by John M. Curtis
(310) 204-8700

Copyright April 30, 2000
All Rights Reserved.

howing some pretty fancy footwork, Insurance Commissioner Chuck Quackenbush denied knowing the about how Northridge earthquake fines were spent subsidizing his own controversial non-profit foundations. In a bizarre twist, "Some may come here today angry or resentful," remarked Quackenbush, "I have not, I am not. Mortified might be more the word," intelligently showing some contrition before the Assembly Insurance Committee. Yes, he should be ashamed—not only for getting caught, but denying worthy earthquake victims badly needed compensation. Why should Quakenbush be angry? It’s the policy holders fleeced in the aftermath of the Northridge earthquake by cavalier insurers, refusing to pay legitimate claims, who should be furious with this blatant betrayal of the public trust. If consumers can’t trust the insurance commissioner, then whom can they trust?

       Watchdog agencies, like the vaunted Department of Insurance [DOI], are chartered to regulate routine business practices and root-out fraud and abuse. Heavy-handed enforcement of tough insurance laws assures consumers that the insurance industry has some measure of accountability. Unlike the HMO industry—who’s loosely regulated by the Department of Corporations in California—the DOI rides herd on companies selling various types of insurance products in California. Whether it's auto policies or workers compensation, healthy regulations protect against misrepresentation and price gouging. When the very agency on which the public depends for ethical enforcement goes awry, the industry has no way policing itself or enforcing existing laws.

       Egregious conflicts of interest aren’t tolerated by insurers or subscribers, why should they be by government agencies? Admitting he made mistakes, Quackenbush reluctantly conceded that he "made mistakes in judgment" about how he funneled money into undisclosed non-profits in which he had a vested interest. Strong-arming insurance companies to cough up astronomical fines, and settling for pennies on the dollar—a measly $12.8 million—and then ordering companies to make 'voluntary' donations to his own questionable foundations shows more than lapses of judgment. Taking a page out of Hillary Clinton’s play-book, Quakenbush’s wife came out slugging sounding the conspiracy mantra, "A barrage of groundless allegations and innuendo pushed by the envious and ruthless politicians who want him neutralized." Really. Has she paid attention to her husband’s recent admissions? Or is Chris Quackenbush still so euphoric about her husband paying off a $250 thousand debt left over from their 1998 failed state senate campaign [which included a mortgage on her home] that she’s suffering from temporary amnesia?

       Under the Assembly Insurance committee’s interrogation, fellow Republican Assemblyman Tom Mclintock (R-Northridge), didn’t pull any punches, "Either [insurance companies] violated the law and should have been fined or they were innocent and should have been left alone," responding to Quackenbush’s claim that the Insurance Commissioner has the statutory authority to levy reasonable penalities. Taking that a step further, Quackenbush apparently believed that diverting fines into his own foundations was also at his discretion. Acting surprised that his former chief of staff Bill Palmer and campaign manager George Grays directed $263K into a non-profit football training program attended by his two sons, Quackenbush appeared vexed. When asked about a controversial letter denying Farmers’ policy-holders the right to sue if completing a company survey, Quackenbush didn’t remember approving the agreement. Placing a plausible spin on this omission, Deputy Insurance Commissioner David Lagenbacher said he didn’t remember whether he showed it to his boss.

       California and its most populous city can’t afford major scandals going to the heart of the credibility about elected officials. When police departments and respected agencies show corruption, the public loses the delicate bond of trust with its government. Making tenuous admissions and blaming underlings doesn’t go far enough to restore public confidence. Elected representatives and appointed officials must assume the responsibility for managing their departments, regardless of the adversity. When blatant misconduct occurs, department heads shouldn’t pass the buck to subordinates or, when all else fails, smoky conspiracies. Elected officials have no presumptive entitlement to their positions and must answer the bell when their actions are called into question.

       Elected officials like Quakenbush have a constitutional duty to avoid even the appearance of conflicts of interest, let alone glaring abuses demonstrating either incredibly bad judgment or cynical abuses of power. With insurers and HMOs taking the heat, what do you say when public agencies demonstrate more questionable judgment than the industry they’re supposed to regulate? How can the government enforce its laws when its elected representatives act like teenagers or, worse, outlaws? When President Clinton decided to spin his way through his grand jury testimony, did the nation’s chief law enforcement officer really think it would pass unnoticed? Can elected officials like Quackenbush really expect the public to buy his apparent astonishment and incredulous explanations?

       When Quackenbush’s wife proclaims in writing to a Sacramento newspaper that her husband is "a strong likely candidate for governor, senator or other office," does she really think that her husband’s behavior earned him a ticket to higher office? While the California GOP hoped for a new generation of leadership, Quackenbush’s scandal leaves him radioactive. With the GOP already losing ground in the state, is this the type of leader they’re planning on running for higher office? Disappointing as it is to Chris Quakenbush, the Assembly Insurance Committee may recommend censure or even impeachment hearings. California simply can’t tolerate elected officials whose egomania abrogates their duties and clouds their judgment. With enough scandal oozing from Washington, we don’t need any more here in the golden state.

About the Author

John M. Curtis is editor of OnlineColumnist.com and columnist for The Los Angeles Daily Journal. He’s director of a Los Angeles think tank specializing in human behavior, health care, political research and media consultation. He’s the author of Dodging The Bullet and Operation Charisma.

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