Funny About This Money

Voters approved Proposition 103, the 1988 insurance reform initiative, in part to break up a cozy relationship between the insurance industry and the state’s appointed insurance commissioner. Beginning in 1990, the job was made an elected position. But that, it appears, wasn’t enough insulation from the insurance lobby.

As Times staff writer Virginia Ellis disclosed Sunday, Insurance Commissioner Chuck Quackenbush raised $245,000 in the last 6 months of 1999 from firms he oversees, even though he can’t run for the office again by dint of term limits. Further, Quackenbush, a Republican, transferred $100,000 of that money to the campaign committee of his wife, Chris, to repay debts from her losing 1998 state Senate campaign.

The contributions and the transfers were legal, which in itself is dismaying. Proposition 103 author Harvey Rosenfield is correct in calling such behavior “the kind of legal institutional corruption that gives politics a bad name.” The problem is that state law is virtually toothless in regulating campaign fund-raising.

California has no state limit on contributions. Corporate donations are legal. And one candidate can transfer funds to another at will. State voters have repeatedly approved campaign finance reform measures to close these gaping holes, but the measures have been overturned in federal court. The latest, Proposition 208 on the 1998 ballot, is not being enforced pending a trial this summer.

Proposition 208 limited individual contributions, banned corporate giving and prohibited transfers among campaigns. If Proposition 208 ultimately fails, California needs a new effort that will include those key points. Separately, the Legislature should prohibit candidates for insurance commissioner from accepting contributions from firms regulated by that office.

A Quackenbush spokesman claimed there is “absolutely” no connection between the contributions and his official actions. Perhaps, but try to convince an increasingly cynical voting public of that. There is a state law banning contributions while the regulator is conducting any “proceeding” against the regulated giver. State political enforcers should determine whether any such violation may have occurred in Quackenbush’s case. Assembly Insurance Committee Chairman Jack Scott (D-Altadena) is rightly poking into Quackenbush’s enforcement record. The Legislature should also ban all insurance industry donations to the commissioner, either while running for the job or serving in the office.