SACRAMENTO, CA: A judge should not have removed Henry Duque from the California Public Utilities Commission for an alleged violation of conflict-of-interest laws, a state appeals court has ruled.
Duque, a former banking executive appointed to the state agency by then-Gov. Pete Wilson in 1995, was sued by a consumers group after news reports said he had purchased 700 shares of stock in 1999 in Nextel Communications, Inc., a phone company regulated by the commission.
San Francisco Superior Court Judge Alfred Chiantelli last April ordered Duque removed from the commission for investing in a company regulated by the PUC, although the order was stayed pending appeal.
Chiantelli also ordered Duque to pay a $5,000 fine and attorney’s fees.
But in its narrow ruling published last Friday, the state’s 1st District Court of Appeal in San Francisco said Duque, who stayed on the PUC until his term expired Jan. 1, violated no laws and shouldn’t have been removed.
“It’s great news because obviously this clears him,” said Thomas A. Willis, Duque’s attorney. Duque was also represented by San Francisco lawyer Joseph Remcho, a well-known attorney for numerous California politicians who died earlier this month in a helicopter crash.
“This was Joe’s last oral argument,” Willis said of Duque’s appeal. “He would have been very pleased to know it turned out this way.”
The appellate decision didn’t address the propriety of Duque owning stock in a company he regulated. The decision simply interpreted a law that the appellate panel said was flawed.
The law says a commissioner who comes to possess an interest in a PUC-regulated company “other than voluntarily” must divest himself of the interest or be removed.
“The statute does not describe what occurs when a commissioner voluntarily acquires an interest in a regulated company,” the appeals ruling said.
The court went on to say it had the option of prescribing “an implied remedy” by agreeing that Duque should be removed, “but we decline to do so.”
Pamela Pressley, attorney for the Foundation for Taxpayer and Consumer Rights that filed the original lawsuit, said her group will appeal the ruling to the state Supreme Court.
“It’s not a great outcome,” she said of the appellate ruling. “It allows a commissioner who goes out and voluntarily purchases something and holds it to suffer no consequences for his actions.”
Duque was not available for comment.
(Distributed by Scripps-McClatchy Western Service, http://www.shns.com.)