Surprise?

Surprise?

Why is it a surprise that Cadillac Deval "is not quite the progressive,
populist lefty?" (David Bernstein, "Fender nBender," Boston Phoenix, July 27,
2007, News page 12) Anyone paying attention knows he is a Harvard corporate
lawyer with two McMansions. Are populists usually appointed to corporate boards?
The clueless are surprised.

Roy Bercaw, Editor ENOUGH ROOM

Fender bender

Last year, opponents thought they had killed auto-insurance reform for good. Its resurrection could be a headache for Deval Patrick.

By: DAVID S. BERNSTEIN

7/26/2007 11:52:16 AM

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Crash test dummies
After their candidate, Kerry Healey, was defeated, Liberty Mutual quickly began buttering the other side of the bread: the company was one of nine “Platinum” $50,000 donors to the Patrick-Murray Inaugural Committee.

Another reform-boosting company, Worcester-based Hanover Insurance, has been particularly cozy with lieutenant governor and former Worcester mayor Timothy Murray, observers say. Hanover was also a Platinum donor for the inauguration, and bestowed a $2 million gift for a Murray pet project: restoration of Worcester’s Poli Palace Theatre. Hanover’s chairman, Michael Angelini, was a co-chair of Patrick’s transition committee.
Recent signs on Beacon Hill indicate to some that Deval Patrick is not quite the progressive, populist lefty that many of his supporters — and detractors — think he is. On issue after issue, Patrick’s instinct is to offer breaks and incentives to corporations and large nonprofits, and it’s beginning to diminish the support of an increasing number of legislators — including several state senators who are crucial to the success on his more ambitious agenda items.

Pushing several would-be allies over the edge was the announcement this past Monday that Patrick’s insurance commissioner, Nonnie Burnes, will end Massachusetts’s decades-long experiment with auto-insurance-rate regulation. Instead of a state commission setting those rates, insurance companies will now have the freedom to compete, within limits. Liberal legislators, who argue that the current system protects poor, young, and urban drivers, have expressed shock that Patrick will usher in this change; they fear that insurers will raise rates most on those who can least afford it, and will punish drivers based on location, credit history, and factors other than one’s driving record. Although Burnes says that she will protect against such outcomes, opponents still think this is a bad, anti-consumer idea that they believed had died when Mitt Romney left office.

This auto-insurance stunner, along with other perceived pro-business policies, has helped push progressive senators Joan Menard, Frederick Berry, Steven Panagiotakas, Marc Pacheco, Dianne Wilkerson, and Patricia Jehlen to sour on Patrick, to varying degrees. These are pols who supported Patrick’s candidacy, and should be solid allies now that he is in office. “There are a lot of unhappy people in the building right now,” says Wilkerson.

This dynamic is contrary to Patrick’s public reputation, which was forged by the high-profile fight over closing corporate-tax loopholes. That battle cast Patrick as the populist, and the legislature — House Speaker Sal DiMasi in particular — as the corporate shill.

But aside from that one issue — which Patrick pushed for the fiscally conservative purpose of balancing the budget without adding new taxes on residents — the governor has embraced a string of what some see as corporate-friendly policies.

Patrick has taken heat, for example, for alleged “corporate welfare” in pushing a $10 million grant to the developers of Boston’s Columbus Center. He enthusiastically supported, and this past week signed, new tax breaks for movie studios to film in the Commonwealth. He supports a sales-tax holiday, seen by some as a gift to retail chains with little benefit to the state. He has endorsed financial breaks to help those building the Boston University biotech lab and the Cape Cod wind farm. And in his bio-med/stem-cell bill, he intends to push a billion dollars of investment to companies and universities.

New gov, old fight
“For a long time, we’ve been the Democratic shield stopping the Republican bullets,” says Pacheco of the State Senate. “We finally have a Democratic governor, and we keep having the same kinds of battles.”

Advocates of auto-insurance reform insist that naysayers such as Pacheco are a small but vocal minority, and that they are the pawns of insurance companies, including Arbella, Plymouth Rock, and Commerce Insurance, which would be hurt by increased competition from national insurers that currently shun the state because of the restrictive rate-setting system.

Nevertheless, criticisms from liberals in the legislature have prompted the governor to unleash his PR machine, to insulate him from Burnes’s decision. Although Patrick is publicly supporting the reform, he has done so with tepid language. Meanwhile, his staff and Burnes herself have stressed that she worked independently, apolitically, and non-ideologically in making her decision. Together they have hammered that point home in a series of public comments.

Burnes tells the Phoenix that she did not have any conversation — any at all — with Patrick concerning auto-insurance reform until she briefed him on her decision days before announcing it publicly. Instead, Burnes, a former Superior Court judge, argues she was required by statute, not driven by ideology, to implement the change. “It really was a legal decision,” she says.

Patrick has another reason to insist it was not his decision. Just three weeks before the Burnes bombshell, Patrick solicited, and accepted, $20,000 worth of contributions from executives at Liberty Mutual, the company fighting hardest for reform. That looks unseemly at best, unless Patrick really was totally uninvolved in the decision.

According to people close to the issue, Patrick’s advisors had to be aware that Burnes’s decision to adopt a market-driven rate system would cause political problems. Those advisors also knew that they gained little or nothing by it: even supporters of the reform concede that the public isn’t clamoring for such a change.

The fact that Patrick allowed Burnes to proceed, then, certainly looks like an example of good government as pledged on the campaign trail — just as his “corporate welfare” items look to many to be smart economic-growth initiatives. In this light, Patrick hired Burnes based on competence rather than ideology or loyalty, gave her the freedom to act independently, and didn’t allow politics to get in the way.

But the reaction by angry legislators demonstrates just how hard it is to insulate any governmental action from charges of politics.

For starters, opponents of the reform, including Pacheco, are pointing to a large number of Romney holdovers on Burnes’s staff — and to specific high-placed employees who formerly worked for State Representative Ronald Mariano, a Democrat who has spearheaded auto-insurance-reform legislation. Those staffers, critics say, influenced the decision by feeding Burnes bad information. Burnes denies the charge.

Then there’s the money trail, including that recent bonanza from almost all of Liberty Mutual’s management team. Edmund Kelly, Liberty Mutual’s CEO, stood beside Romney when the then-governor denounced the existing system as “Stalinist” in 2005. In 2006, Kelly and other Liberty Mutual executives contributed more than $20,000 to Kerry Healey and her running mate, but since the election have opened their wallets for Patrick (see “Crash Test Dummies” sidebar).

But if the Patrick administration was for sale on this issue, the other side — the losing one in this past week’s announcement — was also bidding. Reform opponents Arbella and Commerce Insurance were among those Platinum inauguration contributors. Commerce employees and board members also gave tens of thousands to Patrick’s campaign.

The war isn’t over
Public attacks on Burnes’s staff, or on contributions to Patrick’s campaign, are not as potentially damaging as the other charge being leveled: that Patrick is, at heart, the corporate boardroom director that progressives were willing to overlook when electing him.

If that perception takes hold, particularly in the State Senate, Patrick could find himself under increasing attack from the left — as he was recently by state senators who challenged him to debar Big Dig villain Bechtel from eligibility for state contracts.

How well he quells those concerns may be seen in the coming months, in how big a fight senators, including Berry, Menard, Pacheco, and Wilkerson, are willing to put up to preserve the auto-insurance status quo.

It would be an unwelcome challenge to the administration from the left, particularly if it is joined by Senate President Therese Murray, who is said to be sympathetic to the anti-reform argument — and who has herself received contributions from Commerce Insurance board members.