|
uackenbush's bio is here:
http://en.wikipedia.org/wiki/Chuck_Quackenbush
Quackenbush: Lloyd's Ally Takes Pay Cut
San Diego Reader
Published on August 31, 2006
From $132,000 to $33,000 Per Year
By Don Bauder
The San Diego Reader has located Chuck Quackenbush, the first California
politician/bureaucrat to self-destruct in this century. Present and former
San Diegans were involved in his plunge from grace. Quackenbush is the
former insurance commissioner who resigned in mid-2000 rather than face a
certain impeachment. Where is he now? He is a deputy sheriff in Lee County,
in southwest Florida.
The former commish fell hard. According to another deputy sheriff there,
Quackenbush's salary is "around $33,000 a year," and he has been working the
night shift. He was raking in $132,000 a year as insurance commissioner. The
tall, handsome former California State Assembly member from Silicon Valley,
brimming with military spit and polish, had been groomed by Republicans for
a run at governor or U.S. Senate.
After his resignation, he and his family beat it for Hawaii, where
Quackenbush claimed he was doing political and military intelligence
consulting. People assume that he is still there. I got a tip that he is a
low-rung law enforcer in Florida. I reached a source at the California
Department of Insurance who said that as far as he knew, Quackenbush was a
deputy sheriff in Fort Myers. "We don't really care," he added.
Fort Myers is the second-biggest city in Lee County. The county sheriff's
department confirmed that he is on its payroll as a deputy sheriff. I left
phone messages for Quackenbush and e-mailed him, but he did not answer.
His wife is a real estate salesperson in the area, according to ads in local
media.
Quackenbush was elected insurance commissioner in 1994 and reelected in
1998. But the Los Angeles Times began writing about dubious practices in
claims settlements from the 1994 Northridge earthquake, which did $27
billion of damage in the Los Angeles area. Several large insurers were
subject to billions of dollars in fines because of their inadequate handling
of quake claims. But according to a torrent of news reports at the time, the
insurance companies were let off the hook if they would contribute a
collective $13 million to foundations that had been organized largely by
former staff members of ex-governor Pete Wilson, who began his political
career in San Diego.
These foundations were supposed to educate the public about the importance
of insurance. "The foundations he created weren't for consumers. They were
only there to help Quackenbush run for governor," said whistleblower and
insurance department attorney Cindy Ossias not long after Quackenbush left.
As the media pointed out, one of those so-called foundations, California
Research and Assistance Fund, went astray with its money. As it turned out,
$3 million of that money went to TV ads featuring and glorifying the
politically ambitious Quackenbush. Half a million dollars went to the
Sacramento Urban League, of which Quackenbush was a boardmember. A full
$263,000 went to the Skillz Athletic Foundation, a football camp attended by
Quackenbush's children.
In late April of 2000, Quackenbush went before the Assembly Insurance
Committee and said he was "mortified," although he conceded he had made
mistakes in judgment. His staff members had never told him about where that
foundation money was going, he insisted, although a top aide later denied
that claim. Politicians of neither party were buying his story. Democrats
said he had put together a slush fund with money that should have gone to
quake victims. Republicans largely agreed and put much of the blame on
former Pete Wilson advisers who were shoveling money to their own public
relations firms.
One of those firms was San Diego's Stoorza Ziegaus and Metzger, which was
the state's largest public relations firm, with more than 90 employees. (It
went out of business in 2002, primarily done in by the dot-com/tech
collapse.)
According to press reports, in 1999 the firm had sent out a memo telling how
Quackenbush could use insurance-company money to reverse the perception that
the commissioner was "too closely aligned to insurance companies." A member
of Stoorza's Sacramento office, Mitch Zak, had talked about the concept at
the same time that Marty Wilson, who was with another public relations firm,
was doing so. Both had served in the Wilson administration; Marty Wilson had
been a close adviser of Pete Wilson (no relation) since Pete's days as mayor
of San Diego. Marty Wilson did not respond to queries.
The Stoorza firm wound up getting a $50,000 bonus and $600,000 contract, to
last through 2001. It helped set up a foundation, California Insurance
Education Project, with former San Diego state legislator Lucy Killea on its
board, along with still another Pete Wilson veteran. It's doubtful the
Stoorza firm collected the whole contract, because the Quackenbush flap
erupted in the middle of it.
In any case, the California Insurance Education Project was apparently not
in on the bad stuff -- the TV ads and the diversion of funds to the Urban
League, the sports group, etc. Gail Stoorza-Gill says her former firm had
"absolutely no involvement" in the monkey business quarterbacked by the
California Research and Assistance Fund, and evidence suggests that is true.
"Quackenbush didn't know a thing about insurance; he was nave, was used
terribly," says Jeffrey C. Peterson of Escondido, executive director of the
American Names Association, which is based in Rancho Santa Fe. The
association represents Americans who in the 1970s and 1980s invested in the
fabled insurance market, Lloyd's of London. At Lloyd's, individuals called
"Names," along with corporations, come together to spread financial risk.
American Names concluded that Lloyd's had recruited them only because it was
in deep trouble from asbestos and pollution claims. A group of California
Names sued Lloyd's for fraud. So did the California Department of
Corporations.
According to Peterson, Lloyd's members had provided reinsurance to the
corporations that had insured structures in the area of the Northridge
quake. So Lloyd's faced Northridge, asbestos, and pollution claims at the
same time it was defending itself from fraud suits. But it had an ally in
Quackenbush. Indeed, Peterson believes Quackenbush had been hurriedly picked
for the insurance commissioner job by a San Francisco law firm that
represented Lloyd's.
Quackenbush came to Lloyd's defense in the Department of Corporations fraud
case. Quackenbush wrote a brief favoring Lloyd's. It's rare to have two
separate state agencies opposing each other. The Department of Corporations
suit was thrown out on a technicality.
In the California Names fraud suit, Quackenbush penned a brief supporting
Lloyd's. The California Names lost at the district court level. A 3-judge
appellate panel then overturned the lower court's decision. Then an 11-judge
appellate panel overruled the 3-judge panel, and Lloyd's was home free
again.
Next, the Department of Insurance received $400,000 from Lloyd's and
obfuscated the reason for the payment. The Los Angeles Times reported that
the payment was covered up as "educational briefings." It was widely
believed to be reimbursement for legal work done for Quackenbush's
intervent
|
| |
| |
|
