TIME TO STOP THE WORSENING REVOLVING DOOR

 

CALIFORNIA FOCUS
FOR RELEASE: FRIDAY, FEBRUARY 11, 2022, OR THEREAFTER

BY THOMAS D. ELIAS
     “TIME TO STOP THE WORSENING REVOLVING DOOR”

 

        The federal government has rules designed to put a crimp in the revolving door phenomenon that sees former government regulators often take high-paying jobs in industries whose profits and incomes they once influenced.

 

        Many agencies – like the Food and Drug Administration and the Federal Energy Commission, to name just two – enforce five-year waiting periods before onetime officials can take high-paying jobs with companies they formerly regulated.

 

        That’s to protect consumers from so-called “regulatory drift,” where political appointees know as they make key decisions that high-paying industry jobs will soon be theirs for the taking so long as they vote the “right way.”

 

        Things are very different in California, where members of boards like the Public Utilities Commission (PUC) and the Air Resources Board often exert more power over big companies than their federal counterparts. They make billion-dollar decisions affecting millions of people who buy products like cars, natural gas, telephones and electricity.

 

        One recent example of the revolving door came when former PUC member Carla Peterman’s term expired in 2018 and she took a high-paying job as a Southern California Edison Co. vice president. This, after spending six years helping determine the electric firm’s rates, profits and the penalties it paid for fires it helped start. A couple of years later, she moved to Pacific Gas & Electric in an even higher salaried job.

 

        She was far from the first commissioner to make such a shift. As far back as the 1970s, onetime PUC President John Bryson moved to Edison after his term expired, making exponentially more money after becoming the company CEO. Bryson eventually became ex-President Barack Obama’s commerce secretary.

 

        The revolving door can move in the other direction, too, as when the former top Edison executive Michael Peevey became PUC president under ex-Govs. Arnold Schwarzenegger and Jerry Brown. Peevey presided over several scandalous decisions favoring his former employer, including the 2014 ripoff of Edison and San Diego Gas & Electric customers after the San Onofre Nuclear Generating Station had to close because of an Edison blunder. That decision – foisting most of the closing costs onto consumers – was so bad it was later rewritten to give customers a better deal.

 

        Now comes a different form of the revolving door. This time, it involves a state legislator. Lorena Gonalez, the recently-resigned Democratic assemblywoman from San Diego, left her $114,000-a-year post to become head of the California Labor Federation, with a pay increase of at least $49,000.

 

        Gonzalez spent her entire eight-plus years in the Legislature carrying water for organized labor. She authored the ill-fated 2019 law known as AB 5 that aimed to force rideshare drivers for companies like Uber and Lyft into unions. That law had the side effect of wrecking the careers of thousands of other contract workers who never wanted to become regular employees and lost their freelance gigs.

 

        As chair of the Assembly Appropriations Committee, Gonzalez shaped scores of other decisions favoring the interests of big labor over employers of all kinds and sizes.

 

        Now she’s made it official. Gonzalez, once a labor leader in San Diego County, would have been termed out in just under four years. Now she’ll have no time limit or term limit. There will be no more potential conflicts of interest, as she will openly advocate for the 1,200 unions in the labor federation.

 

        The question raised by all this is the same one that led to the federal waiting periods (which do not apply to members of Congress who often morph into big-money lobbyists). Do regulators and in some cases legislators make decisions based on what’s good for the public or are they really working all along for organizations and interests where they know high-paying jobs await them?

 

        Because such arrangements are always made confidentially, the public has no way to know which regulators are responding to future payoffs and which are honest. This gives all government regulators a bad name.

 

        What’s very clear is that at the very least, California needs waiting periods that approximate what the federal government imposes on its former officials. And any new rules should apply not merely to appointed commissioners, but to ex-legislators as well.

       

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     Email Thomas Elias at tdelias@aol.com. 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 www.californiafocus.net