CPUC President and State Senator Blur the Lines of Propriety

by Mindy Spatt, TURN Communications Director

     Most democrats support Senator Jerry Hill’s CPUC accountability bill, SB 434.  Not so Senator Carol Liu, who fought valiantly against the bill.  Her opposition was personal not political.  Liu saw the bill as a “jab” at her husband, CPUC President Michael Peevey. 

She took to the Senate floor to make her case, but the bill passed despite her opposition, 26-2.  The jab she wanted to protect her husband wasn’t a very sharp one for a man who has presided over one of the most powerful agencies in California for 11 years. It would stop Peevey and other Commission chairs from simultaneously chairing nonprofits created by the Commission. 


Mr. Peevey now chairs two such boards, and has twice been reined in by the Legislature for trying to create customer-funded research institutes that he might also serve on the boards of.


Senator Hill believes President Peevey’s role on boards that disperse public money creates a clear conflict of interest, and the other Senators apparently agree.  But Liu and Peevey have been impervious to accusations of conflicts in the past.


Mr. Peevey, under whose watch the fatal San Bruno explosion took place, is a former President of Southern California Edison Company.  He has come under repeated criticism for his laxity toward Edison, PG&E and other utility companies, and for his participation in lavish travel junkets also attended by top industry executives and lobbyists.  A couple of months after the San Bruno explosion, Peevey and his wife jetted off to Madrid along with a group of utility lobbyists and executives, courtesy of CEFEE, an astro-turf nonprofit devoted to making sure utility industry representatives and public officials get to spend quality time together bonding in top-notch hotels and restaurants places like Brazil, Sweden, Italy, South Africa and Germany. 


Of course Mr. Peevey isn’t the only participant who brings his significant other along.  But his significant other is a legislator who Peevey’s utility buddies have been very generous to.  Now termed out, Senator Liu doesn’t appear to be fundraising anymore.  But in past years, she has enjoyed funding from many of the CPUC’s wealthiest stakeholders, drawing criticism from the media and from good government advocates


In fact, Liu and Peevey were the subject of an expose that aired in 2004 on KCBS Los Angeles in which a utility company lobbyist was taped telling a former CPUC Commissioner that his company, SDG&E, would “look real bad” if they didn’t attend Liu’s fundraisiers. 


SDG&E was hardly alone. The list of contributors to Liu’s campaigns with an interest in her husband’s decisions at the CPUC reads like a who’s who of top utility brass; Ken McNeely of AT&T, Tom Bottorff of PG&E, Alan Fohrer of
SoCal Edison, and many others.  Utilities have also contributed to Liu through their PACS, and energy, water and phone companies including Calpine, Constellation energy, Verizon and Cal Water Association have likewise given generously. 


With all that, stopping Mr. Peevey from controlling nonprofits set up with public funds, funds that should be influence-free, would seem like just the tip of the iceberg.  But according to the Sacramento Bee it isn’t the first time Ms. Liu has jumped to protect her husband’s turf- she voted against a similar bill in September.


The luxurious trips are not illegal, nor are the campaign donations.  But something can be legal and still stink.  With two high-paying, high profile pubic jobs, Ms. Liu and Mr. Peevey would to well to find some new travel companions- ones that don’t have a huge financial interest in many of the outcomes at the CPUC.  And, should Ms. Liu run for office again, she might look a bit further afield for financial support.