Attorney general to probe Kaiser for donations to governor
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The Associated Press
Jun 13, 2001

Attorney general to probe Kaiser for donations to governor

State's largest health group dismisses the accusations
The state attorney general is investigating allegations that the nonprofit Kaiser Foundation Health Plan indirectly made contributions to Gov. Gray Davis and others, violating state and federal campaign laws, according to a published report.

Attorney General Bill Lockyer will examine links between Kaiser and physician groups made up of doctors that work with the health plan, the Oakland Tribune reported Tuesday.

"We will be looking into it," said Sandra Michioku, spokeswoman for Lockyer. "There have been some serious allegations made."

The Foundation for Taxpayer and Consumer Rights, in a letter to Lockyer, alleged that the Oakland-based Kaiser Foundation Health Plan "illegally made political contributions to candidates through use of a surrogate political action committee" set up by related for-profit physician groups.

Tom Debley, a spokesman for Kaiser, the largest health maintenance organization in the state, dismissed the allegation, saying the health plan and the physician groups operate separately.

The consumer group says that two physician groups, Southern California Permanente Medical Group and the Permanente Medical Groups Inc., created a political action committee called Physicians for the Group Practice of Medicine.

"The sole source of these two groups' income is, in fact, Kaiser Foundation Health Plan, which has tax-exempt status," the consumer group said in a letter to Lockyer.

Nonprofit, tax-exempt groups are required to use their funds only for the specific benefit they are designated to provide to the public, under state and federal laws.

Public-benefit corporations "should not be diverting those funds" to campaign contributions, Michioku said.

The PAC contributed $220,000 to candidates in 2000, the consumer group said. Gov. Gray Davis was the main recipient of donations from the physicians' political action committee, according to records at the Secretary of State's Office. Davis' campaign committee received $62,000 through the end of last year.

Gabriel Sanchez, a spokesman for Davis' campaign committee, declined comment.

The consumer group, in trying to make its case, pointed to factors it says demonstrates links between the Kaiser Foundation Health Plan and the physicians' political action committee.

In one instance this spring, a foundation health plan lobbyist attended a golf fund-raiser for Davis through a ticket purchased by contributions from the committee, Court said.

But the Kaiser spokesman said the allegation is "just not true." A completely unrelated health-care organization paid for the lobbyist to attend, Debley said. In addition, The Foundation for Taxpayer and Consumer Rights believes "the contributions that funded the political action committee were likely a negotiating point in Kaiser Foundation Health Plan's contract negotiations with Southern California Permanente Medical Group and The Permanente Medical Groups Inc."

"This would necessarily be the case because the only other sources of money from the medical group for the committee would be investment income or donations collected from individual physicians in the medical groups and these would likely have to be listed on the committee's disclosures individually," Court said.

However, Debley denied the allegation, reiterating that the foundation health plan and physicians' group operate separately.

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