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Jul 31, 2007 - 03:15 PM

Appointee Won't Protect Consumers

The week of Arnold Schwarzenegger's 60th birthday his advisors seem to be living in a 6-year-old's fairytale. The governor's spokesman told the LA Times today: "Michael Kelley has been a successful administrator and regulator for over 20 years and has been an effective watchdog for California consumers every step of the way."

But Kelley is one of the last people that should be considered a consumer watchdog. The governor's appointee to head the Department of Financial Services, Kelley was a key part of disgraced former insurance commissioner Chuck Quackenbush's scheme to divert millions in compensation away from the victims of the 1994 Northridge earthquake to non-profits that benefited the commissioner personally.

A history of cheating consumers out of millions is hardly the cv I'd choose for the man responsible for enforcing California's banking and finance consumer protection laws.

As the Times reports:

Michael A. Kelley, appointed commissioner of the Department of Financial Services by the governor in December, was a central figure in the scandal that ultimately drove former Insurance Commissioner Chuck Quackenbush from office in 2000. Kelley, who was Quackenbush's top deputy, was found unanimously by a bipartisan legislative panel to have helped the former insurance commissioner divert public funds away from state coffers and into nonprofit foundations that were focused largely on promoting the commissioner's political career.

Perhaps the reason Arnold and his advisors don't see the problem here is the phony non-profit connection. Using non-profit organizations to advance his boss's political fortunes is a strategy that Arnold's advisors should recognize.

The California State Protocol Foundation, California Recovery Team, the California Commission for Jobs and Economic Growth and his Inaugural Committee are just some of the "non-profit" organizations that Arnold Schwarzenegger uses to fund his political agenda.

Kelley's orchestration of Quackenbush's fake non-profits makes him unfit for a job with consumer protection responsibilities, just as Arnold's phalanx of non-profits with unlimited donations and hidden donors are unworthy of the office of governor.

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