Give this to AS when you see him, okay?
Energy Conflict-Of-Interests Charges Fly
Aug 2 7:55pm ET
By Andrew Quinn
SAN FRANCISCO (Reuters) - One California energy official holds $1 million in Enron Corp. stock. Another has a portfolio featuring shares in a cornucopia of big energy firms. Even the governor's chief spokesman put $12,000 into an energy generator.
As California struggles with its worst energy crisis, the question asked up and down the state is: "What's going on here?"
Consumer groups and Republicans say the answer is simple -- conflict of interest among top Democratic officials charged with digging California out of its energy mess.
But officials in Gov. Gray Davis' office have another answer: a politically inspired "witch hunt" aimed at smearing his administration by implying something is rotten in Sacramento.
Political analysts say the whirlwind of accusations and exposes threaten to create long-term problems for Davis, who is seen as a potential Democratic presidential hopeful.
"Some of the conflict of interest disclosures struck me as serious and worthy of closer investigation. Some of them seem to me ludicrous," said Bruce Cain, a political scientist at the University of California-Berkeley.
"But going into the election, people will ask not if he kept the lights on, but if he got the best deal for California, and found people who really had the state's interests at heart."
Republicans, whose power has waned in the nation's most populous state, jumped on the story. On Thursday, the California Republican Party demanded a probe into Davis' energy strategy.
"Governor Gray Davis' office is now mired in what can only be defined as a full-blown scandal," Republican spokesman Rob Stutzman said. "It is time for Gray Davis to step up to the plate and explain what is either corrupt or incompetent."
REPUBLICAN RIVAL MAKES FIRST CHARGE
Charges of conflict of interest in the Davis team surfaced last month as Secretary of State Bill Jones -- a Republican challenging Davis in next year's election -- called for a probe of consultants negotiating long-term energy deals designed to protect California from price swings on the spot market.
While Davis administration officials initially dismissed the charge as "pure politics", the governor fired five consultants over the weekend after belatedly asking them to file required economic disclosure statements.
This week Davis's chief spokesman, Steve Maviglio, found himself in the spotlight after newspapers reported he purchased $12,000 worth of stock in Calpine Corp. , a generator which has some $10 billion in long-term power contracts with the state.
Maviglio said he had no plans to resign and Davis expressed full confidence in his ability to push the case against power companies both denounce as "pirates" and "price gougers."
But the revelations did not stop there, and journalists have been busy digging up financial details on a raft of Davis appointees that create the impression personal greed is driving California's official energy policy.
In one case, the San Francisco Chronicle reported that the chairman of the California Energy Commission (CEC), one of the state's top energy regulatory bodies, owned as much as $510,000 in energy company stock at one point last year.
CEC spokeswoman Claudia Chandler said Thursday that this report contained "significant errors" and tarnished the reputation of CEC Chairman William Keese. While the Chronicle said Keese's holdings were in stock and not the far less legally problematic mutual funds, Chandler said in fact the stock was part of managed portfolios over which Keese had no direct decision-making power.
Keese, in a letter to the chairwoman of the Fair Political Practices Commission Thursday, said he believed there was no conflict of interest, had ordered the energy stocks sold, and established a blind trust for all future stock investments.
ANOTHER HEADACHE
On Thursday, a new headache emerged with reports that an official appointed to help oversee key aspects of California's electricity system owned more than $1 million in the stock of energy giant Enron Corp. -- a firm singled out for especially harsh criticism by California politicians.
Bruce Willison, dean of the Anderson School of Business at the University of California-Los Angeles and Davis' appointee to head the California Electricity Oversight Board, filed financial statements in April showing he had more than 11,000 shares of Enron stock before he became a member of the panel.
But he said he insulated himself from potential conflicts of interest by giving up his vote on any issues that might affect Enron before the board, which is charged with monitoring electric market activities.
Berkeley's Cain said the whirlwind of bad publicity over the conflict of interest allegations could undercut the successes Davis has had in staving off blackouts and putting California on a more solid energy footing. |
