Mercury’s $50,000 Contribution to Quackenbush in Question

May 12, 2000

California Insurance Chuck Quackenbush received a $50,000 campaign contribution from the head of Mercury Insurance Group less than two weeks after regulators froze a proposed enforcement action against the company. Both George Joseph, Mercury CEO, and Deputy Commissioner Dan Edwards agreed that the contribution was not linked to the proposed enforcement action.

The Wall Street Journal reported that in January, California Department of Insurance (CDI) officials in January threatened Mercury and five related insurance units with fines. Authorities alleged that some of Mercury’s independent brokers improperly charged customers fees, mostly for the purchase of auto-liability and property-damage coverage. According to Joseph, the fines were put on the back burner during a meeting between Mercury and department officials.

The news comes at a bad time for Quackenbush, who is under investigation by the state Attorney General’s Office and two legislative committees. Both are looking into whether the Commissioner and department officials allowed companies to avoid paying billions of dollars in fines for allegedly mishandling claims stemming from the 1994 Northridge earthquake.

The Los Angeles Times and the San Diego Union Tribune have both published editorials calling for Quackenbush’s resignation. On May 3, a group of enraged Northridge earthquake victims also called for the immediate resignation of Quackenbush. The group gathered outside the Devonshire Village condominium complex, where six years after the devastating quake, the buildings’ roofs still have not been repaired, because victims have been unable to settle insurance claims.

After Northridge residents called on him to quit, the Commissioner said he would never resign. “Let me emphatically say that I will not be run from office by my political opponents,” Quackenbush told reporters later that day at a press conference of his own. To date, the Commissioner has denied any wrongdoing.

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