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San Francisco Chronicle
Jun 23, 2000

by Phillip Matier, Andrew Ross

Quackenbush's Deals With Title Companies Raise Eyebrows

San Francisco -- In what appears to be a little shell game, Quackenbush's office took a $1.25 million penalty settlement from First American Title Co. that was supposed to go into a title insurance and escrow "education'' account and instead deposited it into a separate earthquake education fund.

That's the fund that has landed Quackenbush in such deep trouble in Sacramento. It's the one that supposedly was used not to help victims of the Northridge earthquake stiffed by insurance companies, but to help out Chuck Quackenbush.

Apparently, the earthquake fund -- which Attorney General Bill Lockyer got a judge to shut down just this week -- was running low on money and needed the dough from the title insurance fund to help pay for $3 million in polls and TV public service ads designed to spruce up Quackenbush's image.

All news, it seems, to First American. Company VP James Dufficy, who negotiated the settlement with the Insurance Department, has provided the attorney general with a sworn declaration saying he was promised that the money would be used for consumer education about escrow and title insurance.

The money was part of a penalty First American paid in a lawsuit settlement with the Insurance Department -- a penalty for consumer rip- offs that critics say was not nearly stiff enough to begin with.

And from the looks of things, it's just going to get hotter for Quackenbush.

Next week the Assembly committee investigating the commissioner's settlements is expected to present witnesses whose testimony may impeach the earlier testimony of both Quackenbush and his top staffers.

Assemblyman Fred Keeley, D- Boulder Creek, told us yesterday that the hearing will be "pivotal.'' He declined to go into specifics of the forthcoming testimony, saying only that it will be on "issues surrounding the settlements and the creation of the foundations.''

"It has to do with who made the key recommendations,'' Keeley said.

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