State ethics panel is looking into whether Nancy McFadden failed to report the sale of stock in PG&E.
The state's ethics watchdog agency has opened an investigation into whether Nancy McFadden, a top aide to Gov. Jerry Brown, failed to properly report the sale of stock in Pacific Gas & Electric Co., where she worked before joining the administration, officials said Thursday.
But the state Fair Political Practices Commission said that there was "insufficient evidence" in a formal complaint filed by activist group Consumer Watchdog about a "possible conflict of interest" involving McFadden and that it would not pursue an investigation into the allegations.
The complaint alleges that emails from a lobbyist at the state Public Utilities Commission indicate McFadden, the governor's executive secretary, influenced appointments to the panel while she owned up to $1 million in stock options at PG&E, a utility regulated by the PUC.
The governor's office has denied the allegations.
McFadden initially filed required disclosure statements listing the value of her stock options as having dropped to $100,000 or less a year later, but did not fill out a portion of the form providing the date when the stock was sold. She also did not report income from the sale of the stock.
A letter sent Thursday to Consumer Watchdog from Galena West, chief of enforcement for the FPPC, said the agency "has initiated an investigation into the apparent failure of Ms. McFadden to disclose required information about the status of her stock ownership."
Evan Westrup, a spokesman for the governor, said additional disclosure has been provided to the FPPC.
"It's not surprising that the FPPC found these conflict-of-interest allegations totally baseless and will not pursue an investigation," Westrup said. "We have already acknowledged inadvertent filing errors, and amended Form 700s have already been refiled with the FPPC to clear this up."
Documents released by Westrup indicate McFadden sold stock options worth between $100,001 and $1 million on Jan. 3, 2012, and March 9, 2013.
Westrup also reported that McFadden was made aware last June that she had other PG&E stock options at that time, and she immediately ordered them to be sold and reported.
Jamie Court, president of Consumer Watchdog, said pinning down the sale date of the stock could help determine whether McFadden had a conflict of interest.
"It's significant that the top aide to the governor is going to be investigated about the timing of the sale of stock," Court said.
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