In a stunning exchange during a House committee hearing, Congressman Jay Obernolte (R-CA) exposed the “transparently partisan” activities of Blue Shield of California and its CEO, Paul Markovich. Obernolte pinned Markovich down on why a healthcare giant funneled half a million dollars into a committee that fueled Gavin Newsom’s “Prop 50”—a blatant mid-cycle redistricting scheme designed to flip five congressional seats to Democrat control.
The “Blank Check” Strategy 
Obernolte slammed Prop 50 as an effort to erode voter trust by shifting congressional power mid-cycle, calling it an “enormous” and “partisan” political debate for a health insurance company to wade into.
Markovich attempted to claim the company didn’t technically support Prop 50, but rather wrote two massive checks for $250,000 each to a fund with “no specified purpose”—only for Gavin Newsom to later “purpose” those funds for the redistricting measure.
A visibly astonished Obernolte forced the CEO to admit the company handed over half a million dollars without knowing which ballot measure they were actually supporting.
From hearing:
Congressman Obernolte: “…and how we can better allocate ratepayer dollars to health care costs. Mr. Markovich, I was pretty astonished last year when I heard that Blue Shield had contributed half a million dollars to a committee supporting the passage of Prop 50 in California. Prop 50, as everyone in this room knows, was an effort to shift five congressional seats from Republican control to Democrat control. It was a pretty transparent partisan undertaking that passed. Reasonable minds can disagree whether or not that’s something that should have been supported. I myself feel like mid-cycle redistricting erodes voters’ trust in our elections and our democracy. I opposed doing it in Texas, I opposed doing it in California. Reasonable minds can have a discussion about that, but I was just astonished that a health insurance company would wade into a political debate in such an enormous way. Why on earth did you do that?”
Paul Markovich: “Well, respectfully, Congressman, we didn’t do that. What we did—we have a long history at Blue Shield of California of contributing to candidates from both parties at the federal and state level, including Governor Schwarzenegger, Brown, and Newsom. And we try to support candidates that we think will be thoughtful about healthcare policy. And this contribution to a fund that did not have a specified purpose is something we committed to as a part of that. After that contribution had happened, the governor then purposed those funds for Proposition 50, and our plan did not take a position on it.”
Congressman Obernolte: “Okay, to be clear though, these were two different checks for a quarter million dollars each to a ballot measure committee, not a candidate. I mean, we understand supporting candidates, but this was to support a ballot measure. So if not Prop 50, what ballot measure did you think you were supporting?”
Paul Markovich: “Well, we didn’t know, neither we nor the other healthcare companies—”
Congressman Obernolte: “You wrote a half a million dollar check not knowing what ballot measure you were supporting?”
Paul Markovich: “We and other companies, including other healthcare companies, all contributed to this account. And it’s not uncommon, particularly in California with lots of propositions, where candidates would prefer contributions to these types of accounts as opposed to direct contributions to their campaign support.”
Congressman Obernolte: “Well, now knowing what you know, do you regret having made that contribution, knowing that—this was the only—Prop 50 was the only proposition that this committee supported.”
Paul Markovich: “Well, we did not support or oppose Proposition 50, we didn’t take a position on that. So, you know, it’s a decision we consciously made going in, as did others, and just didn’t have control over where it went afterwards.”
Congressman Obernolte: “All right. Well, let me—You in your testimony said that you think that our healthcare system needs some tough love. Respectfully, I’d like to offer you some. When a health insurance company wades into such an obviously political topic like that, it not only erodes your ability to work with folks on the other side of an issue, but also erodes consumers’ trust in the system as a whole. So please don’t do that again.”
“GAVE THE MONEY AWAY”: Jay Obernolte Shreds Blue Shield CEO Over Newsom’s $500K Slush Fund
