Will Quackenbushs troubles hurt Holocaust foundation

The controversy swirling around Chuck Quackenbush in Sacramento is not affecting California's push to corral non-complying Holocaust-era insurance companies, Jewish advocates assert.

"The earthquake thing, we don't know anything about it, except that it's there, and it's his problem," William J. Lowenberg, a longtime S.F. Jewish community leader and the secretary of a Quackenbush-formed foundation for Holocaust survivors, said last week.

"But it is having no effect on the Holocaust insurance [situation]. He has got full control and deep dedication to this issue…and we're trying to keep the two things as separate as possible."

The state insurance commissioner, who is a Republican, is on the hot seat for his actions related to the 1994 Northridge earthquake.

Quackenbush is being called into question on two counts.

First, he is accused of allowing California's largest insurers to escape billions of dollars in fines by making "voluntary donations" to two nonprofit foundations.

Second, of the $12.8 million that was reportedly donated to the foundations, none of it has gone to earthquake victims.

Among the accusations: More than $4 million paid for TV commercials featuring Quackenbush, and one of the foundations granted $260,000 to a Sacramento football-training academy attended by Quackenbush's two sons.

In a parallel that could make some Jewish advocacy groups a bit skittish, the California Holocaust Registry Act has also involved Quackenbush forming a foundation — into which three Dutch insurance companies have agreed to place $4.2 million.

The fund, which Lowenberg predicts could grow to $10 million, will dole out money to any of California's 22,000 Holocaust survivors who are found to be living below the poverty line. One official estimated that number to be 5,000 to 6,000 people.

Expected to be publicly announ-ced in the next week or two, the foundation will be called the California Humanitarian Insurance Settlement Foundation for Holocaust Survivors.

Lowenberg and others quickly point out that Quackenbush's earthquake-related funds are completely different from the Holocaust foundation.

"The money will be used only for survivors that need the help," said Lowenberg, one of about a dozen people who sit on the foundation's yet-to-be-formally announced executive committee.

A similar point was made by Richard Mahan, a spokesman for a 35-member alliance that is supporting California's push to get insurance companies to honor unpaid Holocaust-era claims. The Holocaust Insurance Settlement Alliance is made up of both groups and individuals.

"The issues that have been raised about the earthquake foundation don't apply to the distribution of humanitarian funds to survivors," Mahan said last week from his office in Marina del Rey.

"In the earthquake situation, the moneys were contributed in lieu of fines. The humanitarian funds aren't in lieu of any fines…The other distinction is that whatever vehicle is set up to distribute this money, the distribution decisions will be made by survivors."

Both the foundation and California's legal pursuit of Holocaust-era insurance companies with unpaid claims will continue if Quackenbush steps down or is forced out, Lowenberg said.

"We will have lost an ally, but he's got things in motion and other people will continue this," he said.

Rabbi Abraham Cooper, an associate dean at the Simon Wiesenthal Center in Los Angeles, has nothing but praise for Quackenbush in relation to Holocaust-era insurance claims.

"The only person in this entire process, and that includes national and international, that has stood up for the individuals and their heirs is Chuck Quackenbush," Cooper said.

Meanwhile, a few developments have cropped up related to Holocaust-era insurance claims.

On April 20, a U.S. District Court judge in Sacramento ruled that Gerling Global Reinsurance Corp. of America must provide full disclosure in its lawsuit against California.

The Cologne, Germany-based company is challenging the constitutionality of a new California law that forces Holocaust-era insurers to cooperate with state officials or risk losing their license to do business in California.

Other similar suits have been filed, all naming Quackenbush as a defendant.

The American Insurance Association has filed one on behalf of some of the largest insurance companies in the world, including Munich Reinsurance and Allianz AG, both of Germany, and Zurich Financial Services of Switzerland.

The companies have varying beefs, such as California wanting them to produce policyholder information to which they claim they do not have access. Also, many claim that the state shouldn't have jurisdiction over them.

Cooper asserts that the insurance companies are "bringing in high-priced lawyers and bulldozers to try to erase proper redress to victims of the Shoah."

At the same time, some of the insurance companies might consolidate their lawsuits against the state. There are now four, Mahan said, with Winterthur of Switzerland and Generali of Italy recently having filed.

Tom Walker, a spokesman for the Munich Re subsidiary American Reinsurance, said Quackenbush's current troubles have nothing to do with the batch of lawsuits.

"I don't think it's relevant at all to our argument," he said. "Our lawsuit is challenging the constitutionality of the California statute."

Andy Altman-Ohr

Andy Altman-Ohr was J.’s managing editor and Hardly Strictly Bagels columnist until he retired in 2016 to travel and live abroad. He and his wife have a home base in Mexico, where he continues his dalliance with Jewish journalism.