Consumer Watchdog Asks Attorney General and DAs to Investigate CA Insurance Commissioner Over Apparently Illegal Payments for Second Home in Sacramento

LOS ANGELES, California, Sept. 9 -- Consumer Watchdog issued the following news release:

Following a Politico report that California Insurance Commissioner Ricardo Lara billed the state for his Sacramento apartment, Consumer Watchdog has called on Attorney General Xavier Becerra and the District Attorneys for Sacramento, Los Angeles and San Francisco counties to launch an investigation over the potential theft of public funds.

Read the letter to Becerra, Los Angeles DA Jackie Lacey, San Francisco DA George Gascon and Sacramento DA Ann Marie Schubert here: https://consumerwatchdog.org/sites/default/files/2019-09/CWD-Letter-to-Becerra-et-al-re-Lara-Investigation-9-6-19.pdf

"We are deeply troubled to report that California Insurance Commissioner Ricardo Lara appears to have committed crimes punishable by up to four years in prison by using public funds for his personal benefit and fraudulently representing expenses for his second home in Sacramento as a legitimate public expense," Consumer Watchdog's president Jamie Court and litigation director Jerry Flanagan wrote to the prosecutors.

"Politico.com reported that Commissioner Lara received taxpayer-funded reimbursements for his rental apartment in Sacramento at a cost of between $570 and $700 per month. Though Commissioner Lara refused to be interviewed, Department spokesperson Michael Soller told Politico.com that Lara had retained the same apartment in Sacramento that he used as state senator," the letter noted.

"The Department claims that since Lara spends approximately eight days in Sacramento per month he is able to charge the California taxpayers $95 per day for lodging, presumably the preferred rate for state workers in a hotel. However, Lara's reimbursement records, obtained from the State Controller's Office, fraudulently accounted for the monthly cost of the apartment as 'railroad fare.' Spokesperson Soller explained that those entries actually refer to the cost of Commissioner Lara's apartment and were entered in a transportation category because the 'accounting department didn't have a field to enter the lodging reimbursement for this purpose.'

"The reason no field exists for this type of 'lodging reimbursement' is because the state law prohibits the Insurance Commissioner from being reimbursed for the cost of his permanent housing and does not provide for a per diem, which is the reimbursement Commissioner Lara appears to have collected from the state.

"Using public funds in this way appears to be a violation of law warranting your investigation.

"Under Government Code Section 8314(a), elected state officials cannot "use public resources for . . . personal or other purposes which are not authorized by law." "[P]ersonal enjoyment, private gain or advantage" is prohibited. (Gov. Code Sec. 8314(b)(1).) Only incidental personal benefit from public funds is allowed; for example, "an occasional telephone call" made on a state-issued phone. (Id.)"

Consumer Watchdog stated, "First, the state Department of Human Resources Manual mandates that executive branch employees who are required to obtain lodging due to state business "shall only use commercial lodging establishments such as hotels, motels, bed and breakfast inns, public campgrounds, or short-term rentals (such as Airbnb) that cater to the general public.

"Second, the advantage of maintaining a full-time second residence in Sacramento is not a permitted 'incidental' or minimal personal benefit like making an occasional phone call on a state-issued phone. Though Commissioner Lara appears to be claiming that use of his Sacramento residence is only necessary for approximately eight days of public business each month in Sacramento, by billing taxpayers for the entire cost of the apartment rental Commissioner Lara is benefitting from the use of the residence over weekends and other personal visits to Sacramento throughout the rest of the month."

The letter concludes: "The public has a right to know what really happened. Only an investigation by the office of a public prosecutor can compel answers about whether the insurance commissioner engaged in criminal activity. No public official should be above the law. All state workers should know that every state employee, including elected officials, are held accountable to the law."