Odorous contributions: Commissioner collects from insurance companies

Published on

Union Tribune Editorial

San Diego Union Tribune

State Insurance Commissioner Charles Quackenbush is the poster boy for campaign finance reform in California.

Six years ago, as a Republican candidate, Quackenbush declared that accepting campaign money from insurance companies would be “like taking slow-acting cyanide.”

He added: “You can’t take money from the Aetnas and the Allstates and the USAAs. You regulate them. The conflict there is difficult to explain to the voters. It’s like handing a loaded gun to the Democratic strategists. They’ll just accuse you of being bought and paid for by the industry.”

Several months into the 1994 election campaign, Quackenbush was busily collecting campaign contributions from the very companies he would oversee once he won the office. All told, he raised $2.4 million from the insurance industry, about 70 percent of his total donations. His staff hastened to note that the candidate had no choice but to renege on his pledge because his Democratic opponent, Art Torres, was taking money from trial lawyers and others associated with the industry.

Well into his second term, Commissioner Quackenbush hasn’t stopped collecting contributions from the companies he regulates.

During the last six months of 1999, he accepted $216,000 from insurance interests, attorneys who represent them, and company employees. The biggest donor was Fremont Compensation Insurance Co., a financially shaky firm, which ponied up $93,350 for Quackenbush‘s political coffers nine days after he proposed a whopping 18.4 percent increase in workers’ compensation rates. Allstate provided Quackenbush $50,000 six months after he decided not to fine the company for unfair claims practices pertaining to the Northridge earthquake.

Does the phrase quid pro quo seem appropriate?

If that weren’t bad enough, Quackenbush used about $100,000 of these ethically questionable contributions to repay his wife, Chris, for the loans she took out in her failed 1998 bid for state Senate.

Quackenbush‘s office maintains his activities are altogether legal, and they appear to be so — a fact that itself is an indictment of California’s scandalously lax campaign finance standards. But the contributions don’t pass the smell test. Californians can readily recognize that something is terribly amiss when the insurance commissioner accepts large contributions from the firms he regulates and then even transfers part of those contributions to another campaign.

In 1997, the Legislature tried to put a stop to this sleazy practice. But it was stymied by critics who claimed a prohibition would violate the insurance industry’s free-speech rights. Never mind that four of 11 states with an elected insurance commissioner have such a ban, or that the Georgia Supreme Court has upheld its constitutionality.

California’s insurance commissioner, unlike other elected officials, is a quasi-judicial figure who hands down rulings that have a major financial impact on private companies. He should not solicit or accept campaign contributions from these firms.

Consumer Watchdog
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