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Los Angeles Times

A consumer group pushing to remove a member of the powerful California Public Utilities Commission said Friday it will give him a few days to consider resigning before it files a lawsuit in state court to try to force him out over alleged conflict-of-interest violations.

The case against PUC member Henry Duque gained substantial ground Friday when Atty. Gen. Bill Lockyer issued a strongly worded ruling clearing the way for the Foundation for Taxpayer and Consumer Rights to pursue the matter in court.

Duque is accused of violating rules that prohibit a PUC members from owning a financial interest in a corporation that is subject to regulation by the commission.

Observers say the situation is unprecedented, and could result in a messy shake-up at the PUC, a five-member agency that wields substantial control over energy, telecommunications, transportation and water matters statewide.

“I’ve not seen this happen in the 20 years of my dealings with the PUC,” said Michael Shames, executive director of the Utility Consumers Action Network, a San Diego group that is active in energy and phone matters. “But the law is pretty clear, and I don’t see how Commissioner Duque can remain in that seat unless Gov. Davis reappoints him.”

The Duque case stems from the commissioner’s purchase in May 1999 of 700 shares of stock in Nextel Communications, a wireless phone company that periodically has business before the PUC involving area codes, agreements with other phone companies and other matters.

Duque sold the shares when the potential conflict came to light this year, but he had held the stock for more than a year and had voted on at least one matter involving Nextel.

Duque does not dispute the stock purchase, but he argues that he did not realize Nextel was regulated by the PUC and his actions thus cannot be construed as a violation. Duque has not disclosed how much profit, if any, he made on the investment.

He had hoped that Lockyer would side with him and block the planned lawsuit by the consumer group. Instead, the state’s top law enforcement officer sided solidly with the Foundation for Taxpayer and Consumer Rights.

Tim Sullivan, an advisor and spokesman for Duque, said Friday the commissioner and his attorney were both out of town and not available to comment.

In a four-page decision released Friday, Lockyer said Duque clearly violated the law, adding “it would therefore appear that Duque’s office became vacant immediately upon his acquisition of the 700 shares in Nextel on May 12, 1999.”

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