The insurance billionaire backing Proposition 33 is worried. He dropped another $500,000 into the campaign on Wednesday as Prop 33 slips in the polls (Down over 16% in the only public poll on 33.) But it’s not over – the money from Mercury Insurance chairman George Joseph means a last-minute cash infusion (he’s given $17 million total) to pay for his campaign’s lies, including new deceptive advertisements that feature testimonials by “supporters” who had financial ties to Mercury Insurance and its chairman George Joseph.


Joseph is using dirty tricks to deceive voters because the polls show the more the public learns about Prop 33 the less they like it. Two years ago, Californians voted against this insurance company’s false promises of discounts. Voters are smart enough to see through the same insurance company’s phony paid spokespeople too.

The truth can beat $17 million in insurance industry lies.

We will win if you share the facts about Prop 33 with your friends and family.

Among the latest deceptive advertising tricks featuring paid “supporters” by the Prop 33 campaign:

• A half-page ad that ran in the Los Angeles Times on Thursday features State Senator Juan Vargas stating support for Prop 33, yet fails to disclose the $69,100 in campaign contributions that Vargas has received from Joseph and Mercury Insurance. Vargas himself is a former insurance industry executive.

  See the ad here

• New Yes on Prop 33 banner ads on news websites feature the face of a voter who is actually an employee of Marketplace Communications, which has been paid over $750,000 so far to run the campaign.  Other employees of Marketplace Communications posing as real drivers were featured in paid television advertising without disclosing their identities.
• Slate mailers going to households all across California this weekend feature a Yes on 33 endorsement from the Peace Officers Research Association of California, which received at least $75,000 for the endorsement. The campaign reports paying the US Postal Service $877,0000, suggesting it may have also paid to mail out the literature for PORAC and other paid slate mailers.

The only public poll on Prop 33, from Pepperdine University and the California Business Roundtable, reported this week that Prop 33 has fallen to 48.8% support, from 54% two weeks ago, and 60% prior to that.

Proposition 33 would allow insurance companies to raise auto insurance rates on good drivers who stop driving for almost any reason, even if they didn’t have a car.

Other campaign “supporters” that have been paid directly by Mercury, Joseph and the Prop 33 campaign include:

• Roy M. Perez, the Immediate Past Chair of the California Hispanic Chamber of Commerce, owns RMP Strategies which has been paid $30,000 as a consultant by the Yes on 33 campaign. Former Senator Perata received at least $43,100 in campaign contributions from Mercury and Joseph, and was paid consulting fees from a nonprofit paid $75,000 by Mercury. The CA Hispanic Chambers of Commerce, PORAC, Senators Vargas and Perata were all featured in yesterday’s Los Angeles Times ad.
• The Greenlining Institute opposed a measure nearly identical to Prop 33 in 2010, but reversed its position after a $25,000 contribution received from Mercury this spring, which was followed by another $195,000 contribution in September. Greenlining is also featured in the Los Angeles Times ad.
• Last month, Prop 33 TV ads were caught falsely representing two women – Brandi King and Adriana Calderon – as regular drivers without disclosing that they work for the PR firm, Marketplace Communications, that has been paid over $750,000 to run the campaign.  Currently, Marketplace employee Eric Goto is featured in banner web site advertising posing as a disinterested voter voting on Prop 33.

Congressman John Garamendi, California’s first elected insurance commissioner and former Lt. Governor, today announced his opposition to Proposition 33. He joins every major consumer group in California, including Consumers Union, the nonprofit publishers of Consumer Reports, Consumer Federation of California, Consumer Action and Consumer Watchdog who oppose Proposition 33 because it would unfairly raise rates on new drivers, and Californians who stop driving for good reasons, even if they have perfect driving records.

The coalition of organizations opposing Prop 33 represents seniors, civil rights, workers, women and faith-based organizations including: California Nurses Association, California Council of Churches IMPACT, California NOW, California Labor Federation, MALDEF, Equal Justice Society, California Alliance for Retired Americans and many more.

Click here to find the extensive list of No on Prop 33coalition members.

For more information on why to vote No on Prop 33 visit: http://stopprop33.consumerwatchdogcampaign.org/

Revelations of discrimination by insurance companies are always shocking, but when they come out just days before a vote on an industry-sponsored ballot measure that would legalize unfair price increases and prejudice in auto insurance, Californians should pay particular attention.

A former insurance agent from the Auto Club of Southern California just blew the whistle on a scheme at the company that led to discrimination. The allegations come just as California voters take up Prop 33, a ballot measure financed with $16 million by one insurance executive, Mercury Insurance chairman George Joseph, that will allow auto insurance companies to surcharge motorists just because they didn’t buy insurance in the past, even if they didn’t own a car.

A new poll from the California Business Roundtable, whose numbers consistently tilt in favor of big business that funds it, shows voters have turned against Prop 33, with support dropping to 48% as the public learns about the proposal and the billionaire insurance executive who is behind it.

The Auto Club of Southern California insurance agent Jill Rogers exposed how the insurance company financially penalized agents for writing policies for new drivers and those without prior insurance, including those who did not drive previously. She said agents hung up on customers who did not have prior insurance and quoted them the most expensive policies, because the agents would only receive a $20 commission on those policies. For those who had continuous coverage, the Auto Club would pay its agents $100 to $500.


Call it Jim Crow Insurance. It’s illegal to charge more to new drivers and those with lapses in coverage in California, so insurance companies find other ways to keep them off the roll.

Clearly auto insurance companies don’t like to insure new drivers and those who had a lapse in their coverage, even though they are prevented by law from charging them more. Prop 33 would open the door to outright price discrimination.

As husband of an African American woman, I have seen racial discrimination first hand, including misplaced reservations, overcharges and other indignities endured by my wife and family on a fairly regular basis. Jill Rogers’ description of how insurance companies financially pressure agents, who in turn drop phone calls and misquote certain types of drivers, rings a bell. And this occurs in a system where it is already illegal to charge more to people who did not drive previously because they could not afford insurance.

How much worse will it be if Prop 33 made such price discrimination legal for all insurance companies?

We know from history. Shortly after California imposed tough mandatory insurance laws in the 1980s, a group of inner city residents sued because they were being forced by the state to buy auto insurance but could not afford it: Insurance companies were charging them thousands of dollars per year for auto insurance because of the ZIP-code they lived in and the fact that they did not have insurance previously.

Auto insurance companies, including George Joseph’s Mercury Insurance, the backer of the current Prop 33 proposal, essentially drew a “redline” around their communities and used these two pricing factors to keep African Americans and Latinos out of the auto insurance market.

Justice Allen Broussard of the California Supreme Court wrote: “This case arises from the attempt of the California Legislature to solve a serious social problem – the uninsured driver – without taking into account an equally serious problem – insurance pricing practices which make automobile liability insurance prohibitively expensive for many of the urban poor.”

Broussard, the second African American justice to serve on the California Supreme Court, noted that the plaintiffs “speak also of the reluctance of insurance companies to insure persons who were previously uninsured, a problem of particular concern since the purpose of the 1984 legislation was to compel such persons to obtain insurance.”

In its decision in the seminal King v Meese case, the California Supreme Court said it sympathized with the plaintiffs but told them to turn to the legislature, which then refused to act. Voters took matters into their own hands in 1988 with Prop 103 and banned the power of insurance companies to charge new drivers and those without previous insurance more for auto insurance.

Now, 24 years later, Prop 33 would reverse the ban and allow companies to again charge new drivers and those without insurance more for auto insurance.

Anyone who doubts that Prop 33 is about giving insurance companies the power to discriminate just needs to listen to Jill Rogers.

Joseph, who has tried to overturn this and others prohibitions on discrimination in the courts and legislature for two decades, before losing a nearly identical ballot measure to Prop 33 just two years, finally admitted to the LA Times recently that he would use Prop 33 to charge more to new people in the market. Afterall, when was the last time an insurance company billionaire spent $16 million on a ballot measure to save you money?

And if you doubt that such price discrimination would fall hardest on people of color, consider that the unemployment rates among whites is 7.5% and among blacks 14.1% percent and Latinos 10.2%. People of color are going to be the most likely to have to stop driving for economic reasons, and Prop 33 will slam them with 40% premium increases when they come back in the insurance market. That’s exactly how much Mercury Insurance charged those who didn’t drive previously when the sponsor of Prop 33 and his company were caught illegally surcharging them in the late 1990s and early 2000s.

Prop 33 hurts all of us by putting more uninsured motorists on the road, and raising our uninsured motorists premiums, but it’s attempt to punish communities of color is outrageous.

Prop 33 is a deceptive initiative designed to bring us back to the day when insurance companies could price certain types of people out of the insurance market. That’s why consumer groups, civil rights groups like MALDEF and Equal Justice Society, as well every major newspaper editorial board in the state oppose it.

Recently civil rights leader Dolores Huerta spoke out against Prop 33. “We should be wary when a billionaire funds a self-enrichment ballot scheme,” said Huerta. “We will all pay if insurance discrimination against the poor and communities of color is brought back. Please join me in voting NO on Prop 33.”

Judging by the most recent poll, and thanks to whistleblowers like Jill Rogers, Californians seem to be agreeing with Huerta.

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Originally posted on 11/1/2012 on the Huffington Post. Posted by Jamie Court, author of The Progressive’s Guide to Raising Hell and President of Consumer Watchdog, a nonpartisan, nonprofit organization dedicated to providing an effective voice for taxpayers and consumers in an era when special interests dominate public discourse, government and politics. Visit us on Facebook and Twitter.

We have just one week to beat the insurance billionaires trying to buy this election.

We plastered these posters around the streets of San Francisco and Los Angeles to expose these deceptive billionaire propositions. Can you help us make sure more voters know?

Please post our new posters on Facebook today. Don’t use Facebook? Share the posters directly from our website here.

Our grassroots campaign against Prop 33 has just a few hundred thousand dollars to compete with the $16.4 million spent by insurance billionaire George Joseph, chairman of Mercury Insurance.

And last week, Charlie Munger Jr., the heir to the Berkshire Hathaway fortune including GEICO Insurance, sank another $13 million – for a total $35 million – into the campaign for Prop 32.

Prop 32 will take away workers’ voices in Sacramento but preserve the power of big corporations and wealthy individuals – like Munger and Joseph – to spend unlimited amounts in elections. Prop 33 will deregulate auto insurance and allow insurance companies to raise rates on good drivers just because they decide to stop driving for awhile.

We’ve got just 7 days left to expose these billionaires and stop them from buying the election.

Please share our posters on Facebook, or find the posters on our website and email your friends.

Your voice can beat the money spent by these insurance billionaires, but only if you help us spread the word. Tell your friends to vote No on Props 32 and 33 today!

In an open letter today, the California Nurses Association and Consumer Watchdog challenged the billionaire financiers of Propositions 32 and 33 to a public, televised debate.

Will Charles Munger Jr. and George Joseph defend the measures attacking working people that they’ve spent $39 million promoting? Or will they continue to hide in the shadows behind their PR flacks and deceptive TV advertising?

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October 24, 2012

Mr. Charles Munger Jr. and Mr. George Joseph:

Gentlemen, the California Nurses Association and Consumer Watchdog invite you, the primary financial sponsors of Propositions 32 and 33, to join us for a public debate on the merits and adverse consequences of these measures and the impact they will have on all Californians.

We call for a debate that would be hosted by a journalist of mutual agreement in a televised forum at your earliest convenience.

There’s more…

To date, Californians have heard a great deal about the reputed benefits of Propositions 32 and 33, but only from one-­‐sided political ads that hardly provide a fair or complete picture.

As the biggest financial contributors to these initiatives, for which you have already contributed a combined $39 million, your silence on these measures, which will have far-­‐reaching effects on all Californians, does a great disservice to the public.

If the initiatives you have so lavishly financed really will achieve the promises you claim in your advertisements, you should welcome the opportunity to stand up in public and defend them. We call on you to do so now.

As you no doubt know, our organizations sharply disagree with both the content of these initiatives, and the misleading way in which you have promoted them.

Proposition 32 is a misleading measure which claims to be legitimate campaign finance reform, but has been exposed as anything but that by virtually every newspaper in California. It would exempt corporate interests, shadowy super PACS, and the super wealthy like both of you while silencing the voices of nurses, consumer advocates, and others who would challenge your views.

Proposition 33 reverses a 24-­‐year-­‐old consumer protection that prohibits auto insurance companies from charging drivers more for car insurance just because they didn’t drive previously or otherwise had a break in coverage. Opposed by Consumers Union, Consumer Watchdog and nearly every newspaper editorial board in California, Proposition 33 allows insurance companies to penalize good drivers who did nothing wrong other than not drive and not buy insurance. Nonetheless television advertising running statewide falsely claims Proposition 33 “rewards responsible consumers.”

We know that more and more Californians are appalled at the specter of billionaires and multi-­‐millionaires corrupting our political process and would like to hear answers from those spending so much in this campaign. First and foremost, they would ask: Are the $22.9 million and $16.4 million checks you have written for Propositions 32 and 33, respectively, aimed at anything more than buying the vote for personal and political gain?

It’s time for you to step out of the shadows. The voters deserve to see and hear from the people responsible for Props 32 and 33, rather than the same old sound bites from the deceptive advertising your millions pay for.

Voters need to look you in the eye to gauge your sincerity, and judge your motives. The voters being bombarded with your advertising spin now deserve no less.

We look forward to hearing from you.

Sincerely,

DeAnn McEwen, RN

Co-­‐president, California Nurses Association

Jamie Court

President, Consumer Watchdog

Prop 33 Is A Measure Backed by One Insurance Billionaire To Raise Rates On Good Drivers

Consumer Watchdog Campaign today compiled ten of the most compelling reasons Californians should vote NO on Proposition 33, as reported by newspapers and editorial boards across the state.

“Consumer and public interest groups are being outspent 50 to 1 by an insurance billionaire who has thrown $16 million into Prop 33 in order to cherry pick customers and raise rates on good drivers in California,” said Carmen Balber of the No on Prop 33 Campaign. “Voters should look to trusted sources to sort through the truth about how Prop 33 will hurt consumers.”

Top ten reasons Californians should vote NO on Prop 33:

1.   Prop 33 will raise rates on new drivers.

George Joseph, the insurance billionaire behind Prop 33, acknowledged to the Los Angeles Times “on Sunday that Prop 33 will raise rates on new drivers. As columnist Mike Hiltzik reported: “He made no bones about the fact that the ‘proper rate’ for customers coming to Mercury as newly insured policyholders is much higher than what he can charge them now.”

2.   Prop 33 will allow insurers to cherry pick their preferred customers and raise rates on everyone else.

Riverside Press-Enterprise editorial: “The idea that the head of an insurance company would spend millions of dollars to save drivers money defies all credibility. No, a different and self-interested agenda drives this measure: poaching lucrative customers from rivals while encouraging less desirable customers to go elsewhere. Californians have no reason to reward that kind of special-interest scheme, and voters should reject Prop. 33.”

3.   California voters said NO to an almost identical measure at the ballot two years ago.

San Jose Mercury-News editorial: “Two years ago billionaire George Joseph, chairman of Mercury Insurance, spent $16 million of the company’s money on Proposition 17, a direct attack on California’s strong insurance rights laws. Like an irritating mosquito, Joseph and his millions are back again this year with Proposition 33, essentially a new version of the law voters rejected two years ago.”

4.  Prop 33 will raise the number of uninsured drivers in California.

Riverside Press-Enterprise editorial: “That approach would make insurance more expensive for drivers who do not have it now – which would undermine the public interest. State policy should encourage all drivers to buy insurance, to avoid the extra costs everyone else pays in collisions with the uninsured. Instead, Prop. 33 would throw new financial obstacles in the path of those who lack insurance.”

5.   Prop 33 will overturn a 24-year-old consumer and civil rights protection.

North County Times editorial: “Put on the ballot by insurers, Prop. 33 seeks to lift a voter-approved prohibition (Prop. 103 in 1988) on charging automobile insurance customers a higher rate if they were not previously insured. We see no reason to change the current ban on charging higher rates to the previously uninsured. A person’s likelihood of causing a vehicle collision tomorrow would not seem to hinge on whether they had insurance last week or not.”

6.   Prop 33 will raise rates on good drivers who drop their insurance coverage for almost any reason.

Sacramento Bee editorial: “The downside remains clear as the attorney general’s office notes in the official summary: Proposition 33 ‘will allow insurance companies to increase cost of insurance to drivers who have not maintained continuous coverage.’ That would mean higher costs for graduating students buying coverage, anyone newly obtaining an auto, city dwellers who haven’t owned a car but now live in an area without mass transit, anyone who decided not to drive for more than three months to save money.”

7.   Prop 33 unfairly punishes responsible drivers who stop driving for good reasons and then need to get back on the road.

Daily News editorial: “There is no good reason such people should be punished for their non-driving period. Once they need or are able to drive again, the law says they have to buy insurance. When they comply with that law, they should not be hit with a surcharge that could last five years.”

8.   Prop 33 will raise rates on drivers with perfect driving records.

Bakersfield Californian editorial: “But Prop. 33 could still raise rates for drivers, even those with perfect driving records. In states with Prop. 33-like rules, drivers who buy insurance following a long lapse in coverage paid more: 61 percent more in Texas, 79 percent more in Nevada and 103 percent more in Florida.”

9.   Prop 33 is funded by one insurance billionaire to benefit his own company at the expense of consumers.

Daily News editorial: “The electorate didn’t buy the pitch then that Mercury Insurance’s chairman was spending $16 million to pass a measure just because he wanted consumers to save money on auto insurance. And voters shouldn’t buy it now that Mercury’s billionaire boss George Joseph is back — spending more than $8 million so far in support of of this self-serving measure.”

10. Prop 33 is backed by an insurance company with a record of abusing its customers and violating the law.

Santa Cruz Sentinel editorial: “According to the California Department of Insurance, Mercury Insurance overcharged and discriminated against California customers for 15 years. The company’s founder, Joseph, has a track record of giving money to state politicians to get state law changed to benefit Mercury, and when that failed, abusing the state initiative process with his self-serving propositions.”

Incredible! With two weeks until Election Day, the insurance billionaire behind Prop 33 finally admitted his auto insurance initiative will raise rates on new customers.

Los Angeles Times columnist Mike Hiltzik drew the admission from Mercury Insurance Chairman Joseph in Sunday’s newspaper.

When the billionaire writing the $16 million check for Prop 33 speaks about his initiative raising auto insurance rates, voters should listen.  

But will voters hear Prop 33’s financier over the deceptive television advertising he has bought claiming only that Prop 33 will “reward responsible drivers”?

You can help us get out the word by posting the link to Sunday’s LA Times column (http://lat.ms/TCDqH4) on your Facebook timeline, tweeting it or sharing it with your friends from the newspaper’s site.

In Sunday’s Los Angeles Times, Joseph acknowledged that Prop 33 is a marketing strategy for his insurance company that will allow him to cherry pick his customers “if I could charge new people the proper rate.”

As Hiltzik reports, “He made no bones about the fact that the ‘proper rate’ for customers coming to Mercury as newly insured policyholders is much higher than what he can charge them now.”

Voters banned the power of insurance companies to raise rates on first time drivers and others who did not previously have auto insurance in 1988. Prop 33 would turn back the clock on auto insurance regulation in this state.

Will you help us spread the word about Prop 33’s big lie?

Joseph said that if Prop 33 doesn’t pass it will be “a tremendous waste of money.” Better his than ours!   Please share this critical news story today.

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Posted by Jamie Court, author of The Progressive’s Guide to Raising Hell and President of Consumer Watchdog, a nonpartisan, nonprofit organization dedicated to providing an effective voice for taxpayers and consumers in an era when special interests dominate public discourse, government and politics. Visit us on Facebook and Twitter.

The Mercury Insurance initiative’s lawsuit to stop the Attorney General and us opponents from telling the truth about Proposition 33 – how it will raise auto insurance rates – got tossed out of Sacramento Superior Court last Thursday. The Mercury campaign asked the court to rewrite the Official Ballot Pamphlet, which is sent to every voter’s home, so it would contain only Mercury’s false claim that everyone will get “discounts” if Proposition 33 passes.  After an hour-long argument, the judge said no.

But the ink was hardly dry on Thursday’s court order when Mercury told yet another lie – this time about what we said in court.

In a press release issued Friday morning, Mercury said: “CONSUMER WATCHDOG ARGUES IN COURT THAT THE TRUTH IS ELASTIC.”

We never said that, of course. (The release also called us “corporate lawyers,” which the corporations we take on would no doubt find bewildering.)

I guess we shouldn’t be surprised that George Joseph, the multi-billionaire Chairman of Mercury Insurance who has contributed 99.1% of the $8.29 million received by Proposition 33, can’t stop lying about his proposition and the consumer, citizen, senior and patient’s organizations who vehemently oppose it.  After all, according to the California Department of Insurance:

“Mercury [has a] lengthy history of serious misconduct, and its attitude – contempt towards and/or abuse of its customers, the Commissioner, its competition, and the Superior Court….Among Department staff, consumer attorneys, and consumer victims of its bad faith, Mercury has a deserved reputation for abusing its customers and intentionally violating the law with arrogance and indifference….”

Mercury’s dirty propaganda campaign didn’t work back in 2010, when the company mounted a nearly identical proposition to deregulate auto insurance, also sued the Attorney General and us, spent $16 million, and still lost. Joseph and the pigs at the Mercury trough (an assortment of PR hacks, phony non-profit groups, insurance agents and bought-and-paid-for politicians) think the voters are stupid. But they are wrong. California voters can smell a dirty, self-serving initiative a mile away.

The Mercury Insurance campaign might have gotten away with its Friday fabrication, except we were able to catch them red-handed.

Hours before Thursday’s hearing, I found out that Joseph’s lawyers had not requested a court reporter be there to take down everything that was said in court. (Thanks to severe budget cuts, state courts can no longer afford to pay for court reporters – the parties in a lawsuit have to pay.) It seemed odd that this mega-billionaire would not spring for someone to record the truth… and then I realized that the Mercury campaign might not want a transcript of what happened in court, so they could lie about it later.

So I pulled out my checkbook, went to a special window at the Sacramento Superior Court, and paid the $30 for the court reporter myself.

Good thing, as it turns out.

The court reporter’s transcript confirms that our lawyer, the highly respected James Harrison of Remcho, Johansen & Purcell, never uttered what Mercury quoted him as saying. Rather, citing the First Amendment and many legal decisions, he urged the court to reject Mercury’s attack on our conclusion that Proposition 33 will “deregulate” auto insurance premiums. Here are his words:

“Your Honor, as the Court noted, deregulation is an elastic and ideological concept. In the Huntington Beach case, for example, the Court refused to make a change to the argument that the measure requires AES, the electricity company, to pay its fair share. And the reason that the Court refused to intervene was that the term ‘fair share’ is a very elastic and ideological concept. What you understand to be a fair share might not be what I understand. The same is true of deregulation, your Honor. What I understand to be deregulation may have a very different meaning to someone else. It’s a very elastic concept.”

Mercury’s legal shenanigans wasted a lot of taxpayer money at a time when California courts are struggling to deliver justice fairly and efficiently despite a gaping hole that the Legislature has inflicted on the judicial branch budget. (Late Friday, Joseph’s lawyers filed an appeal, hoping to overturn the Superior Court’s decision.  It was summarily denied.)

Forcing the Attorney General to defend in court her summary of Proposition 33, which she is required by law to prepare for the ballot, was also an unnecessary drain on that law enforcement agency’s scarce resources. (Joseph was also furthering a strategy recently adopted by Wall Street and other corporate interests: Attacking Attorney General Kamala Harris in an attempt to intimidate and undermine her.)

The Mercury campaign’s public relations minions don’t care about the cost to taxpayers. To them, filing a lawsuit in court is just another gambit in their greed-driven, deceptive campaign to get the voters to pass a law allowing companies like Mercury Insurance to raise your auto insurance rates and make more money.

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Posted by Harvey Rosenfield, Founder of Consumer Watchdog and Author of California Proposition 103, the landmark Auto Insurance Regulation law in California.