Quackenbush Alleges ‘Political Ambush’ Faces Holocaust Questions

By | May 29, 2000

The beleaguered California Insurance Commissioner Chuck Quackenbush is the victim of a vicious smear campaign, his newly hired defense attorney is contending.

At the May 23 Senate Insurance Committee Oversight hearing, Quackenbush stated: “I have become increasingly concerned that this Committee’s agenda is less about reform to benefit consumers and more about a personal political ambush.”

To illustrate his point, Quackenbush asked that copies of an e-mail communication be distributed. The “confidential” e-mail between Richard Steffen, Senator Jackie Speier’s chief of staff, and Anne Mitchell, an Assembly staff member, contains phrases such as “DON’T WRITE A LETTER TO QUACKENBUSH ON ANYTHING. We have to set him up first, which should be fairly easy…he is very adept at warding off controversy-if we do not completely ambush him he will slide out of it.”

“After receiving this document, along with some other worrisome information that indicates some members of the Legislature are aware of and actively participating in this ‘ambush,’ I decided to engage outside counsel-Mr. Donald Heller-to advise me,” Quackenbush stated.

Heller, a former assistant U.S. attorney, was one of the prosecutors of Lynette “Squeaky” Fromme, who was convicted in the 1975 assassination attempt on former President Gerald Ford.

Following his remarks and distribution of the e-mail, Quackenbush reportedly stunned the Senate Committee by walking out of the courtroom, refusing to testify.

Quackenbush recently faced a fresh round of allegations of possible wrongdoing. This time, the controversy is linked to his efforts to pressure a group of European companies to provide lists of Holocaust-era policyholders in compliance with the Holocaust Victim Insurance Relief Act (AB 600), authored by California State Assemblyman Wally Knox (D-Los Angeles).

In a letter to State Attorney General Bill Lockyer on May 16, Knox stated that it had recently come to his attention that the California Department of Insurance (CDI) had “made a secret, possibly illegal, agreement with insurance companies to delay enforcement of the law while the companies sue to block it.” Knox stated in the letter that he knew of no legal authority on the part of the CDI to enter into such an accord, which would, in effect “nullify indefinitely a valid statute.”

Among its provisions, AB 600 calls for the CDI to establish a Holocaust Insurance Registry, from which family Holocaust-era insurance policy records can be accessed by the public. It further mandates that insurers now doing business in California that sold insurance in Europe (themselves or through affiliates) effected between 1920 and 1945, must fully disclose all pertinent information with respect to such policies, including policyholder names, by April 7, 2000.

Failure on the part of a company to do so would result in the revocation of that company’s license to operate in California. Knox emphasized that the law set the effective date for such revocation action as May 7, 2000. Knox also stated in his letter that he had requested status reports on the companies’ levels of compliance on two separate occasions (April 6 and May 1). As those requests had not yet been fulfilled, Knox recommended that Lockyer use all applicable law enforcement powers to obtain the documentation.

According to a May 16 release from Quackenbush’s office, four lawsuits challenging the constitutionality of Holocaust insurance statutes, including AB 600, had been filed in federal court in Sacramento on behalf of more than 30 insurance companies since March 10, 2000. Quackenbush stated that the CDI had filed a 133-page brief and 800 pages of evidence in opposition to the suits. He maintained that “to permit adequate opportunity to take discovery and prepare that extensive opposition to the insurance companies’ motions, we agreed in court-filed documents to defer initiating regulatory action until after the court ruled.”

Knox’s letter indicated that while an initial hearing on the motions had been scheduled for June 6, that date had already been postponed twice, leaving Knox “concerned that other reasons to delay the implementation of the act will arise.” Knox, furthermore, takes the CDI to task for not initiating “enforcement proceedings against non-litigating companies.”

Perhaps the most highly charged statement in the letter is that which urges Lockyer to consider investigation into a $4.2-million donation to a humanitarian fund made by Dutch insurers Aegon, ING and Fortis last December.

Knox said it was not clear whether the donation had been made “in lieu of full and timely compliance with the disclosure law.” He also drew comparisons between the humanitarian fund and “the [CDI’s] actions withregardto companies failing to pay claims for the Northridge earthquake.”

When contacted, the CDI was unwilling to provide any further details on the issue. Representatives of Assemblyman Knox’s office could not be reached for comment.

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