CA: Campaign 2006 Ad watch: Executive Life bond debacle cited in criticism

The state Republican Party has launched a television ad attacking state Insurance Commissioner John Garamendi for mishandling the collapse of the Executive Life Insurance Co.

The ad targeting Garamendi, a Democrat running against Republican state Sen. Tom McClintock, R-Thousand Oaks, for lieutenant governor, began running Aug. 28 in the Sacramento and Los Angeles media markets.

ANALYSIS: The GOP advertisement attempts to weaken Garamendi, a former gubernatorial candidate and statewide officeholder, by exploiting what is perhaps his greatest political vulnerability.

Garamendi has long been dogged by criticism for allegedly mishandling the collapse of the Executive Life Insurance Co.

In 1991, during Garamendi's first stint as insurance commissioner, he seized control of Executive Life to protect its 330,000 policyholders because of heavy losses in the company's multibillion dollar junk bond portfolio.

Garamendi sold the company's assets in 1992 for $3.25 billion to an investor group financed by Credit Lyonnais, a banking firm owned by the French government. After the firm resold the assets at a hefty markup, Garamendi received intense criticism from many Executive Life policyholders for not getting the best deal on their behalf.

Garamendi claimed he was duped in the deal and said he would have found a different buyer if he had known the assets were being sold to a bank associated with the French government.

Last year, U.S. District Judge A. Howard Matz awarded Executive Life policyholders $190 million from Artemis, a French luxury goods firm that Martz ruled had fraudulently acquired the company's assets. But the judge also challenged depictions of the events by Garamendi and his office, saying their accounts of what happened were "devoid of credibility."

California Auditor General Elaine Howle is due to issue findings this fall on a state audit investigating the disposal of the Executive Life assets.

Garamendi Boasts About Sex Offender’s Endorsement

http://www.metnews.com/articles/affairs091902.htm

It isn’t often that a political candidate brags about being endorsed by a convicted child-molester, but that’s exactly what John Garamendi is doing in his campaign for insurance commissioner.

The Democratic candidate has been playing up an endorsement from Peter Yarrow, the folk singer famous for being one-third of Peter, Paul and Mary—and infamous for serving time for getting naked with a 14-year-old girl.

Yarrow performed this month at a fundraiser at Garamendi’s ranch in the foothills. Garamendi made sure to alert the press with a notice under the headline, “Legendary Folk Singer of Peter, Paul & Mary Supporting Garamendi’s Re-Election Bid.” (It was a repeat performance, as Yarrow played guitar and sang at the ranch one year ago, too.)

And Garamendi’s Web site boasts an endorsement from the sex offender known for singing about magic dragons. A letter from Yarrow, prominently displayed on the site, says, “I am honored to join you as part of perhaps the most caring group of supporters of anyone that I have ever known who is running for political office.”

Caring—and forgiving, too. The Garamendi folks are willing to publicly embrace the singer, despite his rap sheet that might not sit well with some voters.

In 1970, Yarrow pleaded guilty to taking “immoral and improper liberties with ... a female child ... with the intent of arousing ... gratifying the lust, passions and sexual desires ...”

At the time of the crime in Washington, D.C., Yarrow was 30 years old and the girl was a mere 14. If that’s not bad enough, her 17-year-old sister was in the room watching the hanky-panky, according to an Associated Press report on his guilty plea.

“According to the victim’s statement ... , Yarrow who was in Washington on a concert tour, admitted the girl and her 17-year-old sister to his hotel room,” the story says. “Yarrow was reportedly naked when he answered the door.”

The AP report continues:

“Later Yarrow reiterated the couple’s actions were by mutual consent while the older girl looked on.”

The singer spent three months in jail for his offense, and also underwent psychiatric treatment, his attorney told the Associated Press.

Luckily for the folk singer, he had a friend in a very high place. President Jimmy Carter pardoned Yarrow the day before leaving office, thereby protecting the singer from ever having to register as a sex offender.

Yarrow has described the incident as “the most terrible mistake I have ever made,” and in his petition for the presidential pardon, he said he hoped his children “will see a balanced picture, one that understands that their daddy did something very wrong but also one that asserts that their daddy has also done much for society to eliminate want and inequality where he saw it.”

Carter’s acceptance of that explanation helped Yarrow quite a bit, since many of the singer’s later activities involved children around the age of 14.

Last year, for example, Yarrow came to Sacramento as a guest of the state Department of Education to promote his campaign against bullying, taunting and disrespect in the schools.

In his defense, Yarrow apparently has made it through the last three decades without approaching any more junior high girls, and Garamendi appears comfortable allowing Yarrow in the company of his six grandchildren, so the singer is not exactly a sexual predator.

But it certainly is unique to have a major political candidate trying to attract votes by highlighting support from a sex offender who needed a presidential pardon to restore his own voting rights.

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