Mercury Insurance is spending millions of dollars to pass Prop 17 this June.

The controversial proposition would allow insurance companies to charge higher rates to drivers who allowed their insurance to lapse anytime during the previous five years. This surcharge is currently illegal in California because it pads the profits of insurance companies on the backs of people without steady incomes, people who loose their jobs and temporarily stop driving and environmentally-minded people who attempt a car-free life-style.

So what is Perata’s role in this scheme?

Back in 2004, Mercury tried to pass legislation similar to Prop 17. Its strategy was to buy off the California Senate Pro Tem at the time: Perata. Mercury lined the politician’s pockets in two ways. First, by contributing extensively to Perata’s campaign. Second, Mercury and Perata arranged for contributions to go directly into Perata’s non-campaign personal bank account.

Mercury (along with other companies) paid a Perata business friend – Timothy G. Staples – $313,000 for fundraising services. Then, Staples kicked back more than $100,000 in “consulting fees” to Perata. Mercury’s strategy worked: Perata wielded his power as Senate Pro Tem to get the measure passed by the California legislature. However, a judge threw out the law because it conflicted with the state Constitution.

Now, Mercury is rehashing its 2004 effort by putting Prop 17 on the ballot. Stay tuned to see if Perata receives campaign contributions from Mercury for his mayoral bid in exchange for endorsing this anti-consumer law.