Group Seeks Ethics Review Of Top Aide To California Governor

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A former executive of Pacific Gas & Electric Corp. signed an agreement to protect the reputation of the utility as part of a $1 million settlement she reached with PG&E when she left to work as a top aide for the California governor, a consumer group alleged in a complaint filed with the state's political watchdog.

The advocacy group Consumer Watchdog said Monday that it has asked the Fair Political Practices Commission to investigate whether Nancy McFadden had a conflict of interest because of her stock holdings in PG&E and the settlement while working as executive secretary to Gov. Jerry Brown.

The group says McFadden took the lead for Brown on matters dealing with the Public Utilities Commission while she owned more than $100,000 in PG&E stock. McFadden reported owning stock in PG&E in 2011, 2012 and 2013.

She no longer reported owning the stock in 2014. The group says she is required to report the date of any stock sale.

"Public officials are not supposed to make public decisions when their personal finances are at issue," said Jamie Court, Consumer Watchdog president.

California has numerous conflict-of-interest laws for public officials. In general, government officials are required to disqualify themselves from decisions that could affect their financial investments.

The governor's spokesman, Evan Westrup, said the complaint "is riddled with inaccuracies and has no merit." He added: "Folks inflate their influence on and access to this office every day of the year in this town – and this individual is no different."

Westrup, who said he was responding on behalf of McFadden, the governor's office and the governor, called the separation document a standard corporate agreement. He did not respond to more detailed questions.

Brown appointed McFadden as his executive secretary on Jan. 5, 2011. Later that month, he appointed two new commissioners to the Public Utilities Commission, which regulates utilities. The complaint says they were seen as "overly pro-consumer."

The agreement cited in the complaint says in exchange for a payment of $1,044,000, McFadden agrees to refrain from "engaging in any conduct or course of action or making or publishing any statements, claims, allegations or assertions, which have or may reasonably have the effect of demeaning the name or business reputation of the company," or anyone affiliated with PG&E.

The 57-page complaint cites emails between former PUC President Michael Peevey and PG&E executives, who were concerned about falling stock prices in the wake of a Sept. 9, 2010, pipeline explosion and fire that killed eight people near San Bruno. The company was later cited for pipeline safety violations.

"Nancy McFadden was the conduit for the introduction to Governor Brown of PG&E's preferred candidate to fill the last vacancy on the PUC, one that would determine whether the balance of power remained with Peevey and pro-utility commissioners, or swing more toward the new consumer-oriented appointees," the complaint said.

The Fair Political Practices Commission typically takes a few days to a few weeks to decide whether to investigate, spokesman Jay Wierenga said.

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