Call It Extortion

Assemblyman Tom McClintock (R-Northridge) called it an abuse of power. In some places, it’s known as extortion. And by any definition, what Insurance Commissioner Chuck Quackenbush has done amounts to misconduct in office, which is the state Constitution’s legal ground for impeachment and removal from office.

Consider the latest example, in the form of a phony Quackenbush news story:

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Commissioner Quackenbush today announced (INSERT INSURANCE COMPANY NAME HERE) has been ordered to a hearing to examine, in a public forum, its handling of Northridge earthquake victims.

If only Quackenbush had done that he might have set out on the right track toward settling claims of Northridge victims who felt cheated by their insurance carriers. In other words, he should have done the job he was elected to do. But Quackenbush’s office never intended to fulfill that threat. The supposed press report was a fake designed to force insurers to contribute “voluntarily” to a private foundation that in fact served largely as a political slush fund for Quackenbush.

One of the commissioner’s aides told a legislative committee the press ploy never happened. But now the aide has done some checking and discovered--to his horror, we hope--that the scam was indeed attempted. The message was not subtle: This was the sort of bad press the companies could expect if they didn’t contribute to the two private foundations that Quackenbush had established. Beyond that, deputies of the commissioner also threatened to assess hundreds of millions in fines against the companies.

We’ve said repeatedly Quackenbush should resign, but he won’t budge, insisting, incredibly, that he did nothing wrong. If that continues to be his position, the Legislature should prepare to bring impeachment proceedings against him.

Give credit to the executives of one insurance company for their reaction when this press charade was pulled on them; they were so repelled they trooped out of the meeting room. “Our folks were just completely baffled by the presentation,” said a spokesman for that company.

In the end, the firms escaped the fines by agreeing to donate $12.8 million to two foundations that were in fact paper shells run out of the Department of Insurance. About half of that money was supposed to go to earthquake victims, but none had been paid out as of last week, when the foundation’s assets were frozen by a court.

It gets worse. Now we learn that Quackenbush’s office has delayed collecting $4.1 million from Dutch companies in Holocaust restitution payments while the firms go to court to challenge California’s Holocaust Victim Relief Act. This was the result of a secret and possibly illegal deal, says Assemblyman Wally Knox (D-Los Angeles), the author of the act. Knox has twice asked the department to report on the situation and gotten nothing but silence.

The tenure of Chuck Quackenbush has been one outrage after another to the people of California, who are supposed to be served and protected by the commissioner. Not even his fellow Republicans have rallied to his insistence that he is purely a victim of political attacks. Quackenbush should realize that if he refuses to quit he is likely to face the ignominy of impeachment.