Quackenbush Charity Got Insurer Funds

California Insurance Commissioner Chuck Quackenbush is listed in state files as a member of the board of governors of a charity that received grant money from a controversial earthquake research foundation he created.

The charity, Athletes & Entertainers for Kids, a Long Beach-based social service organization, received $70,000 from the fund Quackenbush set up with penalties paid by major insurance companies after the Northridge earthquake, records obtained by The Times show.

Although Quackenbush has said that the $11.6-million California Research and Assistance Fund operated at arm’s length, foundation grants were arranged by a senior aide, George Grays, working in the commissioner’s state offices.

Grays, who resigned earlier this month after reports surfaced of irregularities in the foundation, is listed as a “corporate council chairperson” for the Athletes & Entertainers on the organization’s letterhead, filed with the state attorney general’s registry of charitable trusts. Quackenbush is identified as one of 13 governing board members for the group on the same piece of letterhead, dated June 1, 1999.

Grays, who managed the insurance commissioner’s 1998 reelection campaign, is listed as an at-large member of the board of directors of “9-1-1 for Kids” according to papers filed with the registry. That organization received $45,000 from the foundation.

State law requires that charitable foundations operate independent of their incorporators.

A key figure linking the two groups is a woman named Elise Kim.

Kim is the executive director of Athletes & Entertainers and is listed as executive director of 9-1-1 for Kids, according to the files.

Kim also is a co-owner of a Los Angeles-based company called Strategi, which was given $1 million from the California Research and Assistance Fund to develop earthquake readiness programs for California, according to Paul Dauer, a Sacramento lawyer representing Strategi.

The “Quake Ready” program included a children’s Web site, TV spots featuring Shaquille O’Neal and Quackenbush, and participation in “Shaqtacular,” a fund-raising event held by Athletes & Entertainers.

A spokesman for Quackenbush said he held no fiduciary role with the Athletes & Entertainers group. Another spokesman referred all questions regarding Quackenbush’s affiliation with Athletes & Entertainers to Kim.

In an interview Tuesday, Kim declined to confirm whether Quackenbush had ever served on the governing board of Athletes & Entertainers, saying only, “We have a board of governors. There is no one there named Chuck Quackenbush.”

When asked whether Quackenbush had ever held any sort of role with Athletes & Entertainers, Kim said: “He has not been on the board of directors or been in a decision-making role.”

Kim acknowledged that Quackenbush had attended some of the group’s events.

Meanwhile, California Highway Patrol officials said Tuesday that Quackenbush has informally asked for a criminal investigation into the apparent leaking to state legislators of confidential documents related to the Northridge earthquake.

A Department of Insurance spokesman said Quackenbush has stopped short of making a full, official request to the CHP, whose officers probe crimes on state property, until he is sure of the facts.

“This would be a serious matter to take forward. We want to make sure we understand all the facts in an accurate and timely fashion,” said Deputy Insurance Commissioner Dan Edwards.

Edwards said Quackenbush is “concerned” that the leaks apparently exposed personal information about insurance policyholders to lawmakers and their staffs, who are investigating Quackenbush’s activities.

Quackenbush’s preliminary request for an investigation is part of a switch in tactics apparently aimed at recruiting public support as he prepares to undergo public questioning in Assembly hearings Thursday. Quackenbush recently began giving interviews and making radio talk show appearances, where he suggested he is the victim of a partisan attack by Democrats.

At issue is the release last month of a confidential department assessment of three major insurance companies’ handling of billions of dollars worth of claims related to the 1994 Northridge quake.

Department regulators found that State Farm, Allstate and 20th Century repeatedly low-balled damage claims, forced some quake victims to sue for full recovery and otherwise mistreated customers.

Department attorneys recommended that the companies be fined hundreds of millions of dollars. Quackenbush rejected the advice, inviting the insurers to make far smaller contributions to the quake research foundation instead.

Disclosure of the documents by The Times earlier this month ignited investigations of Republican Quackenbush by the Democratic-controlled Legislature.

On Tuesday, California Highway Patrol Commissioner D.O. “Spike” Helmick confirmed that he received a request April 17 from Chief Deputy Insurance Commissioner Michael Kelley for an investigation into the leaks.

Helmick said he told Kelley to put the request in writing and “outline in great detail” the suspected wrongdoing.

“I’ve never got the letter,” Helmick said. He noted that CHP officers routinely investigate alleged crimes at state facilities, and that they must know in advance as many facts as possible.

“These are not witch hunts. I want to know [the issues] exactly before I send investigators in,” Helmick said.

He said Kelley did not reveal specifics, but “wanted us to investigate the alleged leakage of documents from state offices. I did not agree to do it. I said he would have to put it in writing.”

Asked Tuesday whether a formal request would be submitted, Edwards said it was still “an option to protect the privacy of consumers.”

He contended that the confidential materials of the insurance companies examined by the department contained personal information on policyholders. In some cases, he said, the leaked files included home addresses, telephone numbers, bank account numbers and Social Security numbers.

“If this information is out there, there are multiple ways that it can be used. At the very least, it is a breach of people’s privacy,” Edwards said.

He declined to cite a case in which personal information may have become public.

Times staff writers Carl Ingram and Virginia Ellis contributed to this report.