SACRAMENTO, Calif. (Legal Newsline) - With his primary win secured, California Controller John Chiang, a Democrat, enters the race for state treasurer armed with nearly $2.4 million in his war chest - an amount augmented by donations made by attorneys he hired during his tenure as controller.
On June 3, Chiang captured 54.7 percent of the total vote to earn the top spot. His Republican rival, Greg Conlon, finished second, landing 38.8 percent.
While campaign finance records show Conlon has pulled in less than $12,000 in contributions over the past several months, Chiang, in stark contrast, has netted more than $750,000 in donations since Jan. 1, giving him a huge financial edge heading into the general election.
In the span of a single day, Chiang nearly equaled Conlon's total amount, receiving three donations from two Kaye Scholer law firm attorneys the controller had hired prior to his bid for treasurer.
Campaign finance reports show that on June 30, Los Angeles attorney Marc Cohen made donations of $5,000 and $1,353.55 to Chiang's fundraising committee, Chiang for Treasurer, while Washington, D.C., attorney Steven Rosenthal contributed $5,000.
Through California's 1959 Unclaimed Property Law, Chiang retained Cohen and Rosenthal in July 2011 to assist the Controller's Office with claims relating to unpaid death benefits. The two Kaye Scholer attorneys facilitated the settlement negotiations with Prudential Insurance Company of America, which 19 other states subsequently joined.
On Jan. 13, 2012, Chiang announced the multi-state settlement with Prudential would return up to $20 million to the families of deceased life insurance policyholders in California.
More settlements soon followed.
In 2013, Cohen and Rosenthal advised Chiang in the execution of multi-state resolution agreements with 11 life insurance companies worth up to $763 million nationwide, with up to $86.7 million going to California beneficiaries.
In all, Garin Casaleggio, deputy communications director for the controller's office, says Kaye Scholer has engineered 18 settlements, bringing a total of $267 million in unpaid claims for Californians and $2.4 billion nationwide.
Casaleggio noted that Californians to date are still recovering money for insurance claims that were denied. "Every week we're seeing some huge dollar amounts," he said.
From July to April, the controller returned unclaimed life insurance settlements to 6,017 claimants worth a total of $24.4 million.
Casaleggio declined to say how much Kaye Scholer has earned for its work on retrieving the unclaimed claims. A Freedom of Information Act request seeking how much the firm has earned in attorney's fees has been sent to the controller's office.
Prior to the mass litigation against insurance companies, Cohen and Rosenthal previously advised Chiang in 2010, when former Gov. Arnold Schwarzenegger demanded him to decrease all state employees salary to the federal minimum until a budget was enacted.
Financially speaking, Chiang's relationship with Kaye Scholer attorneys even predates him taking office.
In 2006, Cohen and Rosenthal supported Chiang's bid to become California's next controller by donating a total of $1,250 to his campaign, campaign finance records show.
And Cohen and Rosenthal are not the only Kaye Scholer attorneys who have donated to Chiang's past and present political campaigns:
-On Oct. 16, 2006, Steven Werth donated $100;
-On Oct. 16, 2006, Karlene Weg donated $250;
-On Oct. 16, 2006, Paul Gelb donated $125;
-On Oct. 16, 2006, Stacy Phillips donated $250;
-On Oct. 16, 2006, Corrine Rebhun donated $100;
-On Oct. 16, 2006, Ronald Leibow donated $200;
-On July 2, 2013, James Catterson donated $250; and
-On July 17, 2013, Mark Liscio donated $500.
In February, California Lawyer magazine selected Cohen and Rosenthal as winners of its 18th annual California Lawyer Attorneys of the Year Awards for their representation of the Controller's Office.
The state controller, the chief fiscal officer of California, is the state's independent fiscal watchdog, providing fiscal control over more than $100 billion in receipts and disbursements of public funds a year, offering fiscal guidance to local governments, and uncovering abuse of taxpayer dollars.
If elected as California's next treasurer, Chiang would become the state's lead asset manager, banker and financier.
Reach David Yates at email@example.com.