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home / insurance / in the media

Los Angeles Times
May 07, 2000

Resign, Mr. Quackenbush

Los Angeles Times Editorial
State Insurance Commissioner Chuck Quackenbush still insists that he had the consumer's interests at heart. How could that be, when he cut a deal that let insurance companies "donate" $12.8 million to private foundations he established rather than pay fines of as much as $3 billion for mishandling claims from the 1994 Northridge earthquake? Much of the money went into what amounts to a political public relations campaign featuring Quackenbush himself and, so far, none has gone to earthquake victims.

Now it seems that Quackenbush was less than truthful when he told an Assembly committee that he was not aware of a $500,000 donation by one of the foundations, at the direction of a deputy commissioner, to the Sacramento Urban League for a new building. In a videotape of a League dinner, Quackenbush jokes that he thought the $500,000 was the initiation fee for getting his seat on the Urban League board of directors. Late Friday, Atty. Gen. Bill Lockyer won a court order freezing the remaining assets of the largest of the foundations after accusing former Quackenbush aide George Grays and two foundation directors--in a civil action--of "persistent fraud and abuse of authority" in their distribution of the money.

It is unlikely that this is the last straw in the scandal that has washed over the Department of Insurance in the last month, but Quackenbush already has lost all credibility as a watchdog over the insurance industry in California.

It's time for Quackenbush to resign.

Quackenbush's job is to enforce the law and get policyholders what is owed them--not to make things easy for the big insurers. If insurance companies unfairly balk at reconsidering denied claims, Quackenbush should force them to do so. If they still refuse, they should be fined. That is what regulators do.

Quackenbush's office maintains a shocking air of arrogance. When the president of the state Senate asked Quackenbush to testify at a hearing,

Quackenbush's office said that would be "redundant" because he already appeared before an Assembly committee April 27. Watch the videotape, his office said.

That 3 1/2-hour Assembly appearance was a sorry affair. Quackenbush made excuses, laid blame on others and expressed ignorance of the major policy decisions that his deputies were making in his name.

At least three investigations are underway, including one into the commissioner's solicitation of political donations from insurance companies. Some of that money went to pay off his wife's debt from a failed state Senate campaign.

It may take months to determine if laws were broken. It is obvious, however, that Quackenbush is not the independent watchdog the people demanded when they voted in 1988 to make the commissioner's job elective rather than appointive.

Curiously, the outrage expressed in letters to the editor, radio talk shows and a homeowners' rally on Thursday seems slow to penetrate Sacramento. Perhaps state lawmakers are reluctant to pounce on

Quackenbush because most of them get insurance company contributions too. Or they may be wary of validating Quackenbush's claim that this is all just a political vendetta against him. This is not just politics. These are serious matters of the ethical responsibilities of an elected public official, a matter of public trust.

Quackenbush has abused that public trust. With all his protestations, the words are empty. His actions demonstrate why California's consumers can no longer believe that he works for them. And so, he should end the pretense. He hasn't been working for the public. He shouldn't be on the public payroll.


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