Forum… Or Against ’em

By Count Friedrich von Olsen
Will the energy industry-related profiteering scandals around our governor ever cease?
The group Consumer Watchdog late last week filed a complaint with the state with the state’s governmental ethics regulation agency over Governor Jerry Brown’s right-hand woman seeking to influence appointments to the California Public Utilities Commission, even as she holds an interest in Pacific Gas & Electric. According to Consumer Watchdog, Nancy McFadden, who left Pacific Gas & Electric to serve as Brown’s executive secretary two days after he became governor in 2011, owns some $1 million in stock or stock options…
McFadden violated the Political Reform Act of 1974 “by using her official position to influence governmental decisions in which she knew she had a financial interest. Her actions impacted the value of the PG&E stock options she held,” according to the complaint.
McFadden is essentially, Governor Brown’s chief of staff, tantamount to the position Grey Davis held under Governor Brown the first time he was governor thirty some years ago…
Evidence supporting the complaint consists of emails between a regulator and utility company lobbyist who had some interesting things to say about McFadden. Brian Cherry, who in 2011 was PG&E’s top lobbyist, freely references discussions he had with McFadden about Brown’s plans for California Public Utilities Commission appointments. Further, Cherry told then-Commission President Michael Peevey — a former president of Southern California Edison — he should get in the act in promoting appointees to the commission and that McFadden wanted to comply with Peevey’s choices. “Nancy asks if you have any names you would recommend,” Cherry wrote to Peevey in January 2011. “You can call her directly if you’d like.”
So far, emails from McFadden herself have yet to surface…
McFadden entered into a separation agreement with PG&E when she left the company to become Brown’s executive assistant. That separation agreement conferred upon her more than $1 million in stock options in February 2011. But that severance bonus came with a hitch. Its language committed McFadden such that she “agrees to refrain from performing any act” which “adversely affects the best interests of PG&E.”
Pesky things these emails. Those who wrote them never intended for them to be made public, I am sure. They show people in positions of public trust using the power that trust has installed in them to profit and get themselves ahead. The California Attorney General’s Office initiated a criminal investigation into regulators’ cozy relationships with utility companies after thousands of emails were released in the aftermath of a PG&E pipeline blast in San Bruno that killed eight people in 2010.
While a number of those emails related to the disaster in San Bruno, others opened up a window on the sordid self-interested dealings of people Jerry Brown appointed to oversee the interests of the public. Some emails documented Peevey and other regulators traveling and dining with utility executives, discussing business pending before the commission in communications. Others impacted by those decisions did not get the same access to the decision-makers…
The emails were so negatively revelatory that Cherry and two other senior PG&E executives were fired. Peevey elected not to try for a third six-year term on the commission in October 2014.
In some of the emails, Peevey seemed more concerned about how the governor’s appointments would impact utility companies than how effective those appointees would be in advocating for California’s consumers…
The emails reveal Cherry and Peevey exchanging information about Wall Streets downgrading of stock issued by PG&E and Southern California Edison days after Brown’s inauguration. When an analyst from Citigroup characterized commissioner Nancy Ryan’s possible non-confirmation and the pending appointments as “a major risk” to the utilities’ share values, Cherry sent Peevey the downgrade notification the morning of Jan. 11, 2011. This prompted Peevey to respond, “You should find a way to get this info to Brown as he makes his decisions on Commissioners ASAP. Probably best coming from a non-utility source, such as investment banker.”
Cherry responded, informing Peevey, “Done.”

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