Besieged PUC Commissioner Rejects Calls for Resignation

San Francisco Chronicle

One of the California’s top utility commissioners yesterday rejected demands that he resign, despite a finding last week that he broke state rules by investing in a wireless company his agency regulates.

Attorney General Bill Lockyer said last week that California Public Utilities Commissioner Henry M. Duque violated state rules that bar commissioners from holding a financial interest in regulated utilities. Duque bought 700 shares in Nextel Communications, the fifth-largest wireless carrier,

on May 12, 1999. Duque also voted in several matters affecting Nextel and the wireless industry.

“It would therefore appear that defendant’s office became vacant immediately upon his acquisition of the 700 shares,” Lockyer wrote in a four- page opinion. Lockyer also said it was “immaterial” that Duque sold the shares after a Chronicle reporter asked him in August whether it was a conflict of interest. Additionally, Lockyer gave a Santa Monica watchdog group the green light to file suit to force Duque from office.

But yesterday, Duque’s attorney insisted the purchase was an innocent oversight, and said the mistake does not warrant expulsion from office. “He is not going to resign,” said attorney Joseph Remcho of San Francisco.

Duque has repeatedly said that he didn’t realize the investment was a problem because federal regulators handle most wireless issues. He also said he sold the shares as soon as he was advised of the conflict.

Still, the Foundation for Taxpayer and Consumer Rights said it plans to file suit in state court as early as next week.

“We think the law is clear,” said Pamela Pressley, an attorney from the watchdog group. She also said Duque should have known that wireless firms were within the PUC‘s purview. Nextel is registered with the PUC as a utility and has weighed in on matters before the PUC, such as proposals for changes in telephone area codes and a plan to create a “bill of rights” for telephone customers.

Duque, an appointee of former Gov. Pete Wilson, is part of the Republicans’ narrow 3-2 majority on the commission.

But the Democrats are expected to take control of the commission next year, even if Duque retains his seat. Republican Commissioner Josiah Neeper’s term ends this year, and Gov. Gray Davis is expected to appoint a more liberal replacement.