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Sacramento Update || Washington D.C. Update || Columnists & Editorials

Insurer may have violated law, report reveals
State officials said the report uncovered 25 issues or questionable practices by Mercury, seven of which remain unresolved
By Carla Marinucci, San Francisco Chronicle
A high-profile California insurance company that is backing a controversial insurance measure on the June ballot has engaged in practices that may be illegal, including deceptive pricing and discrimination against consumers such as active members of the military and drivers of emergency vehicles, according to a state report obtained by The Chronicle. The report, obtained through the state Public Records Act, alleges that Mercury Insurance Group may have violated Proposition 103, the landmark consumer protection law approved by voters in 1988. The measure limited the cost of policies and made civil rights and antitrust laws apply to the insurance industry. The 275-page report by the state Department of Insurance was authorized for release by Insurance Commissioner Steve Poizner. The documents, which cover the firm's practices from the mid-1990s to 2004, are the state's most recent completed investigation of the company. In its reporting, the state found evidence that Mercury may have violated state laws by: Flagging some consumers for higher rates if they had been in an accident, even if it was not their fault; Not immediately granting coverage to applicants including military personnel on active duty, "artists," those employed "in the entertainment industry as actors, dancers, etc.," and emergency vehicle drivers; Raising insurance premiums after its sales agents quoted prices for discounts for which the consumer was not eligible. The department said this was the single largest category of complaints it received about the firm; Collecting higher premiums than allowed by law by requiring its brokers to return part of their fees to the company; and Requesting information about customers' "national origin," a practice that the department said "could raise questions about the legality of Mercury's personal automobile policy cancellation and non-renewal decisions" under state law. Mercury agreed to block such data after the state investigators raised concerns. State officials said the report uncovered 25 issues or questionable practices by Mercury, seven of which remain unresolved.

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Dan Lungren
Betrayed
Voters


3rd Congressional District gas price watch:

When this man was elected to Congress, gas was $1.43 a gallon!



Recent price:

$3.05 gallon

Ask yourself why?

Prison Scandal...










Reader reaction...

"Mr. Kelso belongs in a mental institution himself. He is mentally ill if he thinks the Taxpayer needs to spend $96,000 annually on each of these slimeballs. Mr. Kelso is the epitomy of a power-drunk bureaucrat."




In the Governor's office:

Governor pledges to help community of Paradise Valley
By Tim Traeger, San Bernardino County Sun
Surrounded by a cadre of federal, state and local officials, Gov. Arnold Schwarzenegger toured the flash-flood-ravaged community of Paradise Valley on Sunday morning, promising to speed aid to the beleaguered community. After exiting a black SUV, the governor, with Rep. David Dreier, R-San Dimas, Supervisor Michael Antonovich, state Assemblyman Anthony Portantino and La Ca ada-Flintridge Mayor Laura Olhasso, trekked through the mud of Manistee Drive, witnessing first-hand the destruction from Saturday morning's deluge. At least four inches of rain pounded already saturated hillsides denuded by last year's 160,000-acre Station Fire, leading to mud and debris flows that damaged or destroyed at least 30 homes in this tiny community. As he came upon Karineh Mangassarian's home at 2002 Manistee, the governor paused to give his condolences and offer a hug to the woman whose house was buried almost to the roofline in debris. She had been up all night. As Schwarzenegger left, Mangassarian wasn't awe-struck by a visit from the governor, saying she just wanted to know how she was going to be able to deal with the mud and rocks that had overtaken her home of eight years. "I don't care that much about the governor," she said. After the nearly 20-minute tour, the governor addressed reporters on the corner of Ocean View Boulevard and Derwood Drive, but the sign marking the intersection had been swept away along with parked cars and 4,000-pound K-rails. "I'm responding to the disaster so I can assess the damage and act if there are any needs," he said. "We will help with federal and state permits to help people rebuild. After the rainstorms of two weeks ago, we thought we would be out of the woods. But the latest rain brought fantastic damage."

In the Legislature:

State ends free mammograms; cuts to be protested
By Jim Steinberg, San Bernardino County Sun
Women's health advocates, health care professionals, breast cancer survivors and consumers will be in Sacramento today to discuss and protest cuts to the statewide Every Woman Counts program, which provided free mammograms to underserved women. On Jan. 1, the state suspended the mammograms for new patients until July. When services are reinstated, the program will no longer screen women ages 40 to 49. The Assembly Budget Committee will meet Monday to find out why revenues are falling on Proposition 99 tobacco tax revenues, which funds the program, said the committee's chairwoman, Assemblywoman Noreen Evans, D-Santa Rosa. Of particular concern is whether there will be funding to resume the mammography screening on July 1, she said. "Too much of the state's cuts has been on the backs of women and children," she said. Although reductions to this program do not directly save state revenues, they will ultimately increase costs for Medi-Cal as cancers are found at a more advanced stage, Evans said.

Campaign and election news:

Whitman putting her money where her campaign is
By Phillip Matier and Andrew Ross, San Francisco Chronicle
Republican gubernatorial candidate Meg Whitman talks a lot about how politicians need a "new attitude" when it comes to excessive spending - but apparently not when it comes to the former eBay exec's own campaign spending. According to campaign records, Whitman spent $294,103 in 2009 on charter jets to shuttle her to meetings, appearances and fundraisers at such locations as the five-star Hotel Bel-Air in Beverly Hills, the Lodge at Torrey Pines in La Jolla (San Diego County), and the Princeton and Harvard clubs in New York. In all, Whitman spent $526,015 on fundraising events, including $12,252 on star chef and caterer Wolfgang Puck. Another $311,000 was shelled out for meetings and appearances, including $22,698 to Hartmann Studios - the same high-tech theatrical outfit that Gov. Arnold Schwarzenegger used for his "shock and awe" campaign stunts. And when it comes to her campaign bureaucracy, you couldn't get much fatter. On the other hand, Whitman's equally wealthy Republican rival, Steve Poizner - who flies Southwest - spent $1.5 million on consultants, $151,000 on his Web site and $65,000 on personal appearances and fundraisers. Aides to Whitman, who is running 30 points ahead of Poizner in the polls, make no apologies for their gold-plated spending. "We have a budget designed to win in the June primary and to build a top-quality campaign on every level, and we will continue to do so," said campaign spokeswoman Sarah Pompei.

Welfare issue becomes a hot issue in governor's race
By Ken McLaughlin, San Jose Mercury News
Three decades after Ronald Reagan catapulted the catchphrase "welfare queen" into the political lexicon — and 14 years after President Bill Clinton helped "end welfare as we know it" — welfare has suddenly become a steamy political issue in the California governor's race. GOP candidate Steve Poizner, the state's insurance commissioner, first raised the issue in October, declaring that welfare should be a "transitional assistance program, not a permanent way of life." And last month Poizner's opponent, former eBay CEO Meg Whitman, made welfare reform the subject of her first ad focusing on a single policy issue. In the radio spot, Whitman picked up on a statistic also used by Poizner: California is home to 12 percent of the nation's people but more than 30 percent of its welfare recipients. Nobody disputes the figures. And they're often cited by Gov. Arnold Schwarzenegger, who for years has proposed major changes in CalWorks, the state's welfare-to-work program. He is now threatening to eliminate CalWorks and other social programs if the federal government doesn't cough up additional billions for California. But many welfare experts and advocates for the poor are crying foul over the latest rhetoric, including Whitman's on-air assertion that "California is the welfare state."

GOP rivals in governor's race target welfare costs
By Jack Chang, Sacramento Bee
Ronald Reagan singled out what he called a "welfare queen" for abusing government aid. Newt Gingrich pushed welfare reform as part of his Contract With America. Now, Meg Whitman and Steve Poizner, the top Republican candidates for California governor, are bringing back welfare as a key issue in their quest for primary votes. Welfare's high-profile role in the race became clear last month when Whitman, the billionaire former CEO of eBay, unveiled her first issue-specific radio ad. "Some people worry that we're creating a welfare state," Whitman says at the start of the spot. "The fact is, California is the welfare state." Poizner, another ultra-wealthy former Silicon Valley CEO, has made tightening welfare rules a key part of his plan to balance the state budget. Like Whitman, Poizner proposes cutting lifetime welfare limits to two years from five. "Welfare is an example of where we're spending, in my opinion, several billion more than we should because we don't enforce the work rules and our benefit structure is too high," Poizner said in an interview. "I just don't think it should be a magnet." Whitman declined to participate in an interview on the issues in the governor's race. The candidates' decisions to highlight welfare match public opinion polls that have shown Republican voters particularly dislike aid programs.

Energy scandal:

PG&E customers feel sticker shock from rising rates
By Tim Sheehan, Fresno Bee
A Jan. 1 electricity-rate increase by Pacific Gas & Electric Co. may not feel like much now. But when Valley temperatures climb into the 90s and air conditioners start to hum in earnest, the utility company could feel the heat as customers lose their cool over electric bills. As PG&E prepares to make its case for yet another rate increase next year, growing frustration over high bills and mounting skepticism about the utility's new SmartMeters are prompting greater scrutiny of the company's prices. Fresnans already grumble about getting higher bills for electricity than people elsewhere. A look at rates in other hot-weather communities in the southwestern U.S. suggests that they are right. Compared to other utilities, PG&E's high-energy-use households bear a greater burden to subsidize lower rates for customers who use less electricity. To encourage energy conservation in California, the prices charged for electricity by privately owned utilities slide upward as a household's consumption goes up. So the more power you use, the higher your rate. For PG&E customers, it stands to be much higher. Its highest residential electric rate for single-family households is as much as four times what people pay in some other sun-scorched cities in the West.

Around the state:

San Francisco schools consider costly gay support program
By Jill Tucker, San Francisco Chronicle
With everything from art classes, summer school and jobs on the chopping block this year, the San Francisco school board will decide this week whether to greatly expand school services, support and instruction on issues of sexual orientation. The decision could cost the school district, which is facing a $113 million budget shortfall over the next two years, at least $120,000 a year - enough cash to cover the salaries of two classroom teachers. The school board is expected to vote Tuesday on the fiscally controversial resolution calling for San Francisco Unified to add a new full-time staffer to manage "lesbian, gay, bisexual, transgender and questioning" youth issues in the district's Student Support Services Department. It also would require the district to track harassment and discrimination based on sexual orientation and distribute an educational packet to parents, encouraging them to discuss "the issues of sexuality, gender identity and safety" with their children. That commitment probably would cost about $90,000 a year for the staffer and maybe another $30,000 for the rest. San Francisco school officials have long backed education and support of gay and lesbian support services and recently created the nation's first school district Web site for gay youth. That's in contrast to some other school districts. Last year in Alameda, for example, a torrent of controversy was unleashed over plans to introduce a 45-minute lesson on gay and lesbian issues. The lesson was eventually adopted by that school board over the objections of some parents who said it violated their rights to teach their children their opinion of such issues. That's not the issue in San Francisco. Money is.

Clinics object to bill that would let hospitals hire doctors
By E.J. Schultz, Fresno Bee
Community health clinics and rural hospitals in the Valley both struggle to attract doctors -- but they are on opposite sides of legislation that seeks to fix the problem. Senate Bill 726 would relax the state's ban on the direct hiring of doctors by hospitals, greatly expanding a pilot program that started in 2004. The bill is supported by health districts such as Kaweah Delta Medical Center in Visalia, where a top official says the change is needed to help recruit doctors seeking the security of regular paychecks. Today, most doctors are independent and negotiate hospital privileges. "Physicians are just not trained to be business people," said Steve Jacobs, who recruits doctors for Kaweah. "So it becomes very burdensome if you don't have a business mind." But the bill is opposed by a network of clinics that enjoy an exemption to the hiring ban. The Central Valley Health Network fears it would lose staff if nearby hospitals could hire doctors. The network's doctor shortage is "so dire that [we] don't want to make it worse," said David Quackenbush, chief executive officer of the network, a consortium of 13 federally qualified health centers. California's doctor hiring restrictions are rooted in a ban on the "corporate practice of medicine," which seeks to preserve physician autonomy.

Miller pushes to exclude illegal workers in jobs
By James Rufus Koren, San Bernardin County Sun
Make it harder for companies to hire illegal immigrant workers, and those illegal immigrants won't be able to find work. If they can't find work, they'll leave. That's partly the thinking behind a bill proposed by Rep. Gary Miller, R-Diamond Bar, that would require employers to verify their employees are citizens or otherwise eligible to work in the U.S. The bill, proposed last year, hasn't gone anywhere, but Miller plans to push for it and similar legislation with members of a new Congressional group: the Reclaim American Jobs Caucus. "You've got about 15 million people out of work and we've got about 8 million illegals working in this country," Miller said. "If you're a citizen or you're here legally, you should have the first opportunity to take that job. It's very simple." Last year, Miller introduced the Loophole Elimination and Verification Enforcement Act - not so subtly called the LEAVE Act - that would, among other things, require employers to verify they are hiring only citizens or immigrants who are allowed to work in the U.S. He said he wants to force businesses to use E-Verify, a free online program employers can use to check employees' legal status, and create penalties for employers that break the rules.

Central Valley Reps. want to open federal spigot for water projects
By Agustin Armendariz, California Watch
A bill authored by Representatives Jim Costa, D-Fresno, and Dennis Cardoza, D-Merced, is winding its way through Congress and would make federal money, including stimulus funds, available to pay for a slew of California water projects. Under present regulations, local stakeholders share the cost of water projects with the federal government; the bill would allow federal dollars to pay for the whole thing. As justification for the increased federal expense, Costa and Cardoza cite the record unemployment and drought conditions affecting California. They argue that increased federal spending would create jobs directly, through water projects, and indirectly, through agricultural businesses, which would benefit from increased water. "Our Valley’s farms cannot exist on a 10 percent allocation this year," Costa said in a statement posted on his Web site. "It’s unacceptable." "If we are at 117 percent of snowpack in the Sierra, and to give our farmers a 10 percent allocation is nonsensical and unexplainable. Our farmers and farm workers need to be put back to work to grow the best food and fiber in America." Taxpayers for Common Sense and the National Wildlife Federation came out against the bill. In a  joint statement, the organizations content that in addition to "undermining decades of hard won cost-sharing principles," the looseness of the language in the bill could allow for abuse.

McClintock's refusal to consider budget earmarks hurts his district, critics say
By Ed Fletcher, Sacramento Bee
As the federal budget season heats up, some Placer County officials are grumbling that Republican Rep. Tom McClintock's ideological opposition to congressional earmarks puts their constituents at a disadvantage. "It's already hurt us," Supervisor F.C. "Rocky" Rockholm said in a recent interview. McClintock said he will not seek congressional earmarks – budget requests made outside of the budget process. "I've made it very clear that I will fight for our district through the normal appropriations process," he said. In a telephone interview last week, he said requiring earmarks to be public, as President Barack Obama suggested in the State of the Union address, is a "step in the right direction," but he'd prohibit them if he were writing the reform measure. But the view among several Placer County officials – all of them Republicans in nonpartisan elective offices – is that congressional earmarks aren't inherently dirty. "The key for any budget expenditure is whether it's reasonable and whether it has a federal nexus," said Supervisor Robert Weygandt. Roseville Mayor Gina Garbolino said earmarks shouldn't be abused but aren't always bad. "Earmarks have been really good for Roseville," she said. McClintock said funding for projects should be based solely on their merits, not on seniority or who wields the gavel as the majority party. "It's basic advocacy; that is how the process is supposed to work," said McClintock, who lives in Elk Grove and is in his first year representing the 4th Congressional District. He said he's worked through the normal process to secure funding for as many as 29 area projects.
Don't blame public
Establishment tries to excuse away its dysfunction yet again
By the San Diego Union-Tribune
A new poll is out that’s absolute catnip for the members of the California political and media establishment who like to say the ignorant public demands services via ballot initiatives but then refuses to pay for them with higher taxes. The Public Policy Institute of California survey found residents don’t have a good sense of where state revenue comes from or what the state spends most of its money on. What does this unsurprising revelation translate into when interpreted by the Los Angeles Times? A snarky news story that said Californians who disdain our leaders and institutions “should save a little distaste for ourselves. ... Those who favored the comics pages in decades past may recall the words of the possum philosopher Pogo: ‘We have met the enemy, and he is us.’” Other coverage had a similar tone. This is nonsense – easily refuted nonsense.

Fiorina's demon sheep ad destroys real debate
By the San Jose Mercury News
When Carly Fiorina tossed her corporate hat into the ring for Barbara Boxer's California Senate seat, we wondered about her lack of experience in civic life. But we had high expectations for her discourse. We'd get straight talk, we hoped, from an articulate, all-business woman — thoughtful discussion of complicated issues that career politicians, burdened with actual records in office, sometimes avoid. But the demon sheep? Man, we did not see that coming. Unless you spent the week on Mars, you've probably watched the ad trashing Tom Campbell, who jumped into the GOP race just last month and quickly became the front-runner. Most of the attention has been on the weirdness quotient: The amateurish production, with melodramatic music and apocalyptic, choppy narration, portrays conservatives as sheep and Campbell as an evil wolf in sheep's clothing with laser-red eyes — a faux fiscal conservative.

Portugal, Ireland, Greece, Spain...California?
By Robert Cruickshank, Calitics
The financial news in recent weeks has been dominated by concerns about the possibility of "sovereign default" in several key Eurozone countries. Often known as the PIGS (Portugal, Ireland, Greece, and Spain, sometimes called PIIGS when you throw Italy into the mix), their high levels of unemployment and debt are claimed to be a ticking time bomb for the euro currency and the European Union as a whole. In recent weeks Greece has been forced into promising "austerity" - meaning huge budget cuts - in an effort to bring its debt levels down. Portugal is exploring similar options after a debt sale didn't go as well as expected, and now Spain is expected to follow suit with the Socialist government proposing its own spending freeze.

SB 918 (Pavley) - Safe, Environmentally Sound Water Supply
By Traci Sheehan, California Progress Report
Last Friday, Senator Fran Pavley introduced SB 918 which is currently co-sponsored by the Planning and Conservation League and Water Reuse California . This bill would help improve the availability of safe recycled drinking water by requiring the Department of Public Health to develop and adopt uniform health standards. If passed, the bill will help California develop a new drought-proof source of safe, clean water. Every year, California discharges nearly 4 million acre feet of used water into the ocean - more than the State Water Project delivers to the Bay Area, the Central Valley, and Southern California . Much of that water could be recycled, but because uniform safety standards have not been adopted, the permitting and design processes for creating recycling facilities are unpredictable, discouraging local communities from tapping into this major water source. By adopting uniform health criteria for using recycled water to augment local drinking water supplies, the Department of Public Health can provide project designers with the guidance they need to cost-effectively create new water recycling facilities that are fully protective of public health.

Playing games with Maldonado could backfire for the Assembly
By George Skelton, Los Angeles Times
The Legislature is about to decide whether to allow a colleague to become the first Republican Latino to hold statewide office in 135 years. But more important questions also will be answered: Can the Legislature's Democratic majority vote for a Republican? Can Democratic Latinos vote for a potentially rival Republican Latino? Can Republican conservatives vote for one of the Legislature's very rare Republican moderates? In short, can this Legislature behave in a bipartisan manner? Or will it act out in a spat of petty politics? The Senate seems to be answering these questions on the side of -- as Sen. Gil Cedillo (D-Los Angeles) puts it -- "comity." As in: civility, cooperation and camaraderie.

Logrolling lives large in California budget
By Dan Walters, Sacramento Bee
A year ago, Gov. Arnold Schwarzenegger and the Legislature enacted a budget package noteworthy for a rare increase in taxes – but getting the required two-thirds votes involved old-fashioned horse trading.  A top-to-bottom overhaul of how property taxes are allocated, replacing the jury-rigged structure that evolved after Proposition 13's passage in 1978, is clearly overdue. Otherwise, we'll continue to see more juicy deals for legislators whose counties want money and whose votes are needed for budgets or other bits of legislation.





 
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