Regulator investigating insurance companies that paid Lara’s campaign $122,500 after source nondisclosure lawsuit filed, says Consumer Watchdog

LOS ANGELES, May 31, 2022 /PRNewswire/ — Seven insurance companies contributed $122,500 to the LGBTQ caucus, which in turn spent the money on an independent spending campaign to re-elect Ricardo Lara as insurance commissioner without disclosing the source of the donations.

The nonprofit organization Consumer Watchdog filed a complaint with the Fair Political Practices Commission (FPPC) alleging that the contributions violated state prohibitions against money laundering and the disclosure of earmarked contributions. The FPCC responded that it had opened an investigation into the allegations.

“Lara and her coordinated EI committees are violating one of the most serious provisions of the Political Reform Act (“Act”) by laundering campaign funds without disclosing the true source of contributors,” the complaint filed by the executive director by Consumer Watchdog Carmen Balber declared.

Read the complaint here.
Read the FPCC letter here.
The investigation was first reported by the San Diego Union Tribune.

Lara has pledged not to accept contributions from the insurance industry, and those insurance company contributions appear to be laundered through the LGBTQ caucus to hide their true source, Consumer Watchdog said.

Lara, as the former Vice Chair of the LGBTQ Legislative Caucus and current ex-officio member, was in a position to influence contributions. The complaints noted that almost no insurance contributions were made to the LGBTQ caucus before Lara ran for insurance commissioner in 2018.

“As you know, the FPPC Bylaw lists Common Agents and Consultants as triggering a presumption that coordination is in progress (FPPC Bylaw 18225.7). Here, Lara continues to serve on the board of the LGBTQ caucus, and the board’s PAC is l “entity that channels insurance industry contributions to the Lara IE committee,” the complaint states.

Ricardo Lara has a well-documented history of seeking and accepting campaign donations from the industry it regulates, including contributions made on behalf of relatives of industry executives ostensibly to disguise their true source,” the statement continued. complaint.” After Lara was forced to return these contributions due to media scrutiny, her supporters in the insurance industry are now laundering these contributions through the LGBTQ Legislative Caucus. These illegal contributions fund direct-to-the-public campaign communications in support of Lara’s re-election bid without disclosing the insurance industry as the source of the contributions.”

Consumer Watchdog has consistently worked to expose and discourage insurance company campaign contributions to candidates for Insurance Commissioner because of the conflicts of interest they create. The group created a Quack-O-Meter to chart how the donations of insurers from the insurance commissioner candidates compared to the millions received by the disgraced former commissioner Chuck Quackenbush.

“These contributions were made to Ricardo Lara IE on the same day and for a total amount virtually identical to the insurance industry’s total contributions to the LGBTQ Caucus Committee,” the complaint states. “Immediately upon receiving these funds from Lara’s LGBTQ Caucus, Lara IE then spent $199,866 on campaign communication advertisements and $40,000 on the polls in favor of Lara’s re-election. These expenditures were made on May 12, 2022just 6 days after receiving funds from the LGBTQ caucus.”

“The short timeline and similar dollar amounts raise the specter of the LGBTQ caucus, or Lara, coordinating with the IE committee regarding these communications.”

“For the state insurance commissioner to benefit from campaign funds laundered by the industry he regulates following a public scandal where he was publicly shamed for accepting such contributions is a very serious violation. grave state campaign ethics rules. The public is entitled to accurate information about the true source of these contributions.”

Laws and regulations violated

Government Code Section 84301 – Money Laundering Campaign – Ricardo Lara or the LGBTQ Caucus Committee coordinated insurance company contributions to the LGBTQ Caucus Committee and then to the Lara IE Committee, which did not disclose the true source of the contributions.

Government Code Section 83116.5 – Aiding and Abetting a Violation of the Political Reform Act – Lara or the LGBTQ Caucus Committee aided and abetted the campaign’s money laundering scheme by facilitating the movement of contributors’ campaign funds of the insurance industry without disclosing the true source of the contributions.

Government Code Section 84203 and 84203.3 – Ricardo Lara and Ricardo Lara for 2022 Insurance Commissioner – Failure to Report Contributions – If Lara demanded contributions from the LGBTQ Caucus Committee to the Lara IE Committee, the May 12, 2022 the committee’s expenses were, in effect, in-kind contributions to its candidate-controlled committee, Ricardo Lara for the insurance commissioner 2022. In this case, Ricardo Lara and his campaign committee, Ricardo Lara for the 2022 Insurance Commissioner, did not report contributions to his Insurance Industry Campaign Committee. Lara’s committee did not report these contributions within 24 hours, as required.

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SOURCE Consumer Watchdog

Kristan F. Talley