Privacy Backers Hit in War Chest
More campaign funds for those who killed bill
Sacramento -- Banking and insurance
interests gave more than $700,000 in campaign contributions
in the last election to members of a state legislative
committee that defeated a financial privacy protection
bill, according to a review of campaign finance records by
More than a third of that money, about $254,000, went to
two assemblymen who are members of a moderate Democratic
caucus with a history of opposing the measure.
The nine Assembly Banking and Finance Committee members who
abstained or voted no in the June 17 hearing received a
total of more than $667,000. The three members who voted in
favor of it received $37,450 in total.
On average, legislators who abstained from voting or
opposed the measure received $74,182 -- nearly six times
the $12,500 received from financial interests by those who
The industry has steadfastly opposed increased financial
privacy protections, and the bill's failure marked the
fourth year in a row that some version of it has stalled in
"This bill is a clear illustration of how moneyed special
interests can thwart the public interest," said Jim Knox,
executive director of California Common Cause, an advocacy
group that supports taxpayer-financed campaigns.
"This is a bill that polls show is overwhelmingly popular
with the public, that is identified as the top consumer
protection bill in the Legislature, and yet cannot get out
of the Legislature because of the stranglehold of the
financial services industry."
Supporters of the measure, SB1 by state Sen. Jackie Speier,
D-Hillsborough, say consumers should have a right to decide
if, and how, information about them such as spending
habits, bank balances and payment history is shared by
their financial service providers with other divisions of
the company or outside marketers.
The financial services industry says the bill would harm
companies' ability to serve their own customers, increase
their operating costs and pose practical problems when it
comes to implementing the bill.
BILL HAS LITTLE CHANCE
The measure now appears all but dead. In order to pass out
of the Assembly banking committee, the bill would have to
receive four votes from five moderate Democrats on the
panel who have consistently opposed it.
Backers of the bill say they have given up hope that it
will move forward, and are now focusing their resources on
championing a state ballot initiative to put the issue
before voters. Another hearing is scheduled for July 7.
Major donors to the campaigns were companies, employees,
related political action committees and industry trade
groups including insurers Farmers Insurance Group of Los
Angeles and State Farm of Bloomington, Ill.; credit card
companies including Providian, Household International of
Prospect Heights, Ill. and Capital One of McLean, Va.;
banks including Citigroup, Bank of America, JPMorgan Chase
and Wells Fargo; and credit scoring companies such as
TransUnion, Experian and First Data Corp.
"Farmers (Insurance) has a long history of full political
participation in the democratic process, and we support
people who support a healthy business climate in
California," said Mary Flynn, a spokeswoman for the
THREE TOP RECIPIENTS
The three recipients who received the most money from the
financial industry were members of the group of moderate
Democrats who either abstained from voting or voted against
it. They include Juan Vargas, D-San Diego, who received
$135,600; Ed Chavez, D-La Puente (Los Angeles County), who
received $118,800; and Ronald Calderon, D-Montebello (Los
Angeles County), who received $91,300.
Chavez and Vargas voted against a previous version of the
bill on the Assembly floor last year; Calderon is a
freshman, but his brother, Tom, an Assemblyman who has
since been termed out, also voted against it. Chavez's
contributions from the finance industry represented 22
percent of his total.
Chavez did not return two telephone calls seeking comment.
When approached on the Assembly floor Friday afternoon,
both he and Calderon walked out of the chambers. Vargas,
when approached, said he would not discuss the issue with
The Chronicle, saying the newspaper "has stepped over the
line on this issue."
The three banking committee members who received the least
amount of money from the industry were Assemblywoman
Patricia Wiggins, D-Santa Rosa, the chairwoman of the
committee, who received $13,100; Ellen Corbett, D-San
Leandro, who received $9,500; and Cindy Montanez, D-San
Fernando, who received $1,700. Wiggins, Corbett and Wilma
Chan, D-Alameda, who received $14,850, all voted for the
measure in the Assembly last year.
Of all the major corporate donors, only Household -- which
has since been acquired by HSBC Holdings Plc of London --
consistently gave to members who voted in favor of the
measure this year and last.
The pattern between campaign money and a politician's view
on an issue did not always hold.
Montanez, for example, abstained from voting for the
measure in the Assembly hearing, but received the smallest
amount of contributions from financial interests out of all
-- $1,700, with $1,100 coming from two different Wells
Knox said his group's study found that the financial
services industry was spreading campaign money throughout
the Legislature, with only a slight majority of 60 percent
going to its supporters.
But The Chronicle's findings show that 83 percent of the
campaign money given to Assembly banking and committee
members went to officials who take the industry's side.
"It's a pretty common dynamic to reward your supporters and
keep them in line," Knox said. "The data demonstrates that
the lines have really been drawn.
They're clearly upping the ante with the folks who are in
FOLLOW THE MONEY
The members of the Assembly
Banking and Finance Committee, how much money they received
from the financial services industry and how they voted on
SB1, a financial privacy protection bill:
Patricia Wiggins, D-Santa Rosa (chair) -- $13,100.
Wilma Chan, D-Alameda -- $14,850.
Ellen Corbett, D-San Leandro -- $9,500.
Russ Bogh, R-Cherry Valley (Riverside County) (vice chair)
Ronald Calderon, D-Montebello (Los Angeles County) --
Guy Houston, R-Livermore -- $77,300.
Tony Strickland, R-Moorpark (Ventura County) --
Ed Chavez, D-La Puente (Los Angeles County) --
Lou Correa, D-Santa Ana -- $66,154.58.
Tim Leslie, R-Tahoe City -- $34,800.
Cindy Montanez, D-San Fernando -- $1,700.
Juan Vargas, D-San Diego -- $135,600.
In determining financial industry contributions, The
Chronicle used all donations from readily identifiable
entities with financial business, including banks,
brokerages and mutual funds, insurance companies, credit
card companies, financial software companies,
mortgage-related businesses such as title companies and
financial information companies such as credit-scorers, as
well as their trade groups, individual employees and
political action committees. The results do not include
donations from nonfinancial opponents of the bill, such as
retail associations or media concerns such as AOL Time
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