Lungren Accused of Violating Ethics for Accepting Donation

SACRAMENTO — In an unusual move, state Insurance Commissioner Chuck Quackenbush has accused fellow Republican state Atty. Gen. Dan Lungren of violating legal ethics by accepting a $10,000 campaign contribution from a company that both were fighting in court.

Lungren aides have defended his gubernatorial campaign’s acceptance of the contribution from the Golden Eagle Insurance Co. and denied that the money affected the office’s handling of the case.

Quackenbush’s office sued Golden Eagle in a high-profile action that resulted in the state’s seizure of the $1.3-billion San Diego-based company in January, and its eventual sale.

Lungren was representing Quackenbush in the case when, in late 1996, Lungren’s campaign solicited and received $10,000 in campaign contributions from Golden Eagle and its owner, John C. Mabee.

In March, Lungren and Quackenbush had a falling out over the case. Lungren withdrew as Quackenbush’s attorney. Quackenbush then hired six private firms to handle the remainder of the case.

Recently, San Francisco Superior Court Judge William Cahill denied payment to four of the firms because Lungren’s office did not specifically approve them.

Quackenbush then asked the judge to reconsider his decision, saying that Lungren had a conflict of interest because of the campaign contributions and should be disqualified from any involvement in the Golden Eagle case.

In a motion, Quackenbush said Lungren’s acceptance of the $10,000 without Quackenbush’s consent “constitutes a clear and undeniable breach of the professional rules by which he is bound.”