Report Blasts Brown Over Fossil-Fuel Donors

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Governor's office says his environmental record makes advocacy group's claims 'cuckoo'

A Santa Monica consumer group is criticizing Gov. Jerry Brown for his ties to utilities and other companies reliant on fossil fuels, linking almost $10 million in contributions from 26 oil, gas and power companies to decisions by Brown administration officials that directly benefited the donors.

The Governor’s Office says political contributions have not influenced his policies, and his environmental record speaks for itself. Allies said the report by Consumer Watchdog misses the point of Brown’s record, although some advocates said the study raises troubling questions.

Many of the political donations examined came within days or weeks of key policy decisions, the report said.

In one case, Southern California Edison gave $130,000 to the state Democratic Party on the same day then-Public Utilities Commission President Michael Peevey took an undisclosed meeting with an Edison executive in Warsaw, setting in motion a $4.7 billion deal for closure of the failed San Onofre nuclear plant, charging customers 70 percent of the damage.

Peevey, a former Edison executive who stepped down as commission president in December 2014, is at the center of an ongoing criminal investigation by the state Attorney General’s Office into backroom deal-making between regulators and utility executives.

In response to the Consumer Watchdog report, Brown spokesman Evan Westrup said, “The governor’s leadership on climate is unmatched. These claims are downright cuckoo.”

Westrup cited a host of Brown policies and decisions since he was elected in 2010 that were aimed at protecting the environment.

Among other things, Brown committed to reducing greenhouse gas emissions to 40 percent below 1990 levels. He also also pushed to generate half the state’s electricity from renewable sources by 2030 and to get 1.5 million zero-emission cars on California roads by 2025.

The state’s three largest electricity monopolies — Edison, Pacific Gas & Electric and San Diego Gas & Electric parent Sempra Energy — gave almost $6 million of the $9.8 million in contributions identified by Consumer Watchdog.

Sempra Energy officials said they strongly disagreed with the premise of the report. The company considers working with policymakers to be an important and necessary part of the business, they said.

“We engage with political stakeholders to inform them of our views on issues for the betterment of our customers and shareholders,” Sempra said in a statement. “Sempra Energy contributes to candidates, political parties and ballot measures only as allowed by law.”

The donations went to Brown, the California Democratic Party and to causes favored by the governor such as an art school and military institute in Oakland, where Brown previously served as mayor, the report said.

More than $4.4 million of that total was given to the Democratic Party between 2011 and 2014, a time when two of Brown’s top aides worked for the political party. State Democratic Party leaders subsequently contributed $4.7 million to Brown’s campaign, the report said.

“The evidence points to Brown and his operatives using the Democratic Party as a political slush fund to receive contributions in amounts greater than permitted to his candidate committee, and masking money from unpopular energy entities,” the report said.

The group’s report looked at a limited slice of campaign contributions to support its conclusions, leaving out two other significant factors.

For one thing, utilities and oil companies also give to Republicans in large amounts. And green interests also support Brown and the Democrats.

SolarCity, for example, donated more than $14,000 to Brown’s gubernatorial campaign. The SunPower Corp. donated $5,000 to Brown in 2013.

Sempra Energy gave $115,000 to the California Democratic Party and $115,000 to the California Republican Party and the state Republican Leadership Fund in 2015.

In the last six months of 2015, Pacific Gas & Electric donated $305,000 to the state Democratic Party and almost $200,000 to its Republican counterpart.

Edison International, parent company of Southern California Edison, gave $200,000 to the California Republican Party on May 10, on top of $85,200 it gave since last August. The company donated $320,000 to the state Democratic Party over the same period.

“Like many companies, Edison International exercises its civic responsibility and participates in the political process by supporting candidates and committees in both major parties,” Edison said in a statement. The company declined to respond to questions about regulatory decisions.

PG&E similarly did not respond to questions, but issued a statement saying it adheres to the highest standards in disclosure and compliance. It also said contributions are paid by shareholders — not ratepayers.

University of California Professor Daniel Kammen said the Consumer Watchdog findings missed the point. He said the Brown administration turned the idea of climate-friendly economic growth into a reality and created the the most progressive renewable-power standard on the planet.

“Overall, I do think that this (report) really gets the message quite wrong,” said Kammen, who runs a renewable power lab at the University of California Berkeley. “Gov. Brown has been a very important leader who has accomplished a tremendous amount in the clean energy transition.”

Former San Diego City Councilwoman Donna Frye, who cut her political teeth as an activist fighting ocean pollution and other contaminants, said the report shows that Brown may be more interested in supporting donors than promoting ecology.

“The report raised serious concerns about whether the governor was as concerned about helping the environment as he was about helping his friends,” Frye said. “His failure to support meaningful reforms at the CPUC only adds to those concerns.”

Brown vetoed six proposed CPUC reform bills last year, saying they were unworkable as a whole. He has agreed to a different set of proposals this year with an eye toward overhauling the agency.

Nicole Capretz, executive director of the San Diego-based Climate Action Campaign, declined to comment on Brown at all, although she commented on the companies featured by Consumer Watchdog.

"This report highlights what we have always known,” she said. “Sempra and SDG&E will stop at nothing to keep their monopoly stranglehold and our dependence on outdated polluting fuels, to the detriment of families wanting the opportunity for clean air, clean energy and lower bills in the face of a climate crisis."

Under Brown, the report said, state regulators approved more than $130 billion in rate hikes for customers of the three largest investor-owned utilities in California — Edison, SDG&E and PG&E. Sempra’s stock price more than doubled since Brown was elected, it added.

According to previously released emails, the governor personally intervened in a proceeding to encourage then-PUC Commissioner Mark Ferron to approve a natural gas-fired power plant in Northern California for PG&E.

The email from PG&E lobbyist Brian Cherry to one of his bosses described a private New Year’s Eve dinner with Peevey during which “he and Governor Brown used every ounce of persuasion to get Ferron to change his mind and vote for Oakley…Jerry’s direct plea was decisive.”

PG&E donated $20,000 to the California Democratic Party the day after the commission approved the plant, the report noted.

The report also noted that several top Brown administration officials previously worked for PG&E and his sister, former California State Treasurer Kathleen Brown, serves on the Sempra Energy board of directors.

“Sempra paid Kathleen Brown a total of $691,300 in stock and cash for her work from 2013 through 2015,” the report said. “Brown’s administration has taken extraordinary steps to keep open Sempra’s biggest natural gas storage asset in the West, Aliso Canyon, following the biggest methane gas leak from a well blowout in U.S. history.”

Brown signed a bill earlier this year requiring safety testing before the Aliso Canyon well can reopen.

According to Consumer Watchdog, Brown agreed to dismiss two regulators after an oil company complained they were slow to approve permits. The company later donated more than $470,000 to Brown’s political campaigns and the Oakland Military Institute.

Emails suggest that Brown’s top aide, Nancy McFadden, was PG&E’s “back-door route” on pending appointments to the utilities commission. The governor's office has suggested that the emails came from a lobbyist who was engaging in a common practice of exaggerating his influence in government.

Immediately before accepting the job as Brown’s top aide, McFadden was a PG&E executive.

Other records show the utility was asked for suggestions about who Brown should appoint to the commission. The day Brown named Ferron, a former banker, PG&E donated $41,500 to the state Democratic Party.

Consumer Watchdog said it spent four months sifting through previously released records, news reports and other public documents to compile the 44-page study, which it entitled “Brown’s Dirty Hands.” Several findings were based on previous reports published by The San Diego Union-Tribune, which is cited in the endnotes 13 times.

Earlier this year, the advocacy group filed a complaint against McFadden, alleging she failed to disclose stock options and other financial interests in PG&E at the same time she participated in decisions affecting the company.

The February complaint to the California Fair Political Practices Commission prompted McFadden to amend her state-mandated economic-disclosure reports. The commission is still reviewing other aspects of the McFadden complaint.

Jay Wierenga, a spokesman for the Fair Political Practices Commission, said Wednesday that it had received a copy of the new analysis and would review it to see if an investigation should be opened.

“It was just submitted as a complaint,” he said. “As with all complaints, we will take it under review to determine its merits.”

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