Quackenbush Aide Quits Amid Inquiry

SACRAMENTO —  The chief aide to Insurance Commissioner Chuck Quackenbush abruptly resigned Friday, less than two weeks after lawmakers began scrutinizing the private law practice he has been operating on the side.

William W. Palmer, who held four top jobs in the commissioner’s office simultaneously, submitted his resignation to Quackenbush verbally and asked that it be effective immediately, said a spokeswoman for Quackenbush.

“Today [Friday] was his last day of work,” said Dana Spurrier, deputy insurance commissioner for public affairs.

Palmer, who left his office before his resignation was announced publicly, could not be reached for comment.

Palmer and Quackenbush had been under intense criticism in recent weeks from legislators who complained that it was improper to vest so many important jobs in one man and allow him to operate a private law practice as well.

Palmer was Quackenbush’s chief of staff, his legal advisor, the director of an effort to recover insurance benefits for Holocaust victims and the chief executive of the conservation and liquidation office, an arm of the department that oversees insolvent insurance companies.

In addition to his government jobs, Palmer has a private practice in which he represents stockholders who are suing Berkshire Hathaway, a conglomerate that owns insurance companies. Lawmakers contend that it is unethical for Palmer to be suing a company that owns insurance companies regulated by his department.

Palmer’s $200,000 annual salary, one of the highest in state government, was paid out of the assets of failed insurance companies, a factor that also prompted lawmakers to complain he should not be dividing his time between the conservation and liquidation office and other insurance department functions.

Despite the resignation, Senate Insurance Committee Chairwoman Jackie Speier (D-Daly City) said her committee will continue investigating Palmer’s activities at the Department of Insurance. “Mr. Palmer’s resignation does not put an end to my concerns over his private legal activities,” she said.

In a letter to Speier, Quackenbush defended his decision to give Palmer so many jobs, describing him as a man of exceptional energy who devoted 80 to 90 hours a week to the department.

On Friday, Quackenbush would only say that Palmer had resigned to dedicate “himself fully to his private professional interests.”

“We will be hard-pressed to find a replacement [at the conservation and liquidation office] as talented and dedicated as Bill,” Quackenbush said in a statement.

Quackenbush said Palmer will be replaced in the chief of staff job by Michael Kelley, who will hold the title of chief deputy insurance commissioner. Kelley, who has worked in the department since 1995, was formerly Quackenbush’s deputy for administrative operations.

At the conservation and liquidation office, Palmer will be replaced temporarily by Deputy Insurance Commissioner Mark Lowder until a permanent replacement is named.