Wednesday, April 29, 2015




          There is absolutely no doubt about a few facts surrounding the gasoline price surge Californians experienced in late winter and early spring.

          In March, California prices averaged 84 cents per gallon higher than the national average of $2.54 per gallon, rising to $3.38 after a wintertime dip.

          That meant Californians spent $34 million per day more for their gas that month than they would have in most other places. For the month of March, the extra tab came to more than $1 billion from California pocketbooks, or an average of $43 per driver. No one yet knows how much extra the similar price spike of late April has cost.

          There is some disagreement over why things occurred as they did late last winter. Oil companies maintain their usual springtime refinery maintenance and the shift from winter to summer fuel formulas was a prime part of the cost. They also argue that California gasoline taxes are higher than those elsewhere.

          These are certainly factors, but they don’t come near to accounting for the difference between California prices and those in the rest of the Lower 48 states (prices on the U.S. mainland should never be compared with costs in Hawaii and Alaska, where distance from refineries raises prices greatly).

          Gas taxes account for less than one-fourth of the price differential, or about 15 cents per gallon higher than elsewhere, according to UC Berkeley’s Haas School of Business. The changeover in fuel composition can also account for a little, perhaps as much as another 10 percent of the differential. That leaves oil companies to answer for about 70 percent of the price difference, about $1.4 billion out of the $2 billion additional that Californians paid for gasoline between Jan. 15 and April 1.

          The Consumer Watchdog advocacy group, most often associated with its longtime effort to keep insurance prices down, says the price differential has a lot to do with supply and demand. The group singles out steadily low gasoline inventories kept on hand by oil companies as a major factor.

          “These companies keep California running on empty so that when a refinery goes down, gasoline prices go way up,” says Jamie Court, Consumer Watchdog president. “With crude oil prices at historic lows and national gasoline prices stable, California oil refiners need to answer for the $1 billion extra they charged in March. The Legislature should demand the companies explain their billion-dollar bonanza.”

          For sure, refiners keep California inventories low, with only about a 10.7-day supply on hand at most times, according to a seven-page report produced by Consumer Watchdog. The average inventory in the rest of the nation would last about 18 days.

          Which means that when refineries shut down, as Tesoro’s Martinez facility did in February and Exxon’s Torrance plant did soon after, panic can set in, with gouging one result.

          Domination of the California market by just two companies – between them, Chevron and Tesoro (often marketed under the Shell emblem) control 55 percent of the state’s gasoline market – also contributes. Altogether, four companies provide 76 percent of California gasoline. That consolidation is the main reason the number of refineries in this state dropped from 30 to 11 over the last 33 years. It is probably no coincidence that prices at stations like Flying J and Pilot, run by an “outsider” company – often run well below those at the major brands.

          These facts this spring led Tom Steyer, a financier, venture capitalist and environmental activist considering a 2018 run for governor, to suggest state lawmakers demand answers to questions like these two: 1) Why do refiners keep so much less gasoline on hand here than in the rest of America? And 2) Why don’t refineries that do not close step up production when it becomes clear supplies are dropping?

          Another question he might have added: Why should oil companies not be prosecuted for gouging when fully 34 percent of what they charged in March (according to the California Energy Commission) went for refinery costs and profits?

          If state lawmakers don’t demand answers to these questions and more, they will be derelict in their duty and provide oil companies an open invitation to gouge Californians even more the next time there’s any problem at one of the few remaining refineries.

    Email Thomas Elias at His book, "The Burzynski Breakthrough, The Most Promising Cancer Treatment and the Government’s Campaign to Squelch It," is now available in a soft cover fourth edition. For more Elias columns, visit




          Only minutes after an announcement that the California Public Utilities Commission would fine the state’s largest utility company $1.6 billion for violating state and federal gas pipeline safety standards, Pacific Gas & Electric Co. said it would not appeal the decision.

          But PG&E never said why it’s happy to accept the largest penalty ever assessed by regulators against an American utility company.

          Maybe it was because the fine in reality is not quite half as large as it looks, in fact mostly a cosmetic move by a regulatory commission desperate to restore its image after many months of scandal, with at least two criminal investigations in process.

          This so-called fine fits with what industrialist and philanthropist Andrew Carnegie observed early in the last century: “As I grow older, I pay less attention to what men say. I just watch what they do.”

    Here’s why this fine is less than half as large as it looks:

    The “penalty” is split into four parts: $400 million to be refunded to customers, $300 million going into the state’s general fund and $50 million to pay for a variety of PUC safety activities. But more than 53 percent of the money – $850 million – will be spent to repair and improve PG&E’s gas transmission system.

    Huh? How is it a fine when PG&E spends money on needed pipeline maintenance and improvements? Remember, for more than six decades, the company has collected payments monthly from each of its natural gas customers to maintain pipeline safety.

    The total comes to billions of dollars; no one knows just how many billions. Because the utilities commission did not track how this money was used until after the fatal 2010 San Bruno pipeline explosion, no one knows how much was actually spent to fix or replace pipelines.

          But the PUC did find recently that PG&E used at least some maintenance money for executive salaries and bonuses. Commissioners did not respond when asked why the $850 million in pipeline repairs should be considered a penalty rather than a business expense.

          So, as Carnegie suggested long ago, watch what the PUC does, not what it says. Each one of the corrupt-seeming rulings for which it is now being investigated by the FBI and the state attorney general’s office was couched in terms at least as pious as the announced “fine” of PG&E.

          One example of the PUC misleading utility customers: The commission said last fall that it painstakingly reached a “compromise” settlement in which customers of Southern California Edison and San Diego Gas & Electric Co. will pay $3.3 billion – more than two-thirds of the cost – for retiring the San Onofre Nuclear Generating Station, even though the retirement was caused by Edison decisions the company knew in advance were flawed.

          But customers had been dunned monthly for the eventual retirement of SONGS since the early 1970s, and documents seized from the home of former PUC President Michael Peevey show he arranged the essence of the settlement with an Edison executive during a junket to Poland about one year before the settlement was announced last fall.

          The PG&E fine is equally misleading, even though it was accompanied by an announcement from current President Michael Picker that he’s ordering an investigation into whether PG&E “is simply too large…to succeed at safety.”

          The bottom line here is that PG&E collected many billions over many years for maintaining its pipelines, but federal investigators found after San Bruno that the company was criminally negligent in its maintenance practices – and that the PUC did not police it adequately. At least some of the money went to corporate executives and the fate of the rest is unknown.

          So PG&E now has to spend money to fix or renew its pipeline system, really an ordinary cost of doing business, one for which its customers paid long ago. How is this a fine?

          The answer is that it’s not, or the PUC would answer questions about it. Rather, this “fine” is a public relations ploy. Which emphasizes that in dealing with the PUC and PG&E, it’s wise to bear in mind what 1970s-era Manager Billy Martin said of baseball Hall of Famer Reggie Jackson and New York Yankees owner George Steinbrenner: “One’s a born liar and the other’s been (indicted).”


    Email Thomas Elias at His book, "The Burzynski Breakthrough: The Most Promising Cancer Treatment and the Government’s Campaign to Squelch It," is now available in a soft cover fourth edition. For more Elias columns, visit

Tuesday, April 21, 2015




          No sooner had Oregon’s Democratic Gov. Kate Brown signed a new law automatically making a registered voter of every person who applies for or renews a drivers license in her state than California’s top elections official jumped on the idea.

          Alex Padilla, the MIT engineering graduate who once was the Los Angeles city council’s youngest president ever, was up-front about copying Oregon. “While many states are making it more difficult for citizens to vote, our neighbor to the north offers a better path,” Padilla, the California secretary of state, said in a press release days after the Oregon law was signed. “I believe the Oregon model makes sense for California.”

          The Oregon law is a significant new twist on the federal “Motor Voter” law in use since 1993. The national law requires all states to offer voter registration opportunities at all Department of Motor Vehicles offices, plus every welfare office and those that deal with the disabled.

          But the law is not usually enforced. Example: Most California DMV offices may offer voter registration on request, but they don’t normally inform everyone they serve of this, nor are voter registration materials included in most DMV renewal mailings.

          This would be rectified in a California version of the Oregon law, which now takes the form of a bill by Democratic Assemblywoman Lorena Gonzalez of San Diego.

          The Oregon measure will not merely consider every U.S. citizen over 18 who contacts that state’s DMV a registered voter, but will automatically send ballots to all of them in every election.

          That’s not precisely the model to be followed here. For one thing, Oregon in recent years has conducted many of its elections purely by mail, while only about half California's voters participate by mail.

          So all the California law would do is add eligible new voters to the rolls. This would see them receiving by mail all voter guides on initiatives and candidates, but no absentee ballots unless they’re requested.

          The motives for this change are clear, as are some problems. The California move is spurred in part by pathetic turnouts in municipal elections across the state early this spring. In Los Angeles, for example, less than 10 percent of eligible voters participated. Some city council members, then, were elected by just 4 percent or 5 percent of eligible voters in their districts. So increased voter participation is one motive for this change.

          There’s also the fact that everyone involved with this proposed change is a Democrat, and increased turnout historically tends to favor Democrats. New voters, minority group members and youths tend to turn out less than Anglos over 50, who historically are more likely to support Republicans. So there’s a political motive in addition to the good-government one.

          Then there are the potential problems: It’s still illegal for non-citizens to vote in California elections, whether they involve local, state or federal offices and issues. Yes, there have been proposals to allow non-citizens to participate in local elections affecting their interests. But that idea has never taken hold, and there’s little likelihood it will anytime soon.

          Another potential problem is how the DMV can know whether a drivers license applicant is a citizen. Critics of Motor Voter have long complained that it can let non-citizens onto the voters’ rolls. But the agency will take only birth certificates, passports, drivers licenses from other states and similar official documents as its required proof of identity. So unless an applicant obtains a highly credible forgery, the DMV will be able to screen non-citizens out of voter registration.

    Another problem is that some eligible voters never register because they don’t want their addresses, birth dates or party affiliations made available to the public. Others don’t want to be called for jury duty, for which voter registration records are used.

          That’s a tougher problem, yet could be resolved by changing some rules about disclosure of personal information on registered voters.

          But the bottom line will likely be that this bill, or a modified version, will pass because something has to be done to increase voter turnouts. If this can’t do that, it’s hard to see what might.

     Email Thomas Elias at His book, "The Burzynski Breakthrough: The Most Promising Cancer Treatment and the Government’s Campaign to Squelch It," is now available in a soft cover fourth edition. For more Elias columns, go to




          Rarely has a new law been so urgently and obviously needed as the broad children’s vaccination requirement now being carried by the state Legislature’s only medical doctor, Democratic state Sen. Richard Pan of Sacramento.

          While the measure has encountered resistance in the Legislature and even death threats to Pan, there is no factual basis for that vehement opposition, while increasing numbers of young parents are creating demand for it.

          One is Madeleine Kauffman (a fictitious name for a real person), mother of four and herself a doctor. She spoke the other day in San Francisco about why this tough law is needed. “Normally, I would take all my kids back East to visit my parents over Spring Break,” she said during a dinner party. “But my youngest is just 2 months old and with the measles outbreak, I couldn’t see doing that. So I’m here.”

          She is not alone. Many conversations with young mothers confirm a widespread fear, thousands of infants now being kept in homes all around California and not taken out because of concerns over the dozens of measles cases that broke out when the illness spread from one unvaccinated child at Disneyland.

          “There is strong evidence that lower vaccination rates are the reason for outbreaks of measles this year and for outbreaks of pertussis (whooping cough) in 2010 and 2013,” said Pan, a practicing pediatrician.

          He’s not backing down in the face of the death threats.

    While an assemblyman in 2012, Pan sponsored another bill aiming to make it harder for parents to evade getting their children vaccinated before enrolling them in public schools. Each parent declining vaccination, that law says, must present written evidence of speaking with a health professional before declining vaccinations for a child.

          But when Gov. Jerry Brown signed that bill, he attached a message asking state officials to create a new form allowing parents to check off a box saying – without any proof – that vaccinations run contrary to their religious belief. Never mind that no organized religion disapproves vaccinations, which have all but ended onetime scourges like measles, mumps, rubella and polio.

          No link between that form and lower vaccination rates – surveys have found as many as 38 percent of children are unvaccinated in some nursery schools in Los Angeles and the San Francisco Bay area – has yet been firmly established. And Pan reports that under his previous bill, the non-vaccination rate has dropped 20 percent statewide.

          But the outbreaks make it clear that more is needed, and Pan’s new law – backed by the California State PTA – would remove all exemptions from vaccination for public school children other than medical necessity. Children with problems like allergies or immune suppression would remain exempt under this new proposed law, known as SB 277.

    For sure, anti-vaxxers declaiming their right to freedom are in fact denying liberty to many thousands of children either too young or too allergic to be vaccinated.

          “This may be a sensitive issue for some,” said state PTA president Colleen A.R. You. “However…the vaccines in use today are extremely safe and effective.”

          Pan notes that even his new law is not a universal requirement for vaccination. “But if you don’t vaccinate your child, you must take responsibility,” he said in an interview. “If you’re not getting your kids vaccinated, you can still home school them, but you won’t be putting them in with kids that are not getting vaccinated due to genuine medical necessity.”

          Pan says one reason for resistance to vaccination is that many
parents have never seen the diseases involved and so don’t consider them deadly. “Also,” he said, “there’s misinformation that hypes discredited myths about things like a link between vaccination and autism. The only study that claimed this turned out to involve just 12 children and its methodology was extremely flawed. That idea is just plain wrong and invalid.”

          Pan doesn’t worry that Brown might veto his new bill, which would eliminate the governor’s “check this box” exemption allowing lazy parents to lie about religious beliefs.

          “I’m sure I will sit down and talk with the governor about this,” he said. “We will work with him.”

          The bottom line is that recent medical history demonstrates few new laws have ever been more needed than this one. Brown rarely reveals in advance how he will act on any bill, but it would be a dangerous travesty if he didn’t sign this bill and reverse his earlier miscue.


    Email Thomas Elias at His book, "The Burzynski Breakthrough: The Most Promising Cancer Treatment and the Government’s Campaign to Squelch It," is now available in a soft cover fourth edition. For more Elias columns, visit

Wednesday, April 15, 2015




          The drumbeat from Republican politicians, governors of states like Texas and Florida and from independent relocation consultants seems constant: California’s business climate stinks; high taxes and heavy regulation are driving businesses and jobs out of this state.

          These folks note that companies big and small, from Toyota and Nissan to Buck Knives, have announced they are moving corporate offices out of California to low-tax, low-regulation, low-wage states.

          They also harp on the fact that more Californians move to other states than residents of other states move here, a phenomenon that’s far weaker now than at the height of the recession five years ago.

          All this, they say, adds up to a lousy business climate, one which cries out for less regulation, lower corporate and capital gain taxes and a laissez faire attitude toward virtually anything business wants to do, a la Texas. In fact, the business-funded Tax Foundation ranks this state’s tax structure the third worst for business and its regulatory environment eighth worst.

          But wait. At the same time that California was allegedly losing jobs, unemployment declined from a peak of 12.4 percent four years ago to 6.8 percent this spring, the biggest reduction of any state. California also produced more new jobs in that time than any other state, by far.

          In fact, reports Bloomberg News, one major barometer of business health that is purely market driven and rarely subject to influence peddling says California is far and away the best state for business. Better – and bigger – than almost all countries.

          That barometer is the stock market. It turns out that while the folks Gov. Jerry Brown likes to call “declinists” have steadily bemoaned California’s alleged plight, stock traders moved by the profit motive and not by propaganda were saying it’s just not so.

     The 63 companies in the Standard & Poors 500 index headquartered in California produced the best returns of the five states with the largest populations. Since the beginning of 2011, those companies produced a 134 percent return on investments, more than doubling in book value. The closest big-state challenger to that remarkable performance was Florida, where S&P companies had an 82 percent return. Texas companies gave investors a mere 52 percent return on investment. Not bad, but not nearly up to California’s performance.

          The California companies posting this performance are in fields from health care to biotech, energy to electronics. Companies making consumer staples, including agriculture, were among the healthiest, seeing the value of their stocks triple over the last four years, Bloomberg said.

          Their promise for the future is best, too, because California companies spent far more than firms in other places on research and development – betting on their futures. Of the 122 outfits in Bloomberg’s America’s Clean Technology Index, 26 are in California, more than 20 percent. They spent an average of $118 million, or one-fourth of their sales, on R&D, compared with an average of 9.4 percent for companies elsewhere.

          While all this was going on, California was climbing back into seventh place among all countries, with only six nations – one of them comprising the rest of America – boasting higher gross national products. That means the state, ranked as high as sixth before the rise of China, has surpassed the huge production of Brazil.

          And 33 California companies are among the 500 largest in the world. Meanwhile, of the 123 Americans among the world’s 400 richest people, 28 live in California, meaning high taxes are no deterrent to the super rich – perhaps because many of them manage to evade most of those levies.

          And what about the fact that six Californians leave the state for every five who move here? It turns out, reports the real estate website Trulia, that has more to do with housing prices than anything else.

          Stock market and job growth has helped drive California prices ever higher, with a family income of about $140,000 needed to support buying the median San Francisco Bay area home, and $89,000 needed in the Los Angeles area. With home prices exponentially lower elsewhere, it’s no wonder some homeowners choose to cash out at the same time California’s wealthy, newcomers and long-timers alike, keep driving prices up in many places.

          Put it all together, and things are far from perfect, but the picture is a whole lot brighter than what’s painted by politicians who so often try to win votes by putting California down.

    Elias is author of the current book “The Burzynski Breakthrough: The Most Promising Cancer Treatment and the Government's Campaign to Squelch It,” now available in an updated third edition. His email address is




          There is both sense and nonsense in the $1 billion drought relief package announced by Gov. Jerry Brown in a parched Sierra Nevada Mountains meadow that usually is covered in deep snow on the date Brown walked through it.

          But the rationale behind the single largest part of the package is fundamentally contradictory.

          Brown says California must ready for new and lasting, drier realities, then bases the most expensive part of his plan on weather patterns he previously said are most likely things of the past.

          Authorized spending on all this now comes to $1.7 billion, including almost $700 million Brown proposed and the Legislature approved last year, most of it not yet spent.

          It certainly makes sense to assist the most drought-stricken communities, as the package does with more than $14 million to better purify existing but polluted groundwater supplies and to truck water into those areas. No one complains, also, about more than $40 million for food and other relief for citizens and cities with lost jobs and tax revenues because local farms have fallowed many thousands of their acres.

          There’s also no quarrel with the plan’s spending more than $10 million to make some existing irrigation systems more efficient. Nor with putting more than $500 million into improved capture of storm water and expanded use of recycled, purified “gray” water for irrigation and landscaping.

          But Brown has taken heat over the fact that his emergency rationing plan does not force farms to cut use of surface water or lower pumping of ground water. Leaving farmers’ ground water out of the order, of course, exposes the weakness of the ballyhooed underground water regulations Brown signed into law last year – a law that will lack teeth for more than 10 years.

          This all leaves plenty to question. One big question is why the plan includes only about $270 million – just over 15 percent of the package funding – for helping develop new sources of fresh water, including innovative desalination methods other than the hyper-expensive and power-sucking reverse osmosis technique now in use in a few places. Brown has not yet spoken about that.

          But he has talked about why he included $660 million for new flood control projects – essentially building dams and reservoirs and lining some streams with concrete, a la the Los Angeles and Santa Ana rivers, where activists regularly push to remove concrete and return streams to their natural state.

          The governor cited the danger of “extreme weather events,” caused by climate change, even though the only changes so far in California’s weather from global warming have been extended dry periods. “All of a sudden, when you’re all focused on drought, you can get massive storms that flood through these channels and overflow and cause havoc,” he said during a news conference.

          But the state already has an extensive system of flood control channels and huge reservoirs designed to capture and control flood waters. Existing reservoirs are so low now there is little imminent danger they will overflow in the foreseeable future. So why not spend the money earmarked for flood control on building innovative new desalination plants, a tactic that would leave California far better off in future droughts?

          Essentially, Brown and the Legislature are focusing on old technology to solve new problems, a criticism also leveled at them over the high speed rail project, which will use 1970s-era technology rather than exploring newer ideas like magnetic levitation and the “hyperloop” suggested by Tesla Motors founder Elon Musk.

          But Brown insists that “History shows us that every time California comes out of one of these droughts, it’s with a boom-and-bust cycle of rain.” This is the same man who likes to preach that times have changed and so has nature. It has been more than 40 years since any part of the state experienced 30 days of steady rains, the sort of phenomenon that might justify massive new reservoirs.

          If the current measures are a way to justify shoring up levees in the Sacramento-San Joaquin Delta area, fine, but say so. Don’t sell them as something quite different.

          All of which means that as with most government spending and projects, there’s a lot to like in the governor’s measures – but also a lot that needs a harder, more critical look than the Legislature gave it while rubber-stamping the entire package.

Elias is author of the current book “The Burzynski Breakthrough: The Most Promising Cancer Treatment and the Government's Campaign to Squelch It,” now available in an updated third edition. His email address is 

Wednesday, April 8, 2015




          It was no surprise when Proposition 83, the so-called Jessica’s Law, passed in 2006 with better than a 2-1 majority. The issue, as stated in the ballot summary, was where convicted sex offenders should be allowed to live, no matter how long ago their offenses. The plain wish of the vast majority of voters is that these people become pariahs for life, unable to live anywhere near any potential victims.

    Nobody likes sexual predators, especially violent ones, nor should they. But lawyers for some of them argue that once they’ve served their time and once corrections authorities rule they’ve been rehabilitated as well as possible, they’ve got to live somewhere. And the reality is that Proposition 83 allows them almost noplace to live in any city or town.

    That’s what voters wanted, of course. No one wants a predator living nearby, and many parents have felt more comfortable since Proposition 83 passed.

    As written, this law prohibits all registered sex offenders from residing within 2,000 feet of any school or park. The law also mandates far longer prison terms than before and allows the state Department of Mental Health to keep offenders in custody indefinitely after their prison terms are up, if psychiatrists determine they’re still dangerous. After release, the measure puts tracking devices on all of them for life.

    No one is seriously challenging many of these provisions, which expand on the severe restrictions previously placed on violent rapists and child molesters. The challenges have come to the residential limits.

          On its surface, this proposition was a no-brainer, a gut reaction against a few crimes committed by paroled offenders who were not being thoroughly monitored. Pre-existing rules even contained a tougher residential restriction than the initiative’s 2,000-foot limit for some offenders, not allowing predators judged to be high risks to live within 2,640 feet of parks and schools.

          But by voting as they did, Californians said they don’t fully trust the judgment of mental health professionals; they said no one can ever be sure a onetime offender might not again act out an impulse. Previous law took essentially the same point of view, having long required released sex offenders to register with authorities even decades after their crimes.

    The legal problem comes in restricting where long-ago offenders can live, even after they are judged no longer a serious risk to anyone. This spring, the state Supreme Court in a ruling on a San Diego case, written by conservative retired justice Marvin Baxter, said the restrictions are too tough. Those rules raised the rate of homelessness among the state’s 8,000-plus registered sex offenders by a factor of 24, also hindering their access to medical care and drug and alcohol dependency programs.

    While the beatdown of Proposition 83 residency rules applied at first only to San Diego County, it has already been made general by a state order lifting the distance restriction on offenders whose crimes didn’t involve children.

    The state high court’s decision was presaged years earlier by a federal judge in San Francisco, who said the day after the initiative passed that there was “a substantial likelihood” the law is unconstitutional, changing conditions of parole for persons convicted and released long before it passed.

          That ruling came in a case where a former offender, identified only as John Doe, claimed Jessica’s Law would force him to leave a community where he lived peacefully for more than 20 years.

          That’s just what Republican legislator Susan Runner, from the high desert region of Los Angeles County, wanted to do when she sponsored Proposition 83 and it’s what voters wanted, too. They simply don’t trust prior offenders to remain impulse-resistant forever, and so they want even long-ago sex offenders with solid records since their release far from any proximity to children.

          The last time voters felt as strongly about an initiative was in the mid-1990s, when a huge majority passed Proposition 187 in an effort to cut off health, education and all other public services to illegal immigrants. A federal judge struck down most of that one quickly.

    No one seriously expects the surveillance and sentencing aspects of Proposition 83 to suffer a similar fate. But voters can be excused if they feel frustrated by a court waiting almost nine years to strike down a much of a law they passed, one that provided peace of mind to many.

    Email Thomas Elias at His book, "The Burzynski Breakthrough: The Most Promising Cancer Treatment and the Government’s Campaign to Squelch It," is now available in a soft cover fourth edition. For more Elias columns, visit




          The strong odor surrounding California’s most powerful regulatory commission this spring stems not only from corrupt-seeming decisions but also from fear. Fear that past and present members or top staffers of the state Public Utilities Commission might do jail time. Fear they could see personal fortunes decimated by legal fees while fending off state and federal criminal investigations.

          How bad have things become at the PUC, which sets prices for privately-owned utilities like Pacific Gas & Electric, Southern California Edison and San Diego Gas & Electric?

          Even the commission’s new president, Michael Picker, said the other day that when it comes to cleaning up his agency, “I think we have a long way to go.” Of course, over the last 17 months, he backed every questionable decision pushed by disgraced former PUC President Michael Peevey.

          Like many outfits overcome by fear, the PUC has lately tried to cover up by claiming internal documents are “privileged” and by hiring top defense attorneys. The commission’s first contract with the SheppardMullin law firm was for $49,000, work to be done at a “discount” rate of $882 per hour. That deal fell just below the $50,000 level where state contracts for outside work must be approved by the Department of General Services.

          But the Picker-led PUC has followed up by awarding SheppardMullin a contract for $5.2 million for the rest of this year. Both agreements may be illegal, even if the new one is approved by the DGS.

    Still, there is little doubt of that approval. All present PUC members were appointed by Gov. Jerry Brown, who also named all top officials of the DGS, so this is really the right hand approving what the left hand wants. What’s more, Brown’s chief of staff, Nancy McFadden, was PG&E’s chief lobbyist in Sacramento before joining him.

          Asked under what authority it hired SheppardMullin, the PUC cited state government code section 995.8. That section says a public entity can only hire criminal lawyers to defend present or former officials if “The public entity determines that such defense would be in the best interests of the public entity…” The PUC would have to hold hearings to make such a circular determination, but it has not.

          This makes the big-buck pacts appear illegal, no matter what the DGS might rule.

          The obvious question here is why state taxpayers should fund the defense of officials who may have conspired with big utilities to bilk them via decisions like the one forcing consumers to pay most costs for retiring the San Onofre Nuclear Generating Station.

          Commission spokeswoman Terrie Prosper claims outside lawyers are needed because the PUC “does not have the expertise…or time to handle…the massive amount of work that needs to be done to…manage and cooperate with investigations.”

          The SheppardMullin contract suggests that “managing investigations” includes stonewalling requests for documents while “assisting in public relations.” It says attorneys will also “develop and manage litigation strategies” and “assist and attend interviews of commission employees by investigators (including preparing witnesses).”

          “This means the $5.2 million is for a cover-up,” says former San Diego City Attorney Michael Aguirre, who has sued to block the contracts. “They will restrain and restrict documents and the testimony of witnesses and use privilege to (try to) conceal crimes.”

          Aguirre notes the commission never formally voted to spend the money, but PUC Executive Director Timothy Sullivan simply signed the new contract. Because the PUC itself cannot be indicted, it’s clear the money will be spent to help defend individuals – present or former commission officials.

    Neither Sullivan nor any other PUC official responds to repeated inquiries about who SheppardMullin will defend. Nor would the PUC say why those officials should not fund their own defenses.

          Aguirre suggests that if Picker really favors transparency, as he often claims, he would waive all privilege and open every commission document to press, public and investigators, saving the $5.2 million in legal fees.

          But Picker repeatedly refuses to be interviewed and by the end of March, the commission had spent more than $2 million on outside lawyers to deny document requests during the last six months, all without a hearing.

          So the smell of fear is plain at the PUC, and no one can predict the next major errors and cover-up attempts that might produce.

    Email Thomas Elias at His book, "The Burzynski Breakthrough: The Most Promising Cancer Treatment and the Government’s Campaign to Squelch It," is now available in a soft cover fourth edition. For more Elias columns, visit