State fines former commissioner;

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Duque cited for utility commission votes on Nextel

The San Francisco Chronicle

The state Fair Political Practices Commission decided this week to fine former state utility Commissioner Henry Duque $18,000 for repeatedly voting on issues related to Nextel Communications, even though he owned stock in the mobile phone company.

The decision marks the second time that Duque, 73, a former member of the California Public Utilities Commission, has been sanctioned for holding stock in Nextel while helping to regulate phone companies. The Chronicle first reported Duque’s investment in Nextel in August 2000.

In April 2002, a San Francisco Superior Court judge ordered Duque to be removed from office and to pay a $5,000 fine for violating state law, which bars utility commissioners from holding stock in companies regulated by the PUC, including Nextel.

A state appellate court later overturned the decision, ruling that the law did not specify any penalty for violating the statute.

Now, three years later, the state has found that Duque violated broader state conflict-of-interest rules by voting nine times on issues related to Nextel.

Specifically, Duque, a Republican appointee, voted eight times on area code issues and once to approve an agreement between Nextel and Pacific Bell, now
known as SBC Communications.

When he voted on those issues between 1999 and 2000, Duque held Nextel stock worth between $14,242 and $36,250. The Political Reform Act bars officials from participating in decisions directly affecting a company if they own more than $10,000 in stock in the firm.

As part of a settlement approved Thursday, Duque agreed to pay the $18,000 fine. He earned an much as $70,000 on his Nextel investment.

Duque, who lives in Los Altos Hills, has repeatedly said he didn’t realize Nextel was regulated by the PUC until he was contacted by a Chronicle reporter in 2000. Duque said he sold the stock within days after the reporter asked him about the investment. He also pointed out that he had listed the investment in financial disclosure statements.

“During the time I was a commissioner of the PUC, I strove to adhere to the highest ethical standards and avoid any appearance of impropriety,” he said in a statement Friday.

Still, the FPPC pointed out that conflict-of-interest violations are serious and said Duque violated the rules nine times over nine months.

Duque’s “conduct in this case was not an isolated event.”

Asked why the FPPC took so long to act, a spokesman said the agency has limited funding and staff. “Investigations often take a long time,” said spokesman Theis Finlev. “We need to be careful that we don’t rush through them.”

In light of the fine, the group that unsuccessfully went to court to try to oust Duque from office said he should have to repay the state for the cost of defending him in court. At one point, the legal bills were estimated to be more than $100,000.

“We think it’s outrageous that the taxpayers should pay the bill,” said Carmen Balber, a onsumer advocate for the Foundation for Taxpayer and Consumer Rights.

She said she was pleased that the FPPC finally decided to take action, but pointed out the fine was one-quarter of Duque’s profits.
E-mail Todd Wallack at: [email protected]

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