Quackenbush, Former Deputy Will Not Be Charged

February 6, 2002

According to the Sacramento Bee, after an investigation that ran more than 18 months, former California Insurance Commissioner Chuck Quackenbush and his former chief deputy, William Palmer, will not be charged with a crime. Federal, state and Sacramento County prosecutors combined their efforts to investigate the scandal that removed Quackenbush from office, replaced by current commissioner Harry Low.

U.S. Attorney John Vincent commented Feb. 4 that the investigation has been completed and there is no anticipation of any additional federal charges. Task force sources did say, however, that one or more individuals who were not working for the department but were allegedly a part of the funding scheme, are likely to face state charges on minor crimes. Investigators said they tried to make a case against Quackenbush or Palmer, but there was not enough evidence on the documents by themselves.

Quackenbush, who allegedly moved insurance settlement funds to three foundations to help shape his political image, resigned in 2000 and relocated to Hawaii. Palmer, currently practicing law in Sacramento, resigned his post in 1999 following being hit with conflict-of-interest charges by California lawmakers.

Prosecutors had hoped to use information from former Deputy Commissioner George Grays, who pled guilty over a year ago to conspiring with Brian Thompson in the alleged theft of $263,000 from the state Department of Insurance, to implicate Quackenbush, but concluded early on in the investigation that there was not enough information from Grays with which to build a case on. Grays has cooperated with investigating authorities and is awaiting sentencing. Charged with mail fraud, conspiracy to launder money and obstruction of justice, Thompson was indicted on federal charges.

Members of the task force investigating Quackenbush, who also received heat for allegedly conducting foreign trips paid for by insurers regulated by his department, indicated they could not mount a case against the former commissioner or Palmer for that matter, without more evidence, along with someone on the inside to substantiate information Grays had given them.

Both Quackenbush and Palmer will be not charged according to the task force as a result of a lack of evidence that either benefited as a result of the money transfers.

Among the results of the scandal was the formation of the Office of Audit and Ethics, along with stricter new rules.

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