THE DAILY OUTRAGE: OMINOUS SIGNS THAT BUSH SEEKS TO END PUBLIC'S DEFENDER IN PG & E BANKRUPTCY
TP,
Re: If you've got the Supremes, most of Congress, the media, and the Executive branches, what else do you need?
How about a compliant Attorney General who willfully removes the public's best point person in bankruptcy proceedings?
sacbee.com
Ashcroft removes bankruptcy trustee
She's won praise and drawn fire for acting as the public's advocate in the PG&E case.
By Claire Cooper -- Bee Legal Affairs Writer
Published 2:15 a.m. PDT Wednesday, June 26, 2002
Linda Ekstrom Stanley, the no-nonsense official who has stood up against corporate giants in the Pacific Gas and Electric Co. bankruptcy case, has been removed from office two years before the end of her term under orders by U.S. Attorney General John Ashcroft.
As regional bankruptcy trustee for eight years, Stanley has been the U.S. Justice Department's official watchdog over bankruptcy cases in Northern and Eastern California and Nevada.
She has acted aggressively as the public's advocate, particularly in the 14 months since California's largest utility filed for bankruptcy protection. She attempted to give the utility's ratepayers a voice in the process and opposed giving the utility an exclusive right to draft the plans for its future.
She said Tuesday that she was informed of her dismissal "out of the blue" in a phone call late last week. Ashcroft's written order, dated June 18, gave no reason, according to Stanley, who said she didn't know if the action was related to the PG&E case.
PG&E had no comment.
Dana Perino, a Justice Department spokeswoman, said other trustees have been replaced in the past year, but she was unable to say whether the vacancies occurred through resignation or dismissal. All trustees were informed when Ashcroft took office that "their positions would be reviewed as part of the normal course of business," she said.
No successor to Stanley was announced.
Some prominent members of the bankruptcy bar said the likely explanation was simply that Stanley is a Democrat in a Republican administration.
"Maybe there's some Republican that wants the job," said John Hansen, a former Stanley law partner.
However, Jack Williams, scholar in residence at the American Bankruptcy Institute, said, "This is the first trustee that I know of that has essentially been fired" since creation of the office.
Although the federal statute establishing the trustee's office gives the attorney general the power to replace any of the nation's 21 regional trustees, Williams said removing one "unless for fraud or embezzlement or things like that" contradicts the intent of Congress in giving trustees five-year terms, a year longer than the president's.
Williams, Hansen and others familiar with Stanley's work said she may have attracted negative attention by espousing the view that trustees should protect the public interest and not simply monitor the bankruptcy process.
She was "the most high-profile and vocal" advocate of that view in the nation, said Williams.
"That's new," he said, adding that "reasonable minds could disagree" on whether the statute allows a U.S. trustee to take on such a role.
In that debate, though, Stanley seemed to have the support of the bankruptcy judges in her area.
"Generally, my colleagues all agree she was doing what the office was designed to do," said U.S. Bankruptcy Judge Dennis Montali, who sits in San Francisco and presides in the PG&E case.
Montali said he sometimes solicited Stanley's recommendations and, while he disagreed with her responses at times, he believed she ran her office at "the highest level of professionalism and integrity." He declined to speculate about the effect of her departure on the PG&E case.
Gary Cohen, general counsel of the state Public Utilities Commission, said he "hoped and expected" the trustee's office would continue its active role. Stanley did a good job, he said, of raising issues when the commission held back because of concern that its legal immunity might be jeopardized.
The Utility Reform Network issued a statement calling Stanley's dismissal an apparent "political move that will benefit PG&E at consumers' expense."
Steven Felderstein, the state's outside counsel in the PG&E case, said Stanley "paid attention to the issues that she thought were going to be important," such as whether the public was well-represented.
Richard Heltzel, the bankruptcy court clerk in Sacramento, said Stanley raised the caliber of professionalism in the trustee's office and opened the office to new ways of doing things.
"I've loved the job," said Stanley. "I've tried to make a difference. I think I've changed the attitude that people have about the office of the U.S. trustee."
Her last day in office will be July 2. Stanley said she'll spend it in Montali's court, where a hearing is scheduled on 21 lawyer and accountant fee applications in the PG&E case. She has filed objections to scores of items, including pay increases of up to $125 an hour for one firm's lawyers.
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Just politics? This one smells real bad.... :(
-Ray |
