Davis paying millions to energy consultants, contracts reveal

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San Jose Mercury News

SACRAMENTO _ Gov. Gray Davis has agreed to pay more than $17 million to a small group of financial experts and political consultants — some of them dubbed by critics as “a den of thieves”– to help him steer his way clear of the energy crisis.

New contracts released Monday show that the price tag for energy consultants has nearly doubled in recent months as the Democratic governor sharpened his attacks on power companies.

Among them are a former head of the Bonneville Power Administration who is being paid $300 an hour, a Southern California financial adviser who gets $400 an hour and a security firm paid $45,000 to protect the office where state workers buy energy.

Because some of the state’s biggest advisers have links to other major players in the energy crisis, the deals have been criticized by some state leaders and consumer groups.

Included in the group are former executives with Southern California Edison, which is trying to win legislative support for a financial bailout, and two New York investment firms. Saber Partners and the Blackstone Group, which are being paid $275,000 a month, could receive an extra $14 million if they can get legislators to back the Edison bailout.

State Controller Kathleen Connell, who released the contracts along with the long-term energy contracts Davis signed with power companies, called the arrangement “disturbing” and “unethical.”

Steve Maviglio, the governor’s spokesman, derided Connell as “a termed-out elected official who finished last in the Los Angeles mayoral primary with no political future and this is the only way she can have relevance.”

“The governor makes no apologies for hiring the best talent he can to negotiate the best deal for California,” he added.

Davis has been forced to scrap one high-profile contract. Last week, Davis cut ties with Mark Fabiani, a veteran Democratic Washington political consultant who was continuing to work for Edison while advising the governor.

At the same time, Davis scaled back his deal with Fabiani’s partner, Chris Lehane, who will be paid $9,000 a month instead of $30,000 a month as originally planned.

Both men are still due $30,000 for work in June.

Doug Heller, a consumer advocate for the Foundation for Taxpayer and Consumer Rights, said Davis has created a “den of thieves” by hiring consultants who have little loyalty to California.

“The governor’s goal should be to ensure protection for ratepayers,” he said.

Along with Fabiani and Lehane, Davis has agreed to pay up to $6.2 million to the Electric Power Group, a firm headed by former Edison senior vice president Vikram Budhraja. Budhraja is being paid $275 an hour.

Davis also hired Edison vice president Larry Hamlin as his interim “construction czar” and is paying him $165 an hour.

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