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Friday, April 21, 2000

The Quackenbush File Fattens

Every few days, there's another revelation of ethically questionable behavior and apparent sweetheart deals in the office of Insurance Commissioner Chuck Quackenbush. This week, it was another foundation started by Quackenbush with funds collected from insurance companies. The foundation's curious history and dubious record of achievement raise more questions about Quackenbush's judgment as a state regulator.

Quackenbush says the whole mess is a political vendetta against him. We call it, at best, incredibly poor judgment and questionable public policy. Official investigations now underway to determine whether any laws were violated should be vigorously pursued.

As The Times' Virginia Ellis reported Thursday, the $1.3-million California Insurance Education Project was established on the recommendation of a politically connected public relations firm, Stoorza, Ziegaus, Metzger & Hunt. The Insurance Commission paid the firm $50,000 to set up the foundation and recruit a board of directors. The new board then signed Stoorza to a two-year contract at $25,000 a month--up to $300,000 a year--to run the foundation to educate minority communities on getting insurance coverage. Most of the money disbursed by the foundation has gone to the Stoorza firm, not programs.

The bulk of the foundation money came from a settlement Quackenbush reached with Farmers Insurance Co. in lieu of an investigation of its handling of claims from the Northridge earthquake of 1994. Quackenbush also established another foundation with $11.5 million paid into it by insurance companies in lieu of massive fines recommended by Quackenbush's staff attorneys. Most of the money disbursed by that foundation went for public service TV commercials featuring--you guessed it--Quackenbush. Not to mention the big insurance company campaign donation that ended up paying off a mortgage on the Quackenbush home.

These issues and others are being investigated by the attorney general's office and the state Fair Political Practices Commission. The Assembly Insurance Committee has hired a former assistant U.S. attorney to investigate the same issues.

Quackenbush restated Thursday his belief that if his office were appointed, not elected, he could "do this sort of work without having to think about the political implications." He still doesn't get it. The evidence suggests that "this sort of work" should not be done by a public official of any kind.


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