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home / insurance / in the media

Los Angeles Times
Jun 09, 2000

Quackenbush Exit Time

Times Editorial
The message was clear to state Insurance Commissioner Chuck Quackenbush late Thursday: Quit or face impeachment proceedings in the Legislature. Quackenbush can save California the cost and distraction of impeachment by stepping down now.

As more damaging testimony piled up before a legislative investigative committee Thursday, Quackenbush was under increasing pressure from fellow Republicans to spare the party further embarrassment. If he refuses to resign, he may well face the ignominy of being the first state officeholder in modern California history to be removed by the Legislature.
     
One senior Republican legislative leader was quoted as privately telling Quackenbush's advisors that his support was eroding rapidly. The conduct of his office concerning alleged insurer mishandling of claims from the 1994 Northridge earthquake has come under increasing bipartisan fire in the past two weeks.
     
"Misconduct in office" is the simple standard set by the state Constitution for the Legislature to impeach and remove an elected state official. By virtually any measure, Quackenbush's sorry record qualifies.
     
Four days of hearings in the Legislature this week have established an overwhelming case against the 46-year-old former Army captain. In the past two years, Quackenbush's office threatened to hit insurers with multibillion-dollar fines for alleged mishandling of claims from the Northridge earthquake but settled instead for $12.8 million in "voluntary" donations from the companies to three private foundations established by the commissioner's office. Several witnesses and legislators referred to this flatly as extortion.
     
The foundations were supposed to provide earthquake education and outreach to minority communities that are underserved by insurance companies, but they acted more like personal public relations committees for Quackenbush, who before this debacle had been considered a potential Republican candidate for governor or U.S. senator.
     
The former president of one foundation testified Thursday that she did not remember signing four checks that were paid out under her name. She said the handwriting appeared to be that of a former deputy insurance commissioner, even though the foundation was supposed to be run independently of the Insurance Department. A foundation board member said the same deputy sent him falsified board meeting minutes to sign. These damning revelations are the first solid evidence of possible criminal violations connected to the foundation scheme.
     
A former Quackenbush political consultant said he warned the commissioner last fall of "unconscionable costs" being run up by one of the foundations. Quackenbush has told the Legislature he had no knowledge of the foundations' spending programs, despite mounting evidence to the contrary.
     
Quackenbush's aides have also professed forgetfulness or ignorance about who did what in the state Department of Insurance. In testifying at the hearings, no one would take responsibility for any decisions, whether made in negotiations with the companies or in the establishment and operation of the foundations.
     
There are two possibilities here. One is that, despite his testimony, Quackenbush knew exactly what was going on and approved it. The second is that he didn't know what was happening at the highest levels of the department that the voters entrusted to him, leaving it to founder. Either case amounts to misconduct and warrants his removal from office.
Copyright 2000 Los Angeles Times

 
  

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