A consumer group said yesterday evidence has been uncovered showing a California Insurance Department attorney destroyed evidence of covert communications with insurance interests.

The accusation came on the same day that Insurance Commissioner Steve Poizner said he was naming Adam M. Cole as general counsel. The announcement described Mr. Cole as a top attorney who has litigated against insurance companies on behalf of consumers and whose law firm recovered more than $5 billion from insurers for policyholders in the last five years.

The complaint about alleged destruction of evidence came from the Foundation for Taxpayer and Consumer Rights (FTCR), which said Mr. Poizner's special counsel William Gausewitz had tossed out a fax sent to him by an insurance lobbyist. The group is seeking Mr. Gausewitz's dismissal.

A spokesperson for Mr. Poizner, Jennifer Kerns, said previously that Mr. Gausewitz would not be fired, the accusations against him were unmerited, and it was not uncommon for staff to submit a declaration to the court.

The fax in question, FTCR said, appears to have served as the basis for a court filing known as a “declaration” that Mr. Gausewitz claimed to have prepared independently for submission to a Sacramento Superior Court this summer.

His declaration was made in relation to a legal wrangle over whether insurance interests would have to pay about $200,000 in legal fees after losing a court fight to block regulations that restricted use of ZIP codes to rate customers.

FTCR began calling for Mr. Gausewitz's ouster last month after obtaining Department of Insurance e-mail documents through a Public Records Act request. FTCR said the e-mails indicated Mr. Gausewitz privately tried to assist companies' effort in court to have the Department of Insurance pay the disputed legal fees.

Insurance industry lawyers later filed a document signed by Mr. Gausewitz in the court case but made it appear the California attorney general had filed it, according to FTCR. Mr. Gausewitz at one point was employed by the insurance trade group American Insurance Association.

The consumer groups said the Department of Insurance, in response to document requests, wrote that “[insurance industry lobbyist Jeff] Fuller faxed a proposed declaration to Mr. Gausewitz. Because Mr. Gausewitz was unwilling to sign the draft declaration prepared by the insurers, he prepared text for an alternative version of the declaration and provided that text to Fuller…Mr. Gausewitz then discarded the fax.”

FTCR called the disposal of the fax “destruction of a key public document” that the group said added “another layer of concern to the incident, which caused the group to call on Commissioner Poizner to fire Mr. Gausewitz.” FTCR said without the original document, “the public cannot know whether or not Gausewitz actually made even a single word change to the industry's requested declaration.”

“By destroying documents, Bill Gausewitz tried to cover his tracks in order to avoid the appearance that he was abusing his authority and serving as an insurance company toady at the Department of Insurance,” said FTCR Executive Director Douglas Heller.

The FTCR also complained about the appointment of Mr. Cole, saying that his law firm Heller Ehrman LLP has frequently gone to court to block enforcement of insurance reform.

Special Reports /

Consumer Group Says Poizner Lawyer Destroyed Fax

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