It's Nothing But Bribery

Here in California, it is legal for insurance companies to offer political contributions at any time to the state’s Insurance Commissioner, in this instance it’s Chuck Quackenbush (and no, I didn’t make up that name).

It is also, apparently, legal to offer those political contributions at the same time that the insurance company has business before the commissioner or within a week or so after.

It is apparently legal for the commissioner to transfer those political contributions to pay off his wife’s personal loans from her own failed bid for public office, in this instance, her failed run for the state Senate.

Finally, it is also legal for Insurance companies with business before the commissioner also donated tens of thousands of dollars directly to his wife’s failed campaign.

Now, correct me if I’m out of line here but isn’t all of this pretty much the dictionary definition of outright bribery?

Consider, if you will, the following.

Quackenbush recommended that financially troubled Fremont Compensation Insurance Co. be allowed to raise their rates by 18.4%, an action that always equals consent by the state Dept. of Insurance. Nine days later, Fremont Compensation Insurance Co. deposited $93,350 into Quackenbush’s political bank account.

Following the devastating Northridge Earthquake, Allstate Insurance Co. (the “You’re in good hands” folks?!?) was the subject of a highly critical review by that same Dept. of Insurance for the company’s poor handling of claims to cover their client’s loses. Quackenbush decided not to fine Allstate the tens of millions of dollars that the company’s actions should have merited but, instead, ordered Allstate to contribute $2 million to an educational fund that Quackenbush created just for this instance. Six months later, Allstate Insurance simply donated $50,000 directly to the commissioner’s political bank account and all was forgiven.

Sadly, in California there is no limit to campaign contributions nor is there any law prohibiting the transfer of those contributions to any other campaign and the donor has no say in that transfer, either. In fact, it is legal in California for Quackenbush to solicit campaign contributions from the very same companies that he is supposed to be regulating, and you can be very certain that anytime he asks, the insurance companies can’t write the check fast enough.

As Allstate Insurance Co. spokesman Peter Debreceny exclaimed, “Allstate has a long history of responding to requests (my emphasis) for funding from politicians where we feel that the candidates are inclined to support pro-competitive (again, my emphasis) positions and seem to have the interests of our policy holders in mind.” In other words, considering what body parts of our policy holders we have firmly in our “good hands”, we need somebody like Quackenbush around to stay out of our way while we screw our customers day after day after day.

Now, think about these figures for just a moment, will you? In just the last six months of 1999, Quackenbush has collected $245,000 in political contributions (even though he is barred from running for a third term as Insurance Commissioner by term limits). Of that $245,000, $216,000 came directly from the very same insurance companies, lawyers who represent insurance companies, insurance company employees and insurance company officers.

Tony Miller, a former secretary of state, is asking for an investigation of Quackenbush and the highly questionable campaign contributions over the last few years. While what Quackenbush has done isn’t precisely covered under California’s nearly non-existent campaign financing laws, Miller does believe that they are in violation of a state law that prohibits any official of an agency from accepting any contributions over $250 from any entity or company that has business before that person’s agency or, more precisely, “while a proceeding involving a license, permit or other entitlement . . is pending before the agency.”

This isn’t Quackenbush’s first violation of campaign financing laws, either, In 1997, the Fair Political Practices Committee fined him $50,000 for failing to disclose thousands of dollars in contributions during his failed bid for this same office in 1994.

Harvey Rosenfield, author of Prop. 103, an insurance reform measure from 1988 that made the position of insurance commissioner an elective office, has stated that, “What’s happening is the insurance industry has been funding the Quackenbush’s family political aspirations, and what they’ve done is paid off the Quackenbush family debts. It may be legal, but it’s certainly the kind of legal institutional corruption that gives politics a bad name.”

In fact, Rosenfield has researched the insurance code and can find nothing authorizing the commissioner to set up a foundation in lieu of mandated fines. In fact, the code specifically states that all fines be deposited directly into the state general fund. “Instead of punishing the companies,” Rosenfield declared, “they got off with a kiss from the commissioner.”

At least a pro forma investigation into the commissioner’s practices will be initiated. Assembly Insurance Committee Chairman Jack Scott, (D-Altadena) has said that, after reviewing the commissioner’s rather shady history, he will convene hearings to look into those actions. “I’m very alarmed that there appears to be more than a coincidental relationship between the commissioner’s enforcement actions and the stream of money that flowed into his campaign coffers.” (1)

Gentle readers, this is exactly why America must enact strict campaign financing laws whose punishments mandate huge personal fines (not payable or subsidized by any other person or PAC or company) and must include prison time for the most overtly criminal cases. This case needs no long term investigation. The outright bribery is apparent even to the most disinterested person and must be punished to whatever extent California’s puny little laws allow. The incarceration of just one of these simpletons will send an immediate notice to all that the American people will no longer stand for government by and for the highest bidder.

Oh, yeah! I'll give you just one guess as to which political party this greedy little gremlin belongs to.

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