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  • usasitis usasitis Nov 6, 2004 5:49 PM Flag

    insurance scandal focus of Senate

    US insurance scandal set to be focus of Senate inquiry
    By Katherine Griffiths in New York
    Published : 06 November 2004


    http://news.independent.co.uk/business/news/story.jsp?story=580032

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    • Sacramento Bee
      Jul 07, 2000
      by Patrick Hoge

      http://www.consumerwatchdog.org/insurance/nw/nw000653.php3


      Ex-aide: Quackenbush knew all -- Grays will testify to investigators, lawyer says
      Former Deputy Insurance Commissioner George Grays will tell federal and state investigators that Insurance Commissioner Chuck Quackenbush personally quarterbacked efforts to collect money for political advertising from insurance company settlements, his lawyers said Thursday.

      Grays -- who himself has been heavily implicated in the scandal that led to Quackenbush's resignation -- also will say that numerous top aides at the Department of Insurance were aware of Quackenbush's goal of benefiting politically, despite their claims to the contrary, William Portanova, one of two criminal defense attorneys representing Grays, told The Bee.

    • Workers Comp Executive

      Vol. 10 No. 8 April 19, 2000

      QUACKENBUSH SWEATING IT AS HE FACES ATTACKS FROM ALL SIDES

      snip

      Jackie Speier, (D - San Mateo) chair of the Senate Insurance Committee, and who is rumored to be considering a run for insurance commissioner in 2002, is spearheading Senate efforts to hold hearings on Quackenbush's involvement in a restitution fund he established to compensate victims of the Northridge earthquake.

      Quackenbush established the foundation after rejecting advise from his own staff to collect more than $3 billion in fines and another $233 million restitution. Instead six companies paid a paltry $11.6 million in tax-deductible donations to the fund. So far none of that money has been used for restitution payments.

      The foundation also spent $3 million on 1999 television ads featuring Quackenbush urging earthquake preparedness. His personal political team was paid $440,000 for preparing the ads.

      And the heat has gotten so bad that one of his deputy commissioners, George Grays, resigned last week. Grays served as Quackenbush's 1998 campaign director, and he worked on the earthquake ads.

      "The trail of clues leads directly to Quackenbush," says Doug Heller, of the Foundation for Taxpayer and Consumer Rights, an organization run by Harvey Rosenfield, the author of Prop. 103 and longtime insurance industry critic. "George Grays is the commissioner's fall guy. His departure provides no protection for Quackenbush, who must be held responsible for the department's illegal and unethical acts."

      Jack Scott, chair of the Assembly Insurance Committee, once again said he'd hold hearings on the Department of Insurance's investigative practices in light of the massive amount of funds Quackenbush has raised from the industry he regulates.

    • Miller said he will ask for an investigation by the Fair Political Practices Commission into possible violations of a state law prohibiting an agency official from accepting a contribution of $250 or more from any party involved in getting a license, permit or other entitlement from that agency.

      Sal Bianco, Fremont Co.'s vice president of governmental affairs, said the company's contribution was not related to Quackenbush's recommendation to increase workers' compensation rates. He said the donation reflected the company's opinion that Quackenbush ``has done a good job trying to deal with all sorts of insurance problems in the state.''

      Likewise, a spokesman for the Illinois-based Allstate said there was no connection between his company's contribution and Insurance Department decisions.

    • "The Glendale-based Fremont Compensation Insurance Co. gave the most to Quackenbush, putting $93,350 in his political bank account nine days after he proposed an 18.4 percent increase in workers' compensation rates."


      -----------------------

      Quackenbush used insurance company contributions to pay off wife's debts

      Monday, March 27, 2000

      http://www.sfgate.com/cgi-bin/article.cgi?file=/news/archive/2000/03/27/state010
      0EST0218.DTL




      (03-27) 01:00 EST SACRAMENTO (AP) -- Insurance Commissioner Chuck Quackenbush collected $245,000 in contributions from insurance companies and used part of it to repay his wife's loans in her failed state Senate campaign, the Los Angeles Times reported Sunday.

      Quackenbush, an elected official with regulatory power over the state's insurance companies, accepted the contributions money over the final six months of last year, finance records show.

      Insurance interests, such as companies, their lawyers, and employees, gave a total of $216,000. The insurance commissioner transferred $100,000 of it to his wife Chris to help pay off personal loans she took out for her 1998 state Senate bid.

      A spokesman for Quackenbush said the commissioner keeps his regulatory obligations and his political business distinctly separate, and that the two do not influence one another.

      ``There is absolutely no nexus at all between the business of the California Department of Insurance and the commissioner's political operation, including campaign fund-raising,'' Deputy Commissioner Dan Edwards told the Times.

      The Glendale-based Fremont Compensation Insurance Co. gave the most to Quackenbush, putting $93,350 in his political bank account nine days after he proposed an 18.4 percent increase in workers' compensation rates.

      Allstate Insurance Co. donated $50,000 six months after Quackenbush decided not to fine the company for unfair claims practices related to the 1994 Northridge earthquake.

      Metropolitan Life gave $20,000 and Progressive Insurance added $10,000.

      Quackenbush is not running for re-election because term limits, but Edwards said it was appropriate for him to accept political contributions. Quackenbush could conceivably seek another office in the future, he said.

      The contributions were troubling to Assembly Insurance Committee Chairman Jack Scott, D-Altadena, who said he plans to call hearings to investigate the matter.

      ``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,'' Scott told the Times last week.

      Complicating the question of the propriety of the donations is the fact that Quackenbush gave $100,000 of the money to his wife.

      While it may be unusual for an office holder to transfer political contributions to his wife, there is no law in California against transferring contributions to another campaign fund.

      Former secretary of state Tony Miller, who enforced campaign finance laws while in office, said the Quackenbushes' behavior demonstrates the weakness of California's ethics laws and lack of enforcement of current ones.

      ``Mr. Quackenbush is a poster child for why we need campaign finance reform,'' he said.

      continued

    • Workers Comp Executive

      Vol. 10 No. 8 April 19, 2000

      QUACKENBUSH SWEATING IT AS HE FACES ATTACKS FROM ALL SIDES

      SACRAMENTO - In a four-pronged attack, two houses of the Legislature, the state attorney general's office and a former secretary of state are all looking to broil the lame duck known as California Insurance Commissioner Chuck "Chick" Quackenbush.

      The stuffing includes a delectable complaint filed by former secretary of state Tony Miller, asking the California Fair Political Practices Commission to investigate

      Quackenbush for campaign law violations. Also, both the Senate and the Assembly plan to hold separate hearings on his fund-raising tactics and his establishment of various restitution funds.

      The lame duck is also being basted with generous helpings of an attorney general investigation into his use of political funds and the timing of his fund-raising activity.

      Adding brickquettes to the BBQ, he's also being accused of strong-arming title insurers into making contributions to another campaign or commission controlled foundation.

      The roasting activity could land the Quackenbush in hot water. And the Quackenbush pot luck has even led legislators to consider floating bills that would once again turn the insurance commissioner post into an appointed and not an elected position.

      "We may try to introduce legislation that would make it an appointed position again," says Beverly Hunter, consultant to the Assembly Insurance Committee. "That didn't play before, but it may play now."

      The same is being considered by the Senate.

      A hearing has been slated for April 26 by the Assembly Insurance Committee. The Senate plans to hold hearings next month.

      The complaint filed by Miller with the FPPC, asks the commission to investigate 93 counts of alleged campaign law violations. Not only was Quackenbush named in the complaint, but so were 16 insurance companies.

      Workers' comp carriers named include Fremont Compensation Insurance Co., California Indemnity Insurance Co., CHUBB Federal Insurance Co., Liberty Mutual Insurance Co., Safeco Insurance and Fireman's Fund Insurance.

      Miller in his complaint cites laws that prohibit companies from making campaign contributions to a state regulator 12 months prior and three months after the regulator acts on requests from the companies.

      While many of the violations concern auto filings, all of the workers' comp carriers made donations before their pure premium rate filings.

      Miller, in an interview with the Executive, says the FPPC has 120 days to respond to his complaint, and if it takes no action he'll file suit in civil courts as a private attorney general for the state as an action under the political reform act.

      "There's been numerous violations by the insurance commissioner and insurance companies and they could all be subject to civil liability and even criminal penalties," Miller says.

      Michelle Pereira, spokeswoman for the Quackenbush campaign committee, responds: "This is the same baseless charge that was unsuccessfully leveled against him in the past."

    • Who do you go to complain about an Insurer committing fraud?

    • In 1991, Mr. Bryant was named Special Agent in Charge of the Washington, D.C. Metropolitan Field Office. In 1993, he was designated Assistant Director of the National Security Division and in 1997, Director Freeh appointed him to be Deputy Director.

      During his distinguished career, Mr. Bryant directed many high-profile investigations including the Oklahoma City bombing investigation in 1995 and the bombing of the Al-Khobar Towers in Saudi Arabia in 1996. He also headed the successful espionage investigations of Aldrich Ames, a CIA employee arrested in 1994 and now serving a life term in prison, Earl Edwin Pitts, an FBI agent and Harold Nicholson, a CIA employee, who pleaded guilty to espionage charges in 1997 in separate cases and are serving long prison terms.

      Mr. Bryant also supervised the FBI operation that resulted in the peaceful surrender and arrest of the Freemen in Montana after a long standoff in 1996.
      Mr. Bryant is married and has three children.

      After retiring from the FBI, Mr. Bryant will become the Chief Executive Officer with the National Insurance Crime Bureau in Chicago, Illinois.

      .

    • U. S. 9th Circuit Court of Appeals USA Vs Jackson No.94-10095 D.C. No. CR.-93-00118-EJG Opinion

      http://laws.findlaw.com/9th/9410095.html

      A. Racketeering Act 4 - Senate Bill 1719

      In Racketeering Act 4, the indictment charged Jackson with offering a bribe to Robbins in the form of campaign contributions in exchange for Robbins' assistance in defeating Senate Bill 1719 in early 1988. The governor vetoed the bill after both houses had passed it. Robbins then sent Jackson a letter and newspaper articles chronicling Robbins' action against SB 1719. Shortly thereafter, Jackson's client, who would have been adversely affected by the passage of SB 1719, donated $2,000 to Robbins.

      B. Racketeering Act 5 - Workers' Compensation

      During the course of tape-recorded conversations, Jackson offered Robbins a $250,000 bribe. (Unknown to Jackson, Robbins had already been caught and had agreed to wear a wire in consideration for a reduced sentence.) Jackson promised this substantial reward if Robbins could bring under the jurisdiction of Robbins' friendly insurance committee an upcoming workers' compensation measure that would abolish the minimum rate law. Over a period of months, Jackson and Robbins discussed the outlines of the deal. Jackson promised to raise the money from the small insurance companies he represented, and who would be wiped out if the workers' compensation minimum rate law were abolished. Jackson solicited donations from several insurance executives, telling them that the money would be used to establish a coalition of similar companies backed by a political action committee."


      "As part of the scheme to defraud and to obtain money by means of false pretenses, defendant CLAYTON R. JACKSON induced unsuspecting lobbying clients to make campaign contributions to Paul Carpenter's campaign committee, when the defendant CLAYTON R. JACKSON then and there well knew that a substantial portion of the said contributions were not actually for the benefit of Paul Carpenter, but were in actuality to be routed through Paul Carpenter for the direct and indirect benefit of Alan E. Robbins."

      ------------------------------------------------------------------------------------------

      Clayton R. (Clay) Jackson was the lead California Lobbyist for the American Insurance Association (AIA) and was considered the chief legislative strategist to most of the insurance industry.

      See http://www.wcexec.com/default.asp

      Search archives: set for 200 and search for Clay Jackson:

      "Company Execs Subpoenaed in Clay Jackson Trial" Vol.3 No.19 October 1993

      One of the appellate lawyers who represented Mr. Jackson in his appeals was former federal [and Supreme Court nominee] Judge Robert Bork footnote 1.

      • 2 Replies to stakeholder_9999
      • Workers Comp Executive

        Vol. 3 No. 19 October 4, 1993

        COMPANY EXECS SUBPOENAED IN CLAY JACKSON TRIAL

        SAN FRANCISCO -- Clayton R. Jackson, Esq., as you are no doubt aware, was indicted some months ago by the feds in the Sacramento political corruption scandals. Mr. Jackson was the lead California lobbyist for the American Insurance Association and was considered the chief legislative strategist to most of the insurance industry.

        Much of the charges stem from statements by that felonious fink, Alan Robbins, who is trading time off in the hoosegow for his testimony against Jackson. The feds apparently consider singing - finking - ratting - whatever - be it true or not good enough behavior to bargain for.

        Certain legislatively active insurance company presidents have been subpoenaed and are scheduled as witnesses. Among those called are George Joseph of Mercury General Group, James Little of Fremont Pacific Insurance Group, Joseph G. Havlick of California Indemnity, and Stanley Braun of Pacific Rim Assurance Company.

        Jackson is known as a brilliant strategist and a subtle fighter. If anyone can beat this kind of rap, he is the one who can. Either way this trial is expected to get to the very core of how Sacramento works, and may expose more than anyone has bargained for. The trial is scheduled to begin October 12th in Sacramento.

        � Copyright 1998 commanon Corporation. All rights reserved.

      • CLAYTON RANDALL JACKSON [#43442], 54, of Sausalito was disbarred Nov. 19, 1997.

        Jackson has been on interim suspension since 1994, following his conviction in federal court the previous year on 10 counts of racketeering, mail fraud and money laundering. He declined to participate in the disbarment proceedings.

        Jackson was a Sacramento lobbyist for various insurance companies, and his conviction resulted from bribing then-Sen. Alan Robbins, who chaired the Senate insurance committee.
        Jackson offered Robbins a $250,000 bribe related to a pending workers� compensation bill, and then solicited funds from insurance company executives, telling them the money would be used to form a political action committee.

        Jackson also solicited money from several unsuspecting clients to make what he described as campaign contributions to Paul Carpenter, a former state senator who then served on the board of equalization. In fact, the funds were to be funneled to Robbins.

        Jackson�s mail fraud convictions were based on checks mailed to Carpenter by Jackson�s clients at his request.

        In a letter submitted to the State Bar, Jackson acknowledged the bar�s jurisdiction to impose discipline resulting from his convictions, but refused to resign from practice, believing he will eventually be vindicated.

        (The U.S. Court of Appeals upheld his conviction and the U.S. Supreme Court denied certiorari.)

        Although Jackson has not been previously disciplined, which is a mitigating factor, the State Bar Court found that his conduct involved moral turpitude and included multiple acts of wrongdoing committed over a long period of time.

        The bar court concluded that his actions �clearly damaged public confidence in its governmental officials � (Jackson) is found to have significantly harmed the public by corrupting an important aspect of the legislative process.�

    • More pressure on Marsh? This is going to go on for years.

 
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