Two Great Distastes That Go Great Together: The Los Angeles Times on the Governor and the Insurance Industry

There are at least two California institutions to which the Los Angeles Times has shown consistent antipathy: Governor Arnold Schwarzenegger and the insurance industry.  Imagine, then, the pleasure in at least some journalistic circles when the Times was able to publish an article in this past Sunday's edition with the headline:

Insurers Liking the Coverage of Schwarzenegger's Policies

The stated premise of the article appears in its opening sentences:

With a onetime State Farm official and a former insurance lobbyist in top staff jobs, Gov. Arnold Schwarzenegger is repeatedly siding with insurers in legislative battles as they maneuver to fend off fees, fines and concessions to policyholders.

A veteran insurance lobbyist, Dan Dunmoyer, is now the governor's deputy chief of staff, helping to craft his entire policy portfolio.  Former State Farm official Kathleen Webb is Schwarzenegger's insurance advisor, vetting insurance-related bills that reach his desk and recommending which he should sign into law.

The unexamined assumptions in those sentences, and throughout the article, are many.  Chief among them is that anything the insurance industry favors must be, by definition, against the public interest, or at least counter to the interest of "consumers."  After all, if there were nothing inherently threatening to the greater good in positions favored by insurers, the fact that those positions are (ostensibly) receiving a sympathetic hearing in Sacramento would not be cause for alarm.

The article as a whole is less a piece of reporting than it is an exercise in innuendo and opinion couched as reporting.  Perhaps the most glaring example appears in this single-sentence paragraph midway through:

Now Schwarzenegger has elevated insurance interests to senior levels of his government, giving them too much influence, in the view of consumer groups.

Certainly, it is not "news" that self-styled consumer groups would hold that view.  What would be news, and what is notably absent from the article as a whole, would be actual evidence that insurance interests are being favored, if at all, for reasons other than the Governor's well-known general inclination to favor a broad range of pro-business positions.  Schwarzenegger was elected as a Republican, after all, albeit not a rigidly conservative one.  It is not to be expected that he would fill his advisory posts with actively anti-business personnel.

What hard evidence does the Times offer for its essential premise that insurance industry influence in the Governor's office crosses the line to become "too much" influence?  Very little:

• When insurance-related bills have come to him, the Governor "has sided with — or at least not opposed — the industry nearly nine times in 10, a review of 56 bills tracked by insurance groups shows."  The details of those 56 bills are not provided; a sidebar identifies only 6, and a seventh is referenced in the body of the article.  The Times itself thus omits "nearly nine in ten" of the bills that it considers evidence of the Governor's pro-insurer bias, but nonetheless concludes (in the introductory sentence to that sidebar) that the Governor "has overwhelmingly sided with the insurance industry on legislation affecting it."  (Emphasis added; hyperbole in original.)

• Incidentally, of the 7 bills actually identified in the article, most came to the Governor's desk before the elevation of the insurance-related officials mentioned in its opening paragraph.

• Consumer advocates complain on the one hand that they have not been included in the consultative process.  They concede, however, that they really haven't tried to be included.  They say they have "'seen no point'" in contacting the Governor's insurance adviser, for example, because "'it's assumed that under this administration'" their influence won't be felt.  Alternatively, they insist that it is not their place to take the lead in seeking to be heard -- to send in their own lobbyists to counter industry lobbyists -- and that they are entitled to be the recipients of "'outreach'" from the administration.

• Insurance industry expenditures on lobbying and on contributions to the Schwarzenegger reelection campaign are mentioned, but no evidence is supplied in support of the unspoken premise that those expenditures are buying undue influence.  Insurance interests are reported to have contributed $4.4 million to the Schwarzenegger campaign -- since he announced his candidacy in the recall election of 2003.  An impressive number, to be sure, but many questions about it are left unanswered, such as: (1) How does it compare to the contributions from any other industry or group?  (2) How much are the consumer groups, and others, contributing to Schwarzenegger opponents?  In other words, is there something about the insurers' contributions that have gained them more influence than comparable contributions?  What is there to show that insurers' special interests are now "more special" than others?

• To place that $4.4 million figure in perspective, consider that just one man and his immediate family -- Sacramento real estate developer Angelo Tsakopoulos -- contributed nearly twice that much -- $8.7 million -- in the recent Democratic gubernatorial primary in support of the eventual nominee, current state Treasurer Phil Angelides.  Many believe that Tsakopoulos' expenditures made the difference in Angelides' battle with Democratic rival Steve Westly.

• The one vetoed bill that is discussed at length in the article seems to have been selected so as to portray insurers, and the Governor, as cold and heartless sorts who single out good-deed-doers for particular abuse:

Terry Tillery earns $10 an hour working for a state program aimed at helping sick and elderly people remain in their homes.  The Sacramento resident cares for three patients, driving her 2000 Ford minivan to supermarkets and drugstores for food and medication.

One day in 2004, she got a letter from her auto insurance company: Her rates would be going up.  Her job put her in the same commercial category as a pizza delivery driver, her insurer said, making her a higher-risk driver.

Tillery said she told her insurance company, 'I don't speed.  My driving record is good, and I haven't had any tickets in the last 14 years.'

Assemblyman Gene Mullin (D-San Mateo) offered a bill last year that would have barred insurers from raising rates in circumstances like Tillery's. Among the measure's opponents was the Assn. of California Insurance Cos., which represents 300 property-casualty firms.

Lawmakers passed the bill, but the governor vetoed it. If rates dropped for these workers, his veto message said, echoing arguments made by insurers, then other motorists would be forced to pay more.

The bill in question -- AB 778 [PDF] -- amended Insurance Code section 11580.1, the statute specifying the provisions that are either mandatory or prohibited in every automobile policy in the state, to prohibit treating vehicles used in the single state program employing Ms. Tillery as "a common carrier, livery or for-hire vehicle".  That is, it singled out some drivers traveling about and making pick-ups and deliveries in their vehicles in a business and declared that they could not be treated in the same way as every other driver engaging in those same activities and exposing themselves to the same inherent risks in their businesses.  While the Governor's veto can be characterized, as it is by the Times, as showing favoritism to a position favored by insurers, the bill itself can be characterized as compelling the insurers to show favoritism to a small subset of their policyholders.  The interests on both sides are arguably "special."  Governors always favor one interest over another in signing and vetoing legislation; that the Times would obviously favor a different interest than the Governor did is not particularly compelling evidence of the sort of sinister dealings the article tries so hard to suggest.

No matter who is in power at any given moment Sacramento is just like any other state capitol, a bubbling brew of competing policies each with its own advocates.  Every group believes that only its view is the "right" one and there is always a tendency to assume foul play when another group gets its way.  Sometimes, foul play really is at the root of things and a particular group's influence on its favored issues becomes "too much" influence.  Newspapers such as the Times can and should seek out those instances and expose them.  Even under the loose evidentiary standards of investigative journalism, this article simply does not make its case.

~~~

UPDATE: Mike the Actuary comments and raises the interesting question of whether Governor Schwarzenegger's alleged fondness for insurers acts as a counterweight to the well-known hostility of outgoing Insurance Commissioner John Garamendi toward the industry.  I have an update on the race for Insurance Commissioner in the works, and I will try to address some of Mike's points in that context.

Comments

[Kevin O'Reilly]

While this story may not have done a good job of it, one reason why reporters tend to favor the "undue influence" storyline is that it is purportedly objective. To explicitly say that the governor has made the wrong decisions on insurance bills would be outright opinion, a no-no in straight news reporting.

But if it can be couched in terms of "undue influence" then it's more passable. In this case, the story doesn't even appear to pass muster on that front but that's the genesis, generally, for this type of approach.

[wavemaker]

We get this type of reporting at the Boston Globe and Boston Herald all the time. Every place a targeted politician eats or stays is "posh" or "swank." The adjeectives are always meant to imply some degree of nefariousness. It would be sickening if it weren't quite so obvious.

BTW, wouldn't a bill that treated in-state carriers differently than inter-state carriers be in violation of the Commerce Clause?