While the candidates for governor try to turn our eyes away from the circus in Iowa long enough to make their case of why they should be chosen to clean up the Bobby Jindal mess, there is another statewide race that is quietly flying under the radar which deserves our attention.
If ever there was a case to be made for prohibiting campaign contributions from industries and individuals the candidates would be regulating once in office, it would have be with the races for Louisiana Insurance Commissioner, Public Service Commission, and Louisiana Attorney General. An examination of contributions to candidates for those offices stands as the poster child for campaign reform.
Matt Parker is trying to change that. The Monroe native owns and operates an auto body shop and it his experience with insurance companies through his business that has led him to defy all political odds and run against incumbent Insurance Commissioner Jim Donelon. http://mattparkerforlouisiana.com/
The single biggest black mark against Parker’s name is that he was an All-State football player at Neville High School in Monroe. Being an alumnus of district rival Ruston High (Magna Cum Barely, class of 1961), long a bridesmaid to the stellar football program of Neville, first under Bill Ruple and later Charles Brown, I find that to be a tough personal negative for Parker to overcome.
His entry into the cesspool of Louisiana politics stems from major problems independent body shops were having and continue to have with auto insurance companies. https://louisianavoice.com/2014/05/07/unlike-a-good-neighbor-state-farm-may-be-undermining-choice-of-auto-repair-shops-same-for-the-good-hands-folks/
Insurance claims departments were said to have had this nasty habit of steering claimants to shops of their own choosing, shops the complainants said that that while cheaper, were turning out inferior work and using sub-par after-market parts. This, said the shops being shut out, was endangering the lives of the motoring public.
The merits or qualifications of Parker are not up for discussion here. What is open for examination, however, is the list of campaign contributors for each of the two candidates. (A third candidate, Baton Rouge attorney Charlotte McDaniel McGehee, a Democrat, has just announced as a candidate but there are not campaign contributions records available for her as yet.)
Both Donelon and Parker are Republicans but you’d never know that from the campaign finance reports of the two candidates.
Donelon’s report is dominated by big money flowing into his campaign from insurance companies and individuals in the industry. No fewer than 75 such companies and individuals from out of state contributed nearly $130,000 to Donelon. That’s $50,000 more than all of Parker’s campaign contributions combined.
In all, Donelon has attracted about half-a-million dollars since January of 2014 while Parker has pulled in $76,800 total.
Sixteen Donelon contributors kicked in $5,000 each, exactly half of those from other states. Thirteen were from the insurance and banking industries.
One of those, Michael Karfunkel of New York City, is a co-founder, along with his brother, of AmTrust, described by the Southern Investigative Reporting Foundation (SIRF) as “a high-flying insurance company.” SIRF found that while Michael Karfunkel and brother George were active grant-makers to synagogues and institutions linked to Brooklyn’s Haredi Judaism community, they reaped huge benefits from using their foundations to maintain family control of AmTrust.
Several years of IRS Form 990s, the annual report for tax-exempt foundations, showed that the Karfunkel brothers funneled AmTrust stock into their foundations in violation of IRS rules governing “excess business holdings.”
Basically, a foundation’s “disqualified persons,” an IRS term for foundation managers, family members, directors and key donors, are limited to stock ownership of 20 percent . The Karfunkel insiders owned more than 59 percent of AmTrust’s shares.
Michael Karfunkel and AmTrust each contributed $5,000 to Donelon.
Other insurance companies, attorneys, bankers, and individual in the insurance industry who contributed the $5,000 maximum to Donelon included GMAC Insurance Management, LUBA, USAA, Anchor Insurance Managers, the Republic Group, Joseph Kavanagh of New York City, and Greenberg Traurig of Miami.
Here is the complete list of JIM DONELON CONTRIBUTIONS of $1,000 and more.
Parker, who says on his Web page that he will not accept any contributions from the insurance industry, has received only three individual contributions of $5,000. One of those from Daniel Parker, presumably a relative. Another is from the Louisiana Collision Industry, which has had its cause taken up by Attorney Buddy Caldwell and which had its fight with insurance companies featured on CNN’s Anderson Cooper 360.
Of his 83 contributors, 41 gave $1,000 or more. By contrast, 282 of Donelon’s contributors gave $1,000 or more. Here is the list of MATT PARKER CONTRIBUTIONS
We have long maintained that no elected regulator should be allowed to receive so much as one dollar from individuals or industries they regulate. While the official may be incorruptible and the epitome of virtue and integrity, the perception is, and always will be, that their decisions will always come down on the side of the contributor. That is one facet of campaign reform that should be—must be—addressed before we can ever say with a straight face that we live in a democracy where everyone gets the same consideration.
The best example of this is that of the billionaire brothers Farris and Dan Wilks who amassed their fortunes in the West Texas fracking boom. The brothers ponied up $15 million to Cruz’s Super PAC. Now let’s say Cruz somehow, God forbid, becomes President. Later, West Texas residents become concerned about health issues associated with fracking. Their drinking water suddenly becomes contaminated and undrinkable and their livestock suddenly become sick or start dying. Should they even bother appealing to a President Cruz’s humanitarian side for help?
We all know you can check that box “No.”
Does anyone truly believe it was coincidence that State Farm’s increasing homeowners’ deductibles from $500 and $1,000 to 5 percent of the home’s value for named storms in 2014? (If you have a home valued at $150,000, for example, your deductible for damage from a named storm just went from $500 or $1,000 to $7,500. Donelon’s “Oh, well” response? “I wish it were not happening, but it is the world of hurricane deductibles that we live in.” http://www.nola.com/business/baton-rouge/index.ssf/2014/07/state_farms_5_hurricane_deduct.html
Does anyone believe it was coincidence that Allstate kept two separate sets of rates for home repair, depending on whether or not the claims coverage was paid by the National Flood Insurance Program (NFIP) or by Allstate? Following Hurricanes Katrina and Rita, Allstate deemed the cost of repairing Allstate-covered damage thusly: 76 cents per square foot for drywall, $23.48 per square yard for carpet, and 80 cents per square foot for painting. But when it came to administering claims under NFIP, claims that were paid by U.S. taxpayers, those same costs were estimated by Allstate as $3.31 per square foot for drywall, $28.43 per square yard for carpet and $1.15 per square foot for painting. (It should be pointed out here that Allstate received a fee for administering NFIP claims, but only if the claim was closed. Thus, it was to Allstate’s benefit to settle quickly—at the higher rates—since the money didn’t come out of Allstate’s pocket.
And does anyone think it coincidence that Allstate and State Farm, applying the tactic taught them by McKinsey and Company (the only private sector firm Bobby Jindal ever worked for) practiced the “delay, deny, defend” method of fighting claims of those who lost everything they owned in the hurricanes? Or that claims for homes where the only thing left was the slab on which the houses sat were denied because the homeowner was unable to prove the home had been destroyed by wind (covered) rather than rising water (not covered)? Or that Katrina blew shingles off roofs in Jackson, Mississippi, 180 miles north of New Orleans, but insurance companies denied similar claims in New Orleans because of a lack of proof that shingles weren’t damaged by rising water instead of wind? Allstate adjusters, worked under strict guidelines to protect the bottom line or risk losing their jobs. http://stlouis.legalexaminer.com/automobile-accidents/allstate-you-are-not-in-good-hands/
Does it seem strange to anyone that insurers were so easily able to pull these scams on premium-paying homeowners in Louisiana?
Or does it seem to be only politics as usual in a state where insurance companies and those affiliated with insurance, banking and defense attorney firms could virtually finance the political campaigns of an insurance commissioner who could be expected to grease the skids when the time came for the companies to employ these tactics against devastated homeowners desperate to settle—even for pennies on the dollar?
Parker or McGehee probably won’t win. The odds are stacked too heavily against them. If it even begins to look as if either one will make a dent in Donelon’s base, you can look for the attack dogs to take over the campaign ads.
But this state deserves better. Donelon might well be as honest as Abe, as righteous as Atticus Finch, as moral as Gandhi and as compassionate as Mother Teresa. I’m in no position to say otherwise.
But as long as the Commissioner of Insurance, Public Service Commission and the Attorney General campaign donations are dominated by regulated industries and individuals affiliated with those interests, the perception will always be there that the offices are bought, owned and run by special interests.
If the attractions of Donald Trump (an offensive Jester) and Bernie Sanders (a likable self-avowed socialist) prove anything, it is that a substantial number of people are fed up with the way our government, in general, serves its citizens and are looking for alternatives.
It only took one thing for me to adopt an ABD (anybody but Donelon) approach to the upcoming election for insurance commissioner – his position that the Office Of Group Benefits plans for state employees were not insurance companies so he could wash his hands of any oversight. The other things (including where his campaign funds originate & a seeming “nothing to see here” approach to their rate structures) are just icing on that cake to me.
Stephen, any thoughts on ABC (anybody but Caldwell)? http://www.soundoffla.com/?p=94.
Yes. Unfortunately my pick for AG would be John Kennedy who currently seems to have his sights set on Vitter’s U. S. Senate seat (and is a shoo-in for re-election as State Treasurer).. I don’t find Landry particularly impressive, but I do think we should replace Caldwell. He may have fulfilled his role as protector of the state officials, but he has ignored things he shouldn’t have that would have protected us as citizens..
Thanks for the feedback, Stephen. I too think Kennedy would have made a fine AG, but I think any of the announced challengers, Jackson, Maley, or Landry will be a dramatic improvement over Caldwell.
Another important article.
Last time Donelon ran for Insurance Commissioner, I noted that huge campaign signs supporting Donelon were plastered on a couple of offices for the mega-insurance companies that the LA Insurance Commissioner purportedly regulates! ‘Nuff said on that account! Anybody but Donelon!
Now hearing that he turned his back on state employees, retirees, & public school employees in the OGB privatization debacle is another indictment of his self-serving character. Anybody but Donelon!
The insurance commissioner’s office, from all appearances, thinks its primary job is to scold Louisiana citizens with a lot of advertising telling them not to commit insurance fraud.
Great article and count me part of the ABD crowd. However, I thought it strange that you mention Senator Cruz in this piece. Who might you be partial to in the upcoming Presidential free for all?
None of the Republicans, that’s for certain. And Hillary’s no better. Bernie Sanders makes more sense than any of the others.
I agree that Bernie appears to be our most logical option. If polls count for anything this far out then evidently more people are starting to feel that way as well.
My experience with big insurance companies over the years has left me screaming to all who stood still long enough to listen that big insurance companies are the robber barons of this era. Thanks for the insight on who’s supporting whom in this race. it’s a deciding factor on who receives my vote.
Louisiana citizens should make it a point to vote out all incumbents. Caldwell and Donelon should be the first cronies to get sent packing.
Tom, Bernie Sanders? Really? Wow.
Great article,Tom, very instructional, big money, big insurance is the game plan for corporate America to destroy our Republic, our Democracy, in order to put all tax money in their coffers, where the citizen, not sitting on the Board, will have any say so. Let us eat cake! ron thompson
[…] Investigative blog Louisiana Voice has scrutinized Insurance Commissioner Jim Donelon’s thousands of donations from insurance companies in his race against a body shop owner. […]
[…] The investigative blog Louisiana Voice also scrutinized Donelon’s campaign finances and argued that no elected official should take money from the industry they regulate. […]