Ad misleads on Democratic candidate’s venture capitalist past | McClatchy Washington Bureau

A Republican campaign committee is running a TV advertisement that implies California House Democratic candidate Josh Harder took part in business decisions as a venture capitalist that raised health care premiums and exposed consumers’ personal information.

The ad by the Congressional Leadership Fund attacks Harder based on his former work as a venture capitalist at Bessemer Venture Partners, a company that has invested in hundreds of companies. Harder is challenging Republican Rep. Jeff Denham, who represents the 10th congressional district centered around Modesto.

The ad specifically links Harder to decisions made by the companies Bright Health, a health insurance company, and LifeLock Inc., an identity theft protection company.

The Script

San Francisco venture capitalist Josh Harder isn’t like us. Harder got rich by investing millions in a health care company that jacked up rates on consumers. What’s worse? Another company Harder’s firm invested in was fined over $100 million for false advertising and failing to protect consumer information like social security numbers, credit cards and bank accounts.

With shady Josh Harder, it’s always more for Josh and less for you.

Analysis

While the facts about Venture Bessemer Partners investing in those companies and those companies’ actions are true, the ad’s implication that Harder was personally to blame for those issues is a stretch.

Harder worked at Bessemer from 2014 to 2017, and was involved in the company’s investment in Bright Health. A press release from Bessemer on Harder’s promotion to vice president in 2016 touted his help in leading investments in the insurance company.

Venture capitalists generally invest in companies but do not have a lot of direct control over day-to-day company decisions after the investment is made, according to Steven Solomon, a specialist in corporate law and professor at UC Berkeley School of Law.

“Bessemer is a large firm that invests in hundreds of companies,” he said. “VCs do have some rights of governance and might have board seats, but it’s unfair to tag any individual investor with the day-to-day decisions of a company.”

Bright Health was one of many insurers that requested a premium hike in Colorado last year. It requested a hike of 15 percent, lower than the average requested hike among Colorado insurers of 27 percent, according to the Denver Post.

Colorado Insurance Commissioner Marguerite Salazar said in a statement to the Post that the large proposed increases were mostly due to uncertainty in the individual markets as Republicans and President Donald Trump have worked to undo certain provisions of the Affordable Care Act with unclear replacements.

Public records for Bright Health reflect that another partner in Bessemer was a member of Bright Health’s board, not Harder, and there is no evidence that Harder had governing authority over the company.

Harder also left Bessemer to run his campaign before Bright Health requested the hike.

LifeLock was fined $100 million by the Federal Trade Commission in 2015 for failing to guard personal data and inform users when their information was breached. FTC commissioners said the fine was so large because the stated purpose of the company was to protect personal information but it had made the information more vulnerable.

Solomon said the ad’s implication on Harder’s involvement in LifeLock’s breach is more dubious than that one about Bright Health.

“That’s not something the VC would be involved in,” he said. “That’s a series of decisions that led to a mistake, but there’s no indication it was willful.”

Bessemer invested in LifeLock eight years before Harder came on board. It divested in the company last year.