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Jul 28, 2004 - 04:15 PM

Oops! I Appointed a Special Interest

by Doug Heller
Arnold has appointed an insurance industry lobbyist -- Bill Gausewitz -- as the Director of the Office of Administrative Law (OAL). The OAL is a lesser-known but hugely important agency that serves as the state's regulatory gatekeeper. It is the last hurdle for all regulations proposed by California agencies before new rules can take effect. For California law to be properly implemented, the OAL must be neutral and free from special interest influence. But Arnold has decided to turn it over to the special interests.

This is actually Arnold's second attempt at filling the post; the first flamed out because that nominee, Ed Heidig, was considered too partisan for the job. But this nomination is worse than partisan; it's pure special interest payola to the insurance industry, which has given Arnold over $1 million in campaign contributions.

Gausewitz is the Assistant Vice President for State Affairs for the American Insurance Association, a major Sacramento and Washington, DC lobbying outfit. For the insurance industry, having one of their own atop the OAL gives the companies an unprecedented check on the Department of Insurance. Every regulation issued by Insurance Commissioner Garamendi -- who refuses to accept insurance industry contributions -- has to pass through the OAL and can be rejected or sent back for amendment. If the State Senate were to confirm Gausewitz, the OAL would be used by the special interests to block consumer protections that Garamendi and other regulators propose.

It is not entirely surprising that Arnold would give such a gift to the American Insurance Association (AIA), both because of all the insurance money to the Gov and, not coincidentally, because the AIA is closely tied to Mike Murphy, the political strategist who helped Arnold become Governor. Murphy even set up a private meeting between the AIA and the Gov. when he made a trip to DC earlier this year.

Friend of Arnold or not, the AIA is indisputably a special interest that will always be lobbying the regulators, but should never become the regulator.

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