Bloomberg News

San Francisco, April 12 (Bloomberg) — California’s Public Utilities Commission should stop paying legal fees for defending Commissioner Henry Duque against a conflict-of-interest lawsuit, the consumer group that brought the suit said.

The Foundation for Taxpayer and Consumer Rights filed suit against Duque in January, claiming the commissioner bought 700 shares of stock in Nextel Communications Inc., a wireless telephone company, in May 1999, then voted on commission matters involving the company.

In a letter to Commission President Loretta Lynch dated yesterday, an attorney for the consumer group said other Duque holdings raise potential conflicts, including an investment in San Juan Basin Royalty Trust, which the group says sells natural gas to a unit of Duke Energy Corp.

”It is clear from Mr. Duque’s reported investments that he has repeatedly placed himself in a position in which his personal financial interests could influence his decisions as a PUC commissioner,” wrote attorney Pamela Pressley of the Santa Monica, California-based group. The commission should ”cease paying Mr. Duque’s legal fees,” she wrote.

Duque’s office referred calls about the matter to his attorney, Thomas Willis of Remcho, Johansen & Purcell. Willis said that none of the companies in which the consumer group claims Duque invested are directly regulated by the commission or based in California.

”It looks to me like they’re trying to impose a brand new standard on what is a potential conflict,” Willis said.

Lynch said in a December letter to Duque that the commission would pay Duque’s legal fees in the Nextel matter. The commission reserved the right not to pay his fees if ”there is a substantial change in the facts on which this authorization was based,” she wrote at the time.

Lynch, through a spokeswoman, declined to comment.