State Farm

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State Farm Mutual Automobile Insurance Company is the largest provider of auto insurance in the U.S., the leading US personal property/casualty insurance company (by premiums), and the leading home insurer. It also offers nonmedical health and life insurance through its subsidiary companies. Founded in 1922 by G.J. Mecherle in Bloomington, IL State Farm now has 17,000 agents in the U.S. and Canada.[1] It also has a federal savings bank charter (State Farm Bank) that offers consumer and business loans through its agents and by phone, mail, and the Internet.[2] Top competitors are Progressive Corporation, Allstate, and GEICO.

The Illinois-based State Farm had a net income in 2010 of $1.8 billion, up from $777 million in 2009. Its CEO, Ed Rust, was paid $10.2 million in the same year.[3]

Ties to Pete Peterson's "Fix the Debt"

The Campaign to Fix the Debt is the latest incarnation of a decades-long effort by former Nixon man turned Wall Street billionaire Pete Peterson to slash earned benefit programs such as Social Security and Medicare under the guise of fixing the nation's "debt problem." State Farm is part of the Campaign to Fix the Debt as of February 2013.

This article is part of the Center for Media and Democracy's investigation of Pete Peterson's Campaign to "Fix the Debt." Please visit our main SourceWatch page on Fix the Debt.

About Fix the Debt
The Campaign to Fix the Debt is the latest incarnation of a decades-long effort by former Nixon man turned Wall Street billionaire Pete Peterson to slash earned benefit programs such as Social Security and Medicare under the guise of fixing the nation's "debt problem." Through a special report and new interactive wiki resource, the Center for Media and Democracy -- in partnership with the Nation magazine -- exposes the funding, the leaders, the partner groups, and the phony state "chapters" of this astroturf supergroup. Learn more at PetersonPyramid.org and in the Nation magazine.


Ties to the American Legislative Exchange Council

State Farm is a member of the American Legislative Exchange Council (ALEC), a recipient of ALEC's 2011 Private Sector Member of the Year Award, and a "Chairman" level sponsor of 2011 ALEC Annual Conference, which in 2010, equated to $50,000.[4]

A list of ALEC corporations can be found here.

About ALEC
ALEC is a corporate bill mill. It is not just a lobby or a front group; it is much more powerful than that. Through ALEC, corporations hand state legislators their wishlists to benefit their bottom line. Corporations fund almost all of ALEC's operations. They pay for a seat on ALEC task forces where corporate lobbyists and special interest reps vote with elected officials to approve “model” bills. Learn more at the Center for Media and Democracy's ALECexposed.org, and check out breaking news on our PRWatch.org site.


Roland Spies, General Counsel at State Farm, represents the company on the corporate ("Private Enterprise") board of ALEC as of 2011. [5] Emory Wilkerson, Lead Counsel and Managing Attorney at State Farm, represents the company as the corporate co-chair of ALEC's Commerce, Insurance and Economic Development Task Force as of 2012.[6]

Ad boycott against Air America Radio

State Farm refused to advertise on the progressive Air America Radio. In October 2006, around 90 companies, including State Farm, told ABC Radio Networks that they did not want their ads to play on radio stations that carried Air America Radio. [7] [8] [9]

Hurricane Katrina

Open Secrets wrote in September 2008: "in the three years after Hurricane Katrina, which was the insurance industry's single largest insured loss ever, according to the New York Times, insurance companies have had to defend themselves both in court and on Capitol Hill. Congress ordered an investigation into whether major companies, including State Farm and Nationwide, shirked financial responsibility by declaring that flooding, rather than wind, caused the damage to many homes (many private insurance policies don't cover flood damage, unbeknownst to their policyholders)." [10]

Senator Trent Lott sued State Farm over Katrina damage

Former U.S. Senator Trent Lott (R-Mississippi), the number two Republican in the Senate, sued State Farm and has since settled with the company over the loss of his house to Hurricane Katrina in 2005. Lott continued his fight with the insurance industry in the Senate. He calls the industry "mean-spirited" and "arrogant" and criticizes the executive pay and profits within the industry.[11]

Personnel

Key executives (2011) [12]

  • Edward B. Rust, Jr., Chairman and Chief Executive Officer
  • Michael Davidson, Vice Chairman and Chief Agency and Marketing Officer
  • James Rutrough, Vice Chairman and Chief Administrative Officer

Board of Directors (2011): [13]

  • Dan E. Arvizu – Director, National Renewable Energy Laboratory
  • Gerald M. Czarnecki’s – Senior Managing Director and Executive Producer, Ventureland Productions, LLC
  • Christopher C. DeMuth’s – Distinguished Fellow, Hudson Institute
  • W. Steven Jones – Professor of Organizational Behavior and Strategy, University of North Carolina
  • W. H. Knight Jr. – Professor of Law, Seattle University School of Law
  • Judith A. Muhlberg – Consultant on Strategic Communications, Gagen MacDonald LLC
  • Susan M. Phillips – Former Dean and Professor of Finance, School of Business, George Washington University
  • Edward B. Rust Jr. – Chairman of the Board, President and Chief Executive Officer, State Farm Mutual Automobile Insurance Company
  • Paul T. Stecko – Executive Chairman, Packaging Corporation of America
  • Pamela B. Strobel – Former Executive Vice President and Chief Administrative Officer, Exelon Corporation
  • Michael L. Tipsord – Vice Chairman and Chief Operating Officer, State Farm Mutual Automobile Insurance Company
  • John D. Zeglis – Former Chairman of the Board and Chief Executive Officer, AT&T Wireless

Political Contributions and Lobbying

State Farm spent $3.62 million on lobbying activities in 2010. [14] A list of its lobbyists and lobbying firms can be found HERE. The list of bills State Farm lobbied on can be found HERE.

Open Secrets latest information about State Farm is from 2008. That year, State Farm gave a combined total of $4.1 million in federal and state political contributions.

Since 2000, CEO Edward Rust has given over $50,000 to political campaigns.[15]

Contact details

1 State Farm Plaza
Bloomington, IL 61710
Phone: 309-766-2311
Fax: 309-766-3621
Web: http://www.statefarm.com

Resources and articles

Related SourceWatch articles

Featured SourceWatch Articles on Fix the Debt

External articles

References

  1. State Farm, "Being There. The Legacy of State Farm", accessed February 8, 2013.
  2. State Farm Profile, Hoovers, accessed July 10, 2011.
  3. State Farm Profit Doubles to $1.8 Billion on Underwriting,"Bloomberg Businessweek. May 17, 2011"
  4. American Legislative Exchange Council, 2011 Conference Sponsors, conference brochure on file with CMD, August 11, 2011
  5. Private Enterprise Board, ALEC website, accessed July 8, 2011.
  6. American Legislative Exchange Council, Commerce, Insurance, and Economic Development Task Force, organizational website, accessed April 2012
  7. Marc Fisher, "Air America, in the Throes of Victory?", The Washington Post, December 10, 2006.
  8. "Air America on Ad Blacklist?", FAIR, October 31, 2006.
  9. "Air America Blackout", FAIR.org/ABC memo, October 25, 2006.
  10. Lindsay Renick Mayer, "Like a Good Neighbor", Open Secrets, Sept 2, 2008.
  11. Brian Faler, "Lott, 'Scorned' After Katrina, Targets State Farm, Allstate ", Bloomberg.com, May 20, 2007.
  12. Key people, Hoovers, accessed July 2011.
  13. Board of Directors, State Farm website, accessed July 10, 2011.
  14. Center for Responsive Politics, State Farm 2010 lobbying, Open Secrets, accessed July 10, 2011.
  15. Edward Rust Contributions,"Illinois State Campaign Look-Up"