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Mercury Insurance, the sixth largest auto insurer in California, sells more than a billion dollars worth of insurance policies in California each year. Mercury has averaged an annual profit of $93 million over the past three years.

But it's the small share of those profits that Mercury spends in Sacramento that may be the most important. Mercury Insurance has, for years, walked the lines of illegal insurance practices, often crossing far over the line in search of new ways to increase profits. As a result of their recklessness, Mercury has lost some big legal and regulatory battles in recent years.

Recently, Department of Insurance regulations forced Mercury to stop a practice in which the company illegally discriminated against drivers who had lapses in insurance coverage. And a San Francisco Superior Court judge recently ruled that Mercury was advertising a lower premium than most customers would actually pay because the company was allowing its agents to add illegal broker fees on top of the rates it was allowed to charge by the Department of Insurance.

So Mercury has responded as it best knows how: by throwing money at politicians.

A common phrase in Capitol politics these days is "pay to play" (contribute to a politician and your special interest can get in the mix for a variety of benefits -- contracts, legislation, etc.). But Mercury does not stop at merely playing; this company pays to win. And the company has used loopholes in the state's campaign finance laws to contribute much more than the allowed $3,200 per candidate each election cycle.

Between 2001 and 2002, Mercury contributed over $1.2 million to politicians and their causes (such as $200,000 to a politician-led effort to overturn term limits). Most of that money has gone to Democrats, who hold the large majority of offices in the California. And as the money flowed through the political channels, the gates have opened for Mercury's strategy of undermining the courts and insurance regulators in the Legislature.

View the timeline of Mercury's Pay to Win politics .

UP FOR SALE: Mercury's Effort to Stick It to Consumers and Snub the Voters

SB 841 (Senator Perata, Oakland -- $35,000 from Mercury in 2002): This proposal would have allowed insurance companies to charge higher rates to drivers who have had temporary lapses in coverage, or who had never purchased insurance previously. This is illegal under voter-approved Proposition 103, which protects drivers from arbitrary discrimination based on whether or not they were previously insured. When former Governor Gray Davis signed the bill, after previously vetoing it as a violation of Proposition 103, FTCR went to court to stop Mercury's power-grab.

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