to ultimately pass.

Voters have not passed a tax boost since increasing income tax on high earners in 2004 to fund mental health programs. They have rejected taxes in 2009 (despite pleas from teachers and firemen on TV ads). 

In 2010, they rejected a simple $18 a year car tax to “keep parks open.”  Proponents spent $7 million.  Opponents spent about $60k.

Five weeks ago, even a tobacco tax failed to pass. Why?  Voters had doubts about how the money would be spent.

Doubts could likely doom November taxes as well. Voters will apply common sense.  We’re building train lines to places most people don’t need to go, while threatening to gut education spending unless new taxes are passed.  That sounds screwed up.

If his tax measure fails, Brown will have no one to blame but himself.  His best hope may be to pivot more swiftly than he did during his first term when he ardently opposed Prop. 13 only to become it’s biggest fan the day after it passed.


Today we learned Consumer Watchdog and their buddy Insurance Commissioner Dave Jones failed to qualify their initiative to regulate health insurance for the November ballot.

This failure is an enormous embarrassment to Harvey Rosenfeld and Consumer Watchdog. They contributed at least $600,000 (without disclosing their donors) and used hundreds of thousands of those dollars to collect signatures despite bragging that this was an “all-volunteer” effort.

The initiative’s failure also denies Insurance Commissioner Dave Jones the chance to front a signature statewide effort. He hitched his wagon to Harvey and friends hoping this measure would give him a shot at statewide media, the chance to star in commercials and other trappings ballot measure campaigns in California that would set him up for another run for office.

Like we’ve mentioned before Harvey and friends have a cozy relationship with the Insurance Commissioner that screams for oversight. In fact, they pocketed 100% of the intervener fees last year and collected $7.5 million since Prop 103 passed. Now that the initiative failed will Harvey continue to be the only intervener to collect fees from the Department of Insurance as he has been for the past four years?

Jerry Brown’s Challenging Narrative

Give him credit.  He could be traveling the country giving meandering lectures to college students, but Edmund G. Brown chose instead a career-topper trying to govern the ungovernable state.

Brown bit down on a tough bullet yesterday, having to admit not only that his January budget proposal was loaded with overly optimistic revenue projections, but that the “kick the can down the road” budget he acquiesced to last year also assumed phony revenues that never materialized.

As the sinkhole gets larger, Brown missed his real opportunity last year to push broad-based taxes to the ballot.  He relied on trying to cut a deal with a few GOP legislators instead of doing what he opted for this year…raising money and qualifying a tax ballot measure with signatures

Whether it was miscalculation or dawdling, he’s paying a huge price now for not getting taxes to the ballot last year in a special election, as he promised voters soon after being inaugurated.

Now Brown has capitulated to the left and agreed on taxing upper income levels, even though a week before he cut the deal he was criticizing the policy.

So that gets us to May Revise.  For Brown to credibly ask voters to raise taxes on themselves, he must demonstrate that; a) he truly is an honest broker and b) that he’s providing reforms to voters weary of over a decade of chronically out of whack budgets.

He’s struggling to demonstrate either.

The dramatic expansion of the deficit hurts his chances for voters to perceive him as different than past governors.  Which is a shame.  Brown had a unique opportunity here because he’s a unique political figure and talent, but the chronic dysfunction of the budget process is defining him instead of vice versa.

Secondly, it’s amazing that he’s demanding voters approve taxes from the bully pulpit while essentially abandoning any push for reform, like pension reform.  All GOP legislators have pledged votes for his middle of the road pension reform, but he has brushed aside their willingness to support his own proposal.

Additionally, Brown continues to be mute on job creation. Aside from a few events pushing green technology, Brown has offered no comprehensive vision for jump-starting job creation.  He sincerely wants to pursue reforms, especially to overhaul environmental regs, but he never talks about them.  Unfortunately that means voters hear zip from their governor on jump-starting the economy.

Brown can succeed in getting his taxes passed in November (even if they pass we will still have a huge deficit) but he needs to sharpen his narrative.  He needs to expand his definition of a town crier wailing for taxes while the unemployed and dispirited stare at him with indifference.

Rhetorical optimism isn’t going to get it done.  There needs to be action on the reform and job creation front.

–Rob Stutzman

Getting Cozy

Following up on the apparent cozy relationship between Harvey Rosenfield and Insurance Commissioner Dave Jones, we are hearing that there’s more going on between the two than just Jones’ granting Harvey a monopoly on intervener fees.

A couple sources have told us that Jones is making fundraising calls for Harvey’s insurance rate regulation initiative that he’s trying to qualify for the November ballot.

What could be Jones’ motivation for dialing for dollars for Harvey?  Several things come to mind. For starters, the initiative shifts power away from the governor to Jones’ office, so there’s good old-fashioned empire building.  And of course Jones is a liberal true believer when it comes to regulation. But one can’t help but wonder if Jones has been promised the opportunity to appear in ads this November, paid for by Harvey’s initiative committee.

Again, this relationship (or is it a partnership?) between Jones and Harvey is screaming for legislative oversight let alone some journalistic oversight.

What a Racket

Since January of 2007 Consumer Watchdog pocketed 100% of the state insurance intervener fees and since 2003 they’ve pocketed a cool $6.2 million. What exactly have consumers gotten for $6.2 million? That’s unclear.  In fact, it’s reasonable to assume they’re getting fleeced.

After all, Harvey Rosenfield set himself up for this sweet gig by creating the intervener business in the first place when he inserted this self-serving provision in to a ballot measure several years ago ensuring an indefinite source of income.

Our friend Steve Maviglio put together this great video explaining a little more:

So where’s the accountability? Where’s the audit? Insurance Commissioner Dave Jones enjoys a cozy relationship with Harvey and crew. Is anyone watching him as he hands over millions in intervener fees to Consumer Watchdog?

This might be one of the most suspicious rackets in government.  This relationship between Jones and Harvey and the commissioner’s ability to keep granting huge fees to Harvey et al is ripe for legislative inquiry.

Any why exactly does Jones need to keep granting intervener fees to Team Harvey and no one else? Is he protecting Harvey’s filthy monopoly?  Or better yet, why are interveners always needed?  Can’t Jones do his job without them?

This whole scenario screams for oversight.  We know from history that if no one is keeping an eye on the Department of Insurance the commissioners can get themselves into some shady situations with the money they control.

Who benefits?

Last week week Jon Healy of the Los Angeles Times defended Consumer Watchdog’s shady ways. What he didn’t tell you is that his former colleague and boss Judy Dugan now works for Harvey and friends at Consumer Watchdog where she benefits from their self-serving hypocrisy.

Jon Healy mentions Harvey’s self-serving provision he wrote in to Prop 103, saying:

“Over the last decade, Consumer Watchdog has intervened in numerous proposed rate increases, prevailing in many of them. Jamie Court, the group’s president, said those activities have generated about $2.5 million for the group over the last decade…”

What he doesn’t mention is that according to the Department of Insurance website only Consumer Watchdog is getting intervenor fees during the last four years (2008-2011). The total during this period? $4.85 million. And don’t be fooled by their rhetoric– they aren’t doing this on behalf of the consumer. Consumer Watchdog has no actual consumer members. Who’s benefiting? Harvey Rosenfeld who made nearly half a million dollars in 2008.

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