by Steven Greenhut | July 17, 2017 8:27 am
SACRAMENTO – A letter late last month from the state Legislature’s six special-interest caucuses asking California lobbying firms to provide legislators with detailed demographic data has sparked debate and controversy within the Capitol and media.
The Sacramento Bee reported last week that “leaders of the Legislative Asian Pacific Islander, Black, Jewish, Latino, LGBT and Women’s caucuses” are seeking information about the “race, ethnicity, gender and openly gay or lesbian orientation” of the employees of lobbying firms.
Supporters of the request say it’s “intended to expand conversation about cultural diversity in the Capitol workforce,” according to the Bee report. Critics believe it may instead be the first step toward something like a quota system and note that legislators aren’t required to report this kind of personal information about their employees.
The data request has taken on partisan overtones, as well. The conservative Breitbart news site found it ironic that the Democratic-dominated caucuses want detailed personal data on lobbying firms “while the state refuses to give voter data to President Donald Trump’s voter fraud commission.”
The request for data, however intrusive it came across to the lobbying firms, was made in a letter and is not currently the subject of any legislation. Meanwhile, members of both parties have voted overwhelmingly in favor of expanding an already far-reaching mandate for similar data from insurance companies that do business in California.
That legislation was amended significantly late last week. Instead of giving the imprimatur to the Department of Insurance to seek out more data from insurers without doing an official rulemaking, it limits the department’s power. But the legislation is a reminder that other industries already deal with these kinds of demographic data requirements.
Currently, insurers that write California premiums in excess of $100 million biennially are required under the California Department of Insurance’s 2012 “Insurance Diversity Initiative” to provide the department with detailed demographic data about insurance-company suppliers. Insurers must “periodically submit to the insurance commissioner a report on its minority, women and disabled veteran business enterprise procurement efforts,” according to state law.
Senate Bill 488, by Sen. Steven Bradford, D-Gardena, expanded that reporting requirement to include businesses controlled by veterans (not just disabled veterans) as well as those owned or managed by lesbian, gay, bisexual or transgendered people. It passed the Senate in late May on a bipartisan 38-0 vote. The clear goal of these surveys is to use the highly regulated nature of the insurance industry to pursue social goals that go beyond the stated goals of insurance regulation.
For instance, the Senate analysis notes that including the new categories of business owners “will open the door or economic opportunity more broadly.” Yet the analysis makes clear that the purpose of insurance regulation is not to promote economic opportunities for various demographic groups but to ensure insurance companies “are financially able to fulfill their obligations to policyholders and that they are treating consumers fairly.”
Lobbying firms likewise are regulated by the state, so there’s fear that the letter seeking data will turn into something more pernicious. “If a firm isn’t diverse and voluntarily provides data, some legislators may feel less inclined to work with them,” explained the Bee report. In addition, lobbying firms might view the request as something less than voluntary.
Likewise, insurance companies are routinely asked by the Department of Insurance to provide data voluntarily that conforms to controversial political objectives. There’s fear in the industry that if a company doesn’t comply, it could suffer repercussions from a department that holds ultimate authority over the prices they are allowed to charge consumers.
There’s no question that regulators continually expand their requests. Assembly Bill 53 in 2012 mandated the provision of supplier demographic data, but the Department of Insurance (DOI) then issued a 2014 data call for information about the diversity of insurance-industry board members, which was not specifically authorized by the legislation. As part of that diversity initiative, the DOI participated with four other states and the District of Columbia in collecting the board member information, which was used to highlight the large percentage of white males at the helm.
“Since the initial AB53 data call in 2013, DOI has expanded their diversity data call efforts to include an entire new effort (board member diversity), insurer activity in other states (collecting data for multiple states), increased data call frequency from every other year to annual, and added demographic categories not included in AB53 (LGBT and veteran-owned business enterprises),” explained the Senate analysis. The Senate legislation in its original form would mainly have granted the department authority it already had been exerting on its own.
There are parallels here with the letter from the legislative caucuses. Will the caucuses follow up the request to registered lobbyists with a legislative mandate? If they do so, will they continue to up the ante? Lobbying firms are concerned, but they aren’t the only industry that faces such “requests.” Some lobbyists downplay the recent letter and argue that there’s not much the legislators could do even with detailed data. Others nonetheless worry that the request is just a precursor of things to come.
Steven Greenhut is Western region director for the R Street Institute. Write to him at [email protected].
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