PUC President Accepted Illegal Gifts From Regulated Entity

Sacramento, CA — Michael Peevey, the recently appointed President of the California Public Utilities Commission (PUC), disclosed that he illegally accepted a $2,134 gift from San Francisco Airport, over which the PUC exercises regulatory authority. The commissioner was provided free parking at the airport, according to his Form 700 conflict of interest disclosure, filed with California Public Utilities Commission late Monday.

Peevey, who has served as an unconfirmed Commissioner for the past year, faces a confirmation hearing today. The consumer watchdog organization, the Foundation for Taxpayer and Consumer Rights (FTCR), is calling on the Senate to reject Mr. Peevey’s appointment. PUC Commissioners are prohibited from accepting gifts which total more than $320 from any single source, in 2002, as provided in the California Code of Regulations, Title 2, Sec. 18730.

“The public cannot afford a utilities commissioner, let alone a president, who is willing to break the law and accept gifts from regulated entities,” said FTCR’s senior consumer advocate Douglas Heller. “Three years ago the legislature and the public forced the elected insurance commissioner to resign as conflicts and corruption rose to the surface; it is a no-brainer that an unconfirmed appointee who accepted illegal gifts should be gone in a heartbeat.”

Last year, the Senate did not act on Mr. Peevey’s nomination, largely because of questions about his ties to the power industry. Peevey had been an executive with Southern California Edison prior to forming his own private energy firm, New Energy, which was later sold to AES, one of the companies implicated (and fined for its role) in the California power crisis. Peevey has also served on boards of energy industry firms that benefit from deregulation, according to FTCR.

“Michael Peevey’s appointment was cast in the shadow of his long career in the power industry, and this disclosure should turn the lights out on his short career as a Commissioner,” said Douglas Heller. “It is incredible that a man who knew he had to take special care to prove his independence, would sabotage himself like this. But he has and he must be held accountable.”

According to the California Constitution, the Senate must either confirm or reject Michael Peevey’s appointment within one year of his initial nomination, which is March 10th. Peevey included a one page addendum to his Form 700 in which he acknowledged the illegal gift but, he wrote, he would not accept such a gift in the future. The “I promise not to cheat again” excuse is irrelevant, according to FTCR.

In 2001, the California Attorney General allowed FTCR to file a lawsuit on behalf of the People of California against former PUC Commissioner Henry Duque for illegal stock holdings in a regulated entity. FTCR prevailed in San Francisco Superior Court, which held that Mr. Duque’s office was officially vacated as a result of his conflict. A state Court of Appeals reversed the decision in January 2003, and FTCR is currently seeking California Supreme Court review of the case.