No Longer Toast of the Town; Now He’s Just Plain Toast

Insurance Commissioner Chuck Quackenbush will go down in history, but not for the reasons he had hoped. According to the wife of the soon-to-be-former-commissioner--herself an unsuccessful legislative candidate for whom he raised hundreds of thousands of dollars from the industry he regulates--he was the toast of California. Now he is just toast.

His resignation in the wake of revelations that he used his office to pressure insurance companies to contribute to a phony foundation/political slush fund in lieu of pursuing their failure to serve policyholders in the wake of the Northridge earthquake comes just a few steps ahead of his likely impeachment by the state Assembly, which has rightly refused any deal with him.

Others, such as state Atty. Gen. Bill Lockyer and federal authorities, should also eschew any deal with Quackenbush. If the testimony of his own associates is correct, he abused his public trust in one of the most egregious ways imaginable, costing policyholders perhaps hundreds of millions, if not billions, in recompense.

Quackenbush’s career is clearly over. Indeed, it has been obvious for years that he would top out as state insurance commissioner, ever since his election and reelection campaigns were dominated by money from the very industry he is supposed to be regulating. In a state with a fundamentally absent or apolitical civic culture, that sort of thing can work in a race for a lower-profile office like insurance commissioner, for which the Democrats didn’t bother to field a serious candidate last time around. But that record of industry obeisance would never have flown in a high-profile race for governor or U.S. senator. Democrats have never been worried about Quackenbush as a candidate for those offices, which perhaps accounts for the party’s disinterest in the office in the last election.

Indeed, Quackenbush was something of a fluke from the very beginning--a lightweight pretty boy swept into office by the collapse of Kathleen Brown’s gubernatorial campaign during the 1994 general election. The Democrats put up a good candidate that year, then a state senator and now the state’s party chairman, Art Torres. Yet because of the gross mismanagement of Brown’s campaign chief, Clint Reilly, who’s been out of state politics ever since, the Brown campaign, which spent heavily and unnecessarily in an easy primary victory, ran out of money down the home stretch run of the campaign, literally “going dark” on TV, depressing Democratic turnout and driving up the margin for Republican Gov. Pete Wilson.

Quackenbush won the race and soon proved his fealty to the insurance industry. Massive policyholder dissatisfaction with their insurers in the wake of the devastating 1994 quake was swept under the rug by his office. Now we know why.

Even Republicans scarcely talked of him as a candidate for higher office. This was true even after the party’s devastating showing during the Gray Davis landslide of 1998 left Quackenbush one of only two Republicans in statewide office, Secretary of State Bill Jones being the other.

When the Quackenbush case broke several months ago, new state Assembly Speaker Bob Hertzberg brought aboard a former federal prosecutor and some additional personnel to assist the Assembly’s Insurance Committee in the Quackenbush probe. They would have been especially useful in an impeachment proceeding, as noted by a number of Republicans who concluded that it was not in their interest to keep Quackenbush around in an election year.

What lessons can we take from this sordid episode?

There is, of course, the unintended consequence of reform, at least the kind of reform that is not accompanied by real oversight. The elective office of insurance commissioner was created by a statewide ballot proposition to eliminate industry influence and possible corruption. Oops.

If government and media overseers aren’t paying close attention to an office at the nexus of big money and politics, corruption is probably inevitable. While we should pursue Quackenbush to the full extent of the law--just as if he was accused of, say, robbing a liquor store, a far less consequential offense--we should not assume that he was simply a bad apple. It’s probably more accurate to say that he was a very ambitious guy who saw what he could get away with, and proceeded to do it. There’s no substitute for vigilance in a democracy, especially one dominated by money.