SACRAMENTO, Calif. (Legal Newsline)-A former insurance industry insider's appointment to a serve a powerful California Senate committee is "really not a big deal" despite a consumer group's vociferous objections, a leading political observer told Legal Newsline.

Tensions between Consumer Watchdog and state Sen. Ron Calderon, D-Montebello, tightened when the new chairman of the Senate Banking, Finance and Insurance Committee appointed a former State Farm lawyer as one of the panel's two principal consultants.

Ken Cooley is a former legislative counsel for State Farm Mutual Automobile Insurance Corp.

Doug Heller, executive director of Consumer Watchdog, decried Cooley's appointment, saying it will give the insurance industry an inside track to the committee. He also told Legal Newsline last week that the appointment could be a move by Calderon "to make sure the industry's perspective has dominance in the committee."

Barbara O'Connor, director of the Institute for the Study of Politics and the Media at California State University-Sacramento, said there are former industry insiders working on public policy at nearly every level of state government.

"There are all kinds of panels and regulatory bodies with former industry folks on them, so it's really no big deal," O'Connor said. "The argument is: You need somebody who understands the industry so they can make important recommendations. The key, of course, is having a person who is intellectually honest and are able to transcend their previous employer."

Bob Jimenez, communications director for Calderon, said Santa Monica, Calif.-based Consumer Watchdog's reaction to the appointment was overblown and largely one-sided.

O'Connor noted that while former legislative staff are often hired by private industry with little question, the transition from the private sector to public service can be rocky because of suspicions they will not be evenhanded.

Take for instance the chairman of the California Public Utilities Commission, Michael Peevey, whose 2002 nomination by then-Democratic Gov. Gray Davis to the powerful regulatory body was fiercely opposed by consumer groups, including Consumer Watchdog, which was then known as the Foundation for Taxpayer and Consumer Rights.

Critics at the time said Peevey didn't belong on the commission because he had served as president of Edison International and Southern California Edison Company. He amassed a personal fortune in the sale of an energy-related business after leaving Edison.

"The consumer groups threw a wheel," O'Connor said of some group's reaction to Peevey's support by leading Democrats, including then-Senate pro Tempore John Burton of San Francisco.

"He is very fair, and the deals that have been cut for consumers are because of Mike's knowledge of the industry," O'Connor said. 'So, it really is a double-edged sword."

Peevey's wife is state Sen. Carol Liu, D-Pasadena. At the time of his appointment, Liu was in the state Assembly. She is a member of the Senate Banking, Finance and Insurance Committee.

Industry insiders, including Jeffrey Fuller, executive vice president and general counsel for the Association of California Insurance Companies, said he expects Cooley to give lawmakers an honest assessment of pending legislation. He urged critics to take a wait-and-see approach to Cooley's appointment.

"He's not going to be an advocate for State Farm," Fuller said in an interview with Legal Newsline from his Sacramento office. "I assume Consumer Watchdog doesn't like him because he worked for State Farm, but I have always known Ken to be a straight shooter and very knowledgeable."

Cooley was chief counsel for the state Assembly Insurance Committee during the 1980s. For that reason, along with his industry experience, Calderon said Cooley was his man for the job.

"His past role as counsel for State Farm only adds to his experience and provides the committee with invaluable insight into the industry and how to best serve those impacted by insurance-related legislation," Calderon said in a statement.

From Legal Newsline: Reach staff reporter Chris Rizo at chrisrizo@legalnewsline.com.