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Quake fund under fire – Audit underway into spending

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A nonprofit foundation created with insurance company contributions for earthquake research has given $500,000 to a community group whose activities are entirely unrelated to earthquakes, the Los Angeles Times reports.

James Shelby, the Greater Sacramento Urban League president and CEO who accepted the donation from the California Research and Assistance Fund, said the contribution helped construct a $5.1-million building, the Times said. 

State Insurance Commissioner Chuck Quackenbush indicated the money was solely dedicated to earthquake research and reimbursements to Northridge earthquake victims when he created the fund.  There was no mention of community outreach, the Times says. 

Quackenbush’s staff told the Times that he directed six of the state’s major insurance companies to contribute nearly $12 million to create the fund as a penalty for mishandling of Northridge earthquake claims. 

Deputy Commissioner Dan Edwards said the $500,000 contribution to the Urban League was unrelated to Quackenbush’s election to the Urban League’s board of directors last summer. 

The transaction is being audited by Attorney Gen. Bill Lockyer to determine if the foundation violated any laws. 

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