The Quackenbush Foundations

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According to news reports, Mr. Quackenbush has set up three non-profit foundations. The foundations are apparently controlled by Quackenbush or other CDI officials, though Mr. Quackenbush has denied that he controls the foundations. The Board of Directors of the foundations, appointed by the Commissioner, are composed of his friends and business associates.

The three foundations are:

1. California Research and Assistance Fund (CRAF)
Board of Directors:
Ron Weekley
Eric Givens

2. California Insurance Education Project (CIEP)
Board of Directors:
Sandy Smoley of The Smoley Group; former Pete Wilson appointee
Lucy Killea of International Community Foundation; former State Senator
Ruben Barrales of Joint Venture: Silicon Valley Network
Elvin Moon of E.W. Moon Inc.

3. Title and Escrow Consumer Education and Outreach Corp. (TECEOC) Board of Directors: UNKNOWN

Expenditures by the Foundations
According to the settlement agreements between the companies and Mr. Quackenbush, each of the foundations was to spend money for very specific purposes related to seismic research and assistance to earthquake victims. However, to our knowledge, not one penny of the money contributed by insurance companies has been used for the purpose stated in the settlement agreements between the companies and CDI.

As revealed in the table below, most of the money expended by the foundations so far has been to benefit Mr. Quackenbush and his family personally, or people associated with him.

A smaller but significant amount of money was given to organizations with little or no relation to earthquake issues.

Foundation Purpose Recipient Amount Spent
CRAF: Approx. $11million contributed by insurers; taken as a pre-tax underwriting charge Seismic research; improvements to claims settlement procedure; limited financial assistance earthquake victims Total spent $5.7 million
    TV spots featuring Quackenbush: $445,000 went to three consultants – Joe Shumate, Don Sipple and David Bienstock – who also worked on Quackenbush‘s 1994 and 1998 campaigns) $3 million
    Strategi, LLC*(see footnote): for “Quake-Ready” program which included a children’s website and TV spots featuring Shaquille ONeal and Quackenbush $1 million
    Sacramento Urban League: Towards construction of a worker training facility; contribution made after Quackenbush joined the Board of the organization $500,000
    PACE minority outreach program $400,000
    Skillz Athletics Foundation: football camp attended by Quackenbush‘s children. $263,000
    100 Black Men organization $200,000
    Freedom Fund for community development: $100,000
    Athletes and Entertainers for Kids: run by Elise Kim, co-owner of Strategi, LLC (see above) Quackenbush is listed as Board Member; former Quackenbush deputy, George Grays is “corporate council chairperson.” $70,000
    911 4 Kids: also run by Elise Kim, co-owner of Strategi, LLC (see above); George Grays is an at large board member $45,000
    Oakland Mentoring Center $40,000
    Meadowview Community Assn., Sacramento $25,000
    Community Connections: A Sacramento organization with which CRAF board member Ron Weekley is affiliated $18,000
    National Latino Peace Officers Assn. $12,000
    Black Film Makers Assn. $10,000
    2nd District Education and Policy Foundation (L.A.) $10,000
    Northern California Reinvestment Consortium $10,000
Foundation Purpose Recipient Amount Spent
CIEP:$1.3 million contributed by insurers; possibly taken as a pre-tax underwriting charge “Created to address recent $400,000 (estimated) studies by the California Department of Insurance indicating many communities in California are underserved by the insurance industry … the project will also promote earthquake safety and preparedness,” according to a CIEP document. Total spent $400,000 (estimated)
    Stoorza, Ziegaus and Metzger: the PR firm that reportedly created the idea for the CIEP $50,000 initial payment; $25,000 per month contract through mid-2001
    CIEP hosted conference on minority outreach issues in Los Angeles UNKNOWN
    CIEP hosted an information booth at a Mudville 9 baseball game on April 16th in Stockton UNKNOWN
Foundation Purpose Recipient Amount Spent
TECEOC:$2.8 million contributed by insurers; considered a charitable, tax-deductible donation Consumer education on Title Insurance and Escrow issues UNKNOWN UNKNOWN

* The “Strategi LLC” referred to on this page is not the same as Strategi LLC, a California Limited Liability Company based in Stockton, California.

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