Calif. regulatory appointment raises flap

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SAN FRANCISCO, Jan 30 (Reuters) – Michael Peevey, only a month into his job as president of the California Public Utilities Commission, raised a ruckus on Thursday for appointing a long-time fellow regulator – recently retired – a special consultant.

Peevey, a former executive at Los Angeles-based Edison International, tapped commissioner Henry Duque, who retired in December, to stay on for six months to manage the transfer of money for a telecommunications program for deaf and disabled consumers to the state treasury.

Gov. Gray Davis appointed Peevey to the top regulatory post Dec. 31, demoting Loretta Lynch to a commissioner’s seat.

It is highly unusual for a departing CPUC commissioner to be hired back, according to commission insiders. The last known case was believed to be in 1992.

The appointment, which has yet to be approved by two state departments, angered critics who noted that a state appellate court ruled recently that Duque had broken California law by buying stock in a telephone company regulated by the CPUC.

But the appellate court reversed a lower court judge’s decision fining Duque and trying to boot him off the CPUC.

Duque called the investment an innocent mistake, adding that he immediately sold the shares when a reporter questioned him about it.

In a memo to CPUC Executive Director Wes Franklin, Peevey requested Duque’s appointment, saying he was “uniquely qualified to assist me and the commission based on his long experience as the lead commissioner on Deaf and Disabled Telecommunications program matters.”

The appointment drew scorn and support during a spirited hour-long discussion at the CPUC meeting Thursday.

Consumer activists called the appointment “cronyism” and “a free ride on the backs of taxpayers,” noting that California faces a budget deficit of $35 billion and cannot afford Duque, despite the fact a salary has not been disclosed.

Representatives for the state’s deaf and disabled, however, cheered the move, praising Duque as “thoroughly familiar with the programs” and the right person for the job.

Former CPUC President Loretta Lynch grilled staffers on recruiting and hiring requirements, program invoices and audits, prompting Peevey to remark, “I am beginning to feel like I am participating in ‘L.A. Law’.”

At the end of the hour, the commissioners retreated into a closed-door meeting without announcing a decision on the appointment.

Consumer Watchdog
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