Governor Begins to Consider Replacement

Gov. Gray Davis huddled with advisors Wednesday, deciding how to proceed with the appointment of a successor to discredited state Insurance Commissioner Chuck Quackenbush, who had been mentioned as a potential challenger to the governor.

Davis has given no hints about whom he might appoint, and repeatedly has turned aside questions about Quackenbush’s troubles.

On Wednesday, he issued a brief statement: “I will name someone of unquestioned integrity, with the ability and experience to restore credibility to this important office.”

State law says the governor’s nominee must be confirmed by a majority of both the Senate and the Assembly. With both houses controlled by Democrats, Davis’ selection probably will win confirmation.

Garry South, Davis’ top political strategist, who attended the Wednesday meeting, said in a recent interview that he would suggest a practiced politician, one with a good reputation who also could mount an effective campaign in 2002, when the current term expires.

“I don’t think caretakers ever work out very well, particularly coming into a department that will be demoralized,” South said.

There was at least some speculation that Davis would look to an outsider--and there was some sentiment in the Legislature for a strong administrator who would clean up the Department of Insurance and not run for election.

“Maybe you want somebody who is not spending time raising money [to run for the office] and will do right for the people,” said Senate President Pro Tem John Burton (D-San Francisco).

Inside the Capitol, speculation swirled about potential nominees. Much of it centered on two veteran lawmakers--Sen. Patrick Johnston (D-Stockton) and Sen. Jackie Speier (D-Daly City). The name of Assembly Budget Committee Chairwoman Denise Ducheny (D-San Diego) also was floated, as were the names of many others not now in elective office.

“It’s important now more than ever that the insurance regulator take a balanced, dispassionate, nonpolitical leadership role,” Johnston said Wednesday.

Johnston is respected in the Legislature, but has run afoul of Harvey Rosenfield, one of the state’s most vocal consumer activists. Rosenfield’s organization was working Wednesday to undermine Johnston. He probably would have support among Republicans, who view Speier as too ambitious and partisan.

“Pat Johnston has the evenhanded temperament to be a tough regulator who understands market forces and market needs,” said Assembly Republican Leader Scott Baugh of Huntington Beach.

Stanley Zax, chairman of Zenith National Insurance and one of Davis’ benefactors, called Johnston an “honorable, thoughtful guy,” who would be “an excellent selection.” Speier also said Johnston “would be a great choice.”

Harry Snyder, co-director of the West Coast office of Consumers Union, suggested that Davis might look inside his administration, tapping Aileen Adams, head of Davis’ consumer affairs agency or perhaps Chief of Staff Lynn Schenk.

Schenk is a former congresswoman who ran for state attorney general in 1998. She and Davis have been friends since their days in Gov. Jerry Brown’s administration.

“He has to appoint someone who is not just another politician, who has no ties to the insurance industry and has a reputation for rectitude,” Snyder said.

With Quackenbush’s resignation effective July 10, there’s time for Davis to act. If he fails to act quickly, Quackenbush’s chief deputy, Michael Kelley, will become acting commissioner on that day.

“I find that a deeply troubling prospect,” said Assemblyman Fred Keeley (D-Boulder Creek), one of the leaders of the committee that investigated Quackenbush. “I do not believe Mr. Kelley was forthright with the committee. I hope the governor will act quickly to appoint a person of high integrity to the position.”

Kelley is a career state administrator who had worked at the Department of Finance and in a consumer department. He had a good reputation in past posts, but the Quackenbush scandal’s taint has spread to much of the Department of Insurance.

Some lawmakers recall the bitter succession fight after state Treasurer Jesse Unruh died in 1987. Gov. George Deukmejian appointed Rep. Dan Lungren, only to have the Legislature reject him. Deukmejian then appointed Tom Hayes, who was seen as a strong administrator with limited political aspirations. Hayes was confirmed, and ended up running for the office and losing.

“We want someone of the highest integrity, who agrees not to run for election,” said Assembly Speaker Bob Hertzberg (D-Sherman Oaks).

The state Constitution bars sitting legislators from being named to appointed positions, such as Cabinet posts. However, the Constitution appears to permit governors to name legislators to elective offices.

There had been debate among state lawyers about whether the governor has the authority to appoint an insurance commissioner when there is a vacancy. However, the Legislature passed a bill in 1993 spelling out the process.

The measure was introduced by Senate Republican Leader Jim Brulte of Rancho Cucamonga, who told Quackenbush’s lead attorney Tuesday that the commissioner should consider resigning.

Among those who voted for the 1993 law: then-Assemblyman Chuck Quackenbush.