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Communications Daily

Cal. state court is expected to decide by end of Jan. on lawsuit over Cal. PUC Comr. Henry Duque’s ownership in 1999 and 2000 of stock in wireless carrier Nextel.

Question facing Cal. Superior Court, San Francisco, is whether Duque voluntarily purchased $10,000 worth of stock in company partly subject to PUC jurisdiction, which would be offense under Cal. law that could be cause for his removal from office, or was involuntary purchase made by investment account managers acting on Duque’s behalf.

Lawsuit was brought by Foundation for Taxpayer & Consumer Rights, which has sought Duque’s ouster because of his investment dealings in telecom and other regulated industries.

If court decides purchase was involuntary, it then must determine whether Duque sold his Nextel stock within “reasonable” amount of time as law requires.

He acquired Nextel stock in May 1999 and sold it in Aug. 2000 after newspapers published story questioning whether his holding of wireless company’s stock created illegal conflict of interest.

Although PUC doesn’t regulate wireless rates, it does have jurisdiction over other terms and conditions of wireless service such as interconnection.

If court rules Duque broke law by voluntary purchase of Nextel stock or by holding on for too long to shares involuntarily acquired, court under Cal. constitution lacks authority to remove him from office.

Removal would require 2/3 majority vote of state legislature. Court heard oral argument Dec. 17 and final briefs are due in mid-Jan.

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