Logue: 1991 bond sale by Garamendi proved costly backroom deal

By From page A1 | July 20, 2014

FAIRFIELD — A 1991 sale of bonds by John Garamendi when he was insurance commissioner for California was a backroom deal that shows it’s time to retire Rep. Garamendi, says his 3rd District congressional election opponent, Dan Logue.

State Assemblyman Logue, R-Loma Rica, noted Sacramento Bee columnist Dan Walters’ account this week about Garamendi seizing Executive Life, contending its junk bond portfolio was too risky, and selling the bonds to financier Leon Black’s clients for $3.25 billion.

The bonds, Walters wrote, turned out to be worth billions more and netted Black somewhere between $500 million and $1 billion.

David O’Connell, campaign manager for Logue, said the 1991 action by Garamendi, D-Walnut Grove, represents a pattern of poor judgment.

“That’s part of his record of incompetence,” O’Connell said. “Look at the results of his being in office, what it costs taxpayers.”

Garamendi’s campaign office declined Friday to comment on the issue.

Columnist Walters referred to a Forbes magazine article critical of the bond sale.

“John Garamendi graduated Harvard Business School, but must have slept through his finance classes,” the story began. “Fellow alumnus Leon Black was clearly wide awake during his.”

“In the guise of protecting the public, an ambitious politician opened the door to vast riches for an equally ambitious New York financier,” continued the Forbes account, which said the article shows “what happens when politicians with scant understanding of how markets work match wits with financiers who do.”

O’Connell said Garamendi’s entire record, including the 1991 bond sale, “is an issue in the campaign.”

Garamendi sold an insurance company’s assets at a $4 billion loss, the Logue campaign said. Many policyholders, some of them elderly and disabled, struggled to get by on monthly annuity payments up to 50 percent less than what they had been promised, according to Logue’s campaign.

O’Connell said Logue would never do something so foolish.

Reach Ryan McCarthy at 427-6935 or [email protected]

Ryan McCarthy


Discussion | 3 comments

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  • Mel SandoJuly 20, 2014 - 9:17 am

    The main reason Mr Logue would never do something so foolish is he is not running for insurance commissioner. But he has been endorsed by the same people who shut down the government and think women need their bosses approval to access covered healthcare. I do wonder if he is foolish enough to go along with that.

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  • Mr. PracticalJuly 20, 2014 - 4:29 pm

    Mel, the Hobby Lobby case had to do with the Federal government overstepping its bounds by mandating benefits that interfere with religious beliefs. It in no way prohibits access. The employee does not have to work there and they certainly can choose to purchase their insurance elsewhere. It's just one of the dozens of choice killing issues with the law. I would prefer not to have free office visits. I would rather have a copay to reduce my premium. I no longer have that option. I hope that Logue would not only agree with the Supreme Courts decision, but would support repeal and replacement of the law.

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  • Vato BlancoJuly 20, 2014 - 7:28 pm

    Would someone please explain why a resident of Chico decided to run for election in Solano County? Isn't Logue welcome in his home district?

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