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Arnold's new Chief of Staff,
Susan Kennedy, was still working as a Public Utilities Commissioner
when she was secretly paid $25,000 by the Gov's re-election committee,
as the LA Times reported yesterday. What has not been reported is where
that $25K came from (more on that below) and why Kennedy should resign.

Kennedy's last major vote at the PUC, which came about two weeks after
getting paid by the Governor's campaign, was to push a toothless
replacement of the strong Telecommunications Consumer Bill of Rights
that she repealed early in her tenure at the PUC. By putting this
meaningless regulation in place before leaving, Kennedy was protecting
the telecommunications industry from the potential move toward consumer
protection that has been proposed by Commissioner Dian M. Grueneich.

So where did that $25,000 that the Governor's Re-election Campaign paid
Kennedy come from? None other than AT&T. According to Arnold's
campaign report, on November 21st -- less than two weeks after it was
reported that Kennedy was in line for a job with Arnold and two weeks
before Arnold's campaign quietly paid Kennedy $25K -- AT&T gave the
Gov two contributions. One for $12,300 and one for $12,700. Put 'em
together and what have you got? Bibbity, Bobbity Bribe!

(In case you're wondering, AT&T and it's telecom coalition, the
Wireline Group, are parties to the Consumer Bill of Rights proceedings
and have each filed comments supporting Kennedy's bogus telecom
proposal.)

Susan Kennedy created an irreparable conflict by taking money from the
Governor's campaign, while still being paid by taxpayers at the PUC,
and then pushing AT&T's interests as Commissioner. It would have
been illegal for the AT&T to give Commissioner Kennedy the $25,000
directly. But laundering the money through Arnold's campaign is no
different and deserves the attention of the FBI public corruption
division. In the meantime, Kennedy must resign and the PUC should
unwind the proceeding that created this phony "bill of rights."