State officials’ free junket to Japan with execs raises brows

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Sacramento Bee (California)

Two powerful state regulators and a trio of influential California lawmakers are in Japan this week, traveling with top corporate players in the industries they are tasked with overseeing.

Critics are calling their week-long jaunt to Tokyo — for which the lawmakers and regulators aren’t paying a dime — an all-expenses-paid junket that demonstrates the undue influence big business has on California government.

The California Foundation on the Environment and the Economy, a San Francisco-based nonprofit not required by law to disclose its donors, is paying for the trip.

The group’s board of directors is populated by the top executives at the biggest energy and telecom companies in the state — among them AT&T, Verizon, PG&E, Chevron, Sempra Energy, Southern California Edison and BHP Billiton — as the lawmakers and regulators tour Japan to discuss telecommunications and energy technology.

Along on the Asia trip — whose participants departed Thursday — are Timothy Simon and Rachelle Chong, two of the governor’s appointees to the Public Utilities Commission, the powerful state board that regulates California’s multibillion-dollar telecommunications and energy industries.

Also participating are Sen. Christine Kehoe of San Diego and Assemblyman Lloyd Levine of Van Nuys, both Democrats, who chair the legislative committees that oversee energy and telecommunications policy in California.

Sen. Alex Padilla, a freshman Democrat from Los Angeles and a potential swing vote on the Rules Committee — which will decide the fate of embattled PUC nominee Simon — is on the trip, as well.

“What makes this trip so particularly egregious is that the corporations are focusing on the exact levers of power in hosting this junket for the state’s top utility cops,” said Doug Heller of the Foundation for Taxpayer and Consumer Rights, a consumer-advocacy group. “If you had to identify the people with the most responsibility over utility issues in the state, they’ve brought the two in the Legislature and 40 percent of the Public Utilities Commission.”

During the weeklong excursion to Japan, the delegation will be meeting with Japanese telecom industry executives and touring a liquefied natural gas facility in Tokyo Bay, according to an itinerary submitted as part of an out-of-state travel request.

In letters justifying their participation, Chong and Simon wrote that “a firsthand understanding of how other policymakers are addressing these issues is critical.”

Calls to the PUC for further comment went unreturned.

The Governor’s Office defended the trips.

“It’s an educational trip run by a nonprofit organization, and we don’t see a problem with that,” said Aaron McLear, a spokesman for Gov. Arnold Schwarzenegger. “This is not a vacation.”

Alex Traverso, an aide to Levine, said the journey will help the lawmaker do a better job.

“In Lloyd’s situation, as Utilities and Commerce chair, to go on a trip studying the various innovations in telecommunications and broadband overseas is extremely useful for him,” Traverso said.

Kehoe’s office declined to comment.

Patrick Johnston, a former Democratic state lawmaker and chairman of the nonprofit sponsoring the trip, said the “participants are public officials whose policy interest areas match up with the subject of the trip,” in this case, telecommunications and energy policy.

One of the corporate executives traveling this week in Japan is Kenneth McNeely, the president of AT&T California.

Last year, McNeely helped secure major legislation allowing phone companies access to the state’s cable TV and Internet market. AT&T spent $23.6 million in lobbying for the bill, which was jointly written by Levine and Assembly Speaker Fabian Núñez, and signed into law by Schwarzenegger.

Gordon Diamond, an AT&T spokesman, said the firm strongly supports the nonprofit’s efforts “to bring business and environmental leadership together with legislative and regulatory officials.”

On Friday, the Public Utilities Commission announced that it had approved a video franchise agreement to allow AT&T access to California’s lucrative broadband market.

McNeely, who was traveling with PUC members Chong and Simon in Japan when the deal was announced, issued a laudatory statement, which Heller jested was made “over sake shots with the regulators, no doubt.”

The list of executives on the trip also includes Thomas Giles, chief executive officer, and Hiroki Haba, senior vice president for planning, of Sound Energy Solutions.

Mitsubishi-owned Sound Energy Solutions has joined forces with ConocoPhillips in hopes of establishing a liquefied natural gas, or LNG, terminal at the port of Long Beach.

That project has stalled, as a local commission voted to end negotiations earlier this year and the project’s environmental impact review is tied up in court.

But the two company executives will get to make their case in Japan, during a tour of an LNG facility in Tokyo Bay, identified on the itinerary as “Sound Energy … LNG tour/briefing.”

Susan Jordan of the California Coastal Protection Network, an opponent of new LNG terminals, said the nonprofit’s trips allow corporate executives “an environment where you can develop relationships.”

Jordan, the lone nonprofit representative on a 2004 excursion to Australia and South Korea, said she doesn’t oppose the trips because they can be educational for lawmakers. But she said the list of participants skews too heavily toward industry.

“I wish that nonprofits working on the issue would have a greater presence,” Jordan said.

For Simon, the Japan trip offers a more personal opportunity: the chance to safeguard his job.

Named to the PUC in February, Simon has come under fire for mismanaging his personal finances, including filing for bankruptcy, according to published reports. He must be confirmed to his post by the Senate within a year.

Senate President Pro Tem Don Perata, an Oakland Democrat, has expressed reservations about the appointment, as has Kehoe, the Senate Democratic point person on energy policy who is with Simon in Japan.

Another key lawmaker on the trip is Padilla, who sits on the powerful Senate Rules Committee, the first stop for every appointee in the confirmation process. Simon needs only one Democratic vote — and two Republicans — to get through the panel.

“It raises a huge red flag when an appointee who has yet to be confirmed is on a trip with a member of a committee who will vote on his confirmation,” said Mindy Spatt of The Utility Reform Network, a utility-watchdog group.

Padilla’s chief of staff, Bill Mabie, said “it is entirely proper” for Simon and Padilla to be on the same trip.

“Senator Padilla went to Japan to learn more about Japanese progress in the areas of telecommunications, energy and reducing greenhouse gases. He hardly has to travel around the world to meet with a fellow Californian,” Mabie said.

Consumer Watchdog
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