EDITORIAL: Insurance commissioner’s campaign cash scandal raises troubling questions

Jul. 10--Shady and suspicious. These two words describe how Insurance Commissioner Ricardo Lara's political operation looks in the wake of San Diego Union-Tribune reporter Jeff McDonald's investigation of his fundraising practices.

The Union-Tribune found that Lara has secretly accepted tens of thousands of dollars from people with links to the insurance industry. He did this despite making a public pledge to reject financial contributions from the companies he's charged with regulating.

Here's where it gets a bit too slick: Instead of taking the money directly from insurance industry executives, Lara in some cases received large checks from their relatives. The apparent structuring of these contributions to hide the true origins of the money raises serious ethical questions for Lara to answer.

For instance:

-- Theresa DeBarbrie, an administrative coordinator at a nursery school in New York City, wrote a $15,500 check to Lara. "DeBarbrie is married to Carl DeBarbrie, a principal at Remco Insurance Agency in Hempstead, N.Y. Carl DeBarbrie confirmed in a telephone interview that his firm does business in California, and he was aware of the donation from his wife," according to the Union-Tribune.

-- Darlene Graber, a Texas homemaker, wrote a $7,800 check to Lara. "Public records show Darlene Graber shares an address in the Austin suburb of Leander, Texas with Larry Graber, a senior executive at Independence Holding Co., a conglomerate that owns and operates several insurance companies," according to the Union-Tribune.

-- Another $31,000 came from Stephen and Carol Acunto, also of New York. Acunto has served as a spokesman for Applied Underwriters, according to the Union-Tribune, and the company is seeking Lara's approval on a proposed sale. Acunto did not respond to the newspaper's questions about his contributions to Lara.

When initially confronted about the contributions, Lara attempted to downplay the issue and keep the cash he had promised not to accept. "He issued a statement saying he hoped voters would evaluate his performance as the California Department of Insurance commissioner, a position that oversees more than $310 billion in homeowner, workers' compensation and other policies every year," the Union-Tribune said.

Now, he's changed his tune. Lara has pledged to return the money -- more than $50,000 in total -- and reform his campaign practices. Among the changes Lara says he'll implement is to appoint a campaign treasurer. Apparently, Lara has been filling the role himself on his own campaign. This unusual arrangement puts California's insurance commissioner squarely at the center of his own campaign cash scandal, since it's the finance director's job to vet contributions.

This raises troubling questions. For instance, how did these insurance interests all decide on the strategy of funneling their contributions to Lara through their wives' checking accounts? Did Lara know they were doing this? Was this a purposeful attempt to evade transparency and accountability? Whose idea was it?

In an emailed statement, Lara promised to do better.

"I pledged to not accept insurance money during my campaign, and it is a pledge I intend to keep," he wrote. "I appreciate the San Diego Union-Tribune bringing this to my attention. With California having the nation's largest insurance industry, it is clear that appointing myself as treasurer was insufficient to properly vet all contributions. As a result, I will be appointing a treasurer to review all contributions for ties to the insurance industry, return any taken in error, and ensure that I fulfill my pledge."

It's a positive step, but questions linger. When a politician gets caught breaking his promises via sneaky methods, it erodes public trust. Lara claims it was just a mistake, but financial scandals carry the scent of corruption.

There's a good reason why California insurance commissioners don't take contributions from the companies they regulate. State Insurance Commissioner Chuck Quackenbush's political career imploded in 2000 after he was caught taking millions in campaign contributions in order to resolve complaints against insurance companies.

Lara must do more than return the ill-begotten cash. He must come clean about how those checks got written in the first place, admit the error of judgment and commit to steering clear of such trickery in the future.

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