[NYTr] Corruption: Calif Regulator's Wife Gets Campaign Help from Regulated

[All the News That Doesn't Fit]

Los Angeles Times - Aug 10, 2007
http://www.latimes.com/news/local/la-me-liu10aug10,1,640278.story?coll=la-headlines-california

Regulator's wife gets campaign help from regulated

Companies with business before the PUC are contributing to the Senate 
campaign of Carol Liu. Her husband heads the commission.

By Jordan Rau

SACRAMENTO -- Phone and energy companies and officials with business 
before the California Public Utilities Commission and its chairman, 
Michael Peevey, are helping underwrite the state Senate campaign of 
Peevey's wife, Carol Liu.

Industries regulated by the commission have given $88,783 to assist 
Liu's 2008 bid to represent a district stretching from the San Gabriel 
to the San Fernando valleys. The donations, made by companies, 
executives, trade and employee groups, subcontractors and lawyers, make 
up 26% of the money Liu has raised so far.

A number of Liu's utility contributors have received favorable
decisions from the body that regulates them during Peevey's tenure.
Others have pending business.

Sempra Energy executive Edwin Guiles has given Liu $2,000, his only 
donation to a state legislative candidate this decade. The money was 
donated in 2005 and 2006, when Guiles was chairman of Southern 
California Gas Co., which Sempra owns.

The PUC is currently deciding whether to grant the Gas Co. an 11% rate 
increase for residential customers.

Calpine Corp., an energy supplier based in San Jose, gave Liu $2,000 
this year even though the company is in bankruptcy. In 2004, Peevey 
helped negotiate a pact in which San Diego Gas & Electric bought power 
from a Calpine plant in Otay Mesa. He has also led the PUC's 
reconsideration of electricity deregulation, which could benefit
Calpine and several other energy producers that contribute to Liu.

"It is quite apparent that Ms. Liu's connection to Mike Peevey has 
opened a large number of fundraising doors," said Michael Shames, 
executive director of Utility Consumers' Action Network, a San 
Diego-based advocacy group. "My concern is that the regulated
companies' eagerness to give money to Ms. Liu may be based upon those
companies' efforts to gain access to and favoritism from her husband."

Liu, Peevey and several donors who agreed to be interviewed said her 
financial support from utilities stems from relationships the former 
state assemblywoman forged in public office, not because of Peevey's 
position.

Liu, a Democrat from La Cañada Flintridge who served in the Assembly 
from 2000 until last year, said that since her husband was appointed to 
the PUC in 2002, "we have made it a pact to be very careful about 
conflicts of interest." She said, "He's been very careful not to
solicit money" from those he regulates.

She dismissed the suggestion that the donations to her campaign might 
sway Peevey: "Not if you know my husband. He does things independently, 
and he does what he feels is right."

Some of Liu's backers have not donated to any other legislative 
candidate in this decade. A Sempra spokeswoman said Guiles has known
Liu for years and "was just making his own personal contribution."

Liu has received a combined $20,325 from AT&T, its employee public 
action committee and five of its executives. The company has benefited 
from Peevey's successful effort to free phone companies from most rate 
regulation. Peevey also led the effort to repeal strict consumer 
protection rules for cellphone users that would have made it harder for 
telecommunications companies to lock customers into contracts and 
obscure the terms of the deals.

One AT&T donor to Liu is Cynthia Marshall, who was in charge of 
regulatory affairs for SBC Communications before AT&T acquired the 
company. Marshall, who now works for AT&T in North Carolina, donated 
$3,600, the maximum individual amount allowed under California law.

AT&T declined to discuss its corporate donations or make its executives 
available for interviews. One AT&T executive reached by The Times is 
Anita Gabrillien, vice president for external affairs, who said her
$125 donation to Liu was motivated by their shared interest in higher 
education, which Liu focused on while in the Assembly.

Liu said her relationship with AT&T "precedes ever being in office," 
going back to the company's participation in breast cancer awareness 
campaigns she organized.

Executives at Southern California Edison, where Peevey was president 
until 1993, have also helped Liu's campaign. Executives at the 
electricity company and its parent corporation, along with one of their 
wives, have given Liu $10,950.

Attorneys and law firms that appear before the PUC have given Liu 
$18,458. Some, such as the Los Angeles firm of Nossaman, Guthner, Knox 
and Elliott, which gave Liu $4,600, have practice areas devoted to 
public utility regulation. According to the firm's website, its clients 
include AT&T Wireless, MCI Communications, Woodside Natural Gas and
Sprint.

A San Francisco firm, Hallisey and Johnson, that has represented
Calpine and the Hopi Indian tribe before the PUC, donated $1,000 to Liu
and spent $1,258 throwing a fundraiser for her in June, records show.

Firm partner Jeremiah Hallisey said he has been "personal friends of
her and Mike for 30 years." He said Liu has "been a good friend of
higher education," and the fundraiser was one of hundreds he has given
for politicians.

Liu is running for the 21st Senate District seat being vacated by Jack 
Scott of Altadena. It is considered a safe Democratic seat, so the 
contest will probably be decided in the June statewide primary.

Several politicians, including Dario Frommer, a former Assembly
majority leader, are considering entering the race, but Liu is the only
one so far to declare her candidacy. She has raised $346,433 and put
$105,000 of her own money into her campaign account.

Peevey said he stays clear of his wife's fundraising and said that many 
of the utility donors to Liu routinely give to politicians. He said he 
has had a "negative influence" on her fundraising because she has 
refused to take money from energy political action committees to avoid 
the appearance of a conflict of interest.

"If we really wanted to raise the money, don't you think she would have 
more?" he said. "My god, man, think it through."

He challenged The Times to compare Liu's utility donations now with 
what she received before he joined the PUC.

A review of Liu's campaign records in 2000 shows that about 10% of her 
donations came from utility interests -- less than half the proportion 
that make up her Senate fund.