Charles Quackenbush, insurance commissioner for the State of California, is fighting for his political life amid accusations that he "coddled" insurance companies his office regulates by dropping billions of dollars in fines in exchange for much smaller contributions to two nonprofits managed by department staffers, and more serious charges that he accepted political donations from insurers, according to several news sources.

The San Jose Mercury News reports that Quackenbush -- who won re-election in 1998 -- reduced up to $3.3 billion in potential fines against California insurance firms based on "mishandled" insurance claims from 1994's Northridge earthquake.

The companies instead contributed to the $11 million California Research and Assistance Fund, intended to help earthquake victims. No money has gone to the Northridge residents, although $3 million was used to pay for advertisements that featured the insurance commissioner promoting earthquake preparation, the San Francisco Chronicle reports.

Title and escrow companies facing fines and penalties have likewise contributed $2.8 million to the nonprofit Escrow and Title Insurance Consumer Education Foundation.

Because it is a 501(c)(3) entity, the insurance companies can deduct part of the contribution, which they couldn't do with the fines. Department officials couldn't confirm what programs may have been funded, or if the foundation has released any funds, the Mercury News reports.

George Grays, California's deputy insurance commissioner and the person who received grant requests for the California Research and Assistance Fund, resigned Thursday.

Quackenbush has said he will re-examine the role of the two foundations.

The insurance commissioner also has been accused of taking donations for his political campaign from companies he regulates, a violation of state law, the Chronicle reports.

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