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]