Calif. Commissioner Quackenbush Resigns; Probes Continue

California Insurance Commissioner Chuck Quackenbush resigned June 28 after months of accusations that he used millions of dollars from an earthquake fund established by his office to further his political career. He was to testify June 29 before a legislative committee on those very accusations.

The resignation, effective July 10, came after a night of negotiations with state legislators and attorneys in which Quackenbush made an effort to limit any civil or criminal liability. By resigning, Quackenbush averts any possibility of impeachment.

However, Attorney General Bill Lockyer said his office did not offer Quackenbush any deals and would continue its probe into allegations that claims following the 1994 Northridge earthquake were not settled appropriately by insurers. Instead of being fined, insurers were allegedly forced to donate nominal amounts to an earthquake fund that was to provide earthquake education and research. How those funds were used has also been a part of the investigation.

“If crimes have been committed by anyone associated with these actions, my office will take action to see to it that they are prosecuted,” Lockyer said in a statement. “We will seek civil penalties and restitution where appropriate.”

Quackenbush was one of only two Republicans elected to statewide office in California. Governor Gray Davis, a Democrat, will appoint a replacement for Quackenbush.

“I will name someone of unquestioned integrity, with the ability and experience to restore credibility to this important office,” Gray said in a statement.

According to Jerry O’Kane, chief executive officer of IBA West, names mentioned most prominently thus far include former Assemblyman Richard Katz, former State Senator Tom Umberg, Congressman Gary Condit (D-Calif.), former State Assembly- man Louis Caldera, and StateSenator Jackie Speier (D SanFrancisco/San Mateo).

Suggested alternatives from within the Davis administration are Aileen Adams, director of the Department of Consumer Affairs, former Congresswoman Lynn Schenk, now the governor’s chief of staff, and Maria Contreras-Sweet, secretary of the Business, Transportation and Housing Agency.

O’Kane says that also under discussion “is the possibility that the governor would immediately replace Chief Deputy Michael Kelley and leave the position of Insurance Commissioner unfilled for some time.”

In what could be one of his final acts in office, California Insurance Commissioner Chuck Quackenbush announced on July 5 that Professor Clark Kelso would take over as Chief Deputy Commissioner of the California Department of Insurance (CDI) until Governor Davis appoints a replacement.

Topics California