Homestoryconflict of interest › Jerry Brown Aide Had Interest In Siding With PG&E, Group Says

News Story

Jerry Brown Aide Had Interest In Siding With PG&E, Group Says

SAN FRANCISCO CHRONICLE
http://www.sfgate.com/news/article/Jerry-Brown-aide-had-interest-in-siding-with-6892181.php

SACRAMENTO — A consumer group has filed a complaint asserting that a top aide to Gov. Jerry Brown had a financial interest in helping her former employer Pacific Gas and Electric Co. lobby for friendly appointees to the California Public Utilities Commission and influencing legislation that would benefit the firm.

In its complaint, the group Consumer Watchdog asked the state Fair Political Practices Commission to investigate whether Brown’s executive secretary for legislation, appointments and policy, Nancy McFadden, had a conflict of interest when the governor hired her in 2011.

The group contends McFadden had a conflict because she promised not to disparage PG&E as part of a $1 million severance deal with the company, where she was senior vice president from 2005 to 2010. She also held PG&E stock at the time Brown hired her, Consumer Watchdog says.

McFadden reported owning between $100,000 and $1 million in PG&E stock during her first two years in the governor’s office. She sold the stock sometime in 2012, according to financial disclosure forms.

Jamie Court, president of Consumer Watchdog, said McFadden was brought into the governor’s office at a pivotal time — in the aftermath of the deadly San Bruno blast in 2010 and as three openings on the five-member utilities commission awaited Brown’s appointments. At the time, the state Legislature was also pursuing several bills aimed at increasing pipeline safety.

“There is not only no evidence she recused herself, but there are people in the Capitol who say she was an active player on utility legislation related to PG&E,” Court said.

Court declined to say who those people were, saying they asked to remain anonymous so they would not face retribution.

Brown spokesman Evan Westrup said Consumer Watchdog’s complaint, filed Friday, “is riddled with inaccuracies and has no merit.”

Jay Wierenga, a spokesman for the Fair Political Practices Commission, said it typically takes a few days to a few weeks for the agency to determine whether to open an investigation.

Consumer Watchdog used 65,000 emails released in response to a court case filed by the city of San Bruno to point to McFadden’s alleged conflicts. The group says McFadden was the conduit for introducing Brown to PG&E’s preferred candidate for a vacant commissioner job at the utilities commission.

Soon after McFadden’s appointment in January 2011, Brown appointed two commissioners whom consumer advocates praised. PG&E executives were alarmed that a third pro-consumer appointee would tip the balance of power on the panel against PG&E’s interests, according to emails written by Brian Cherry, a since-fired PG&E vice president whose main job was to lobby state regulators.

In one exchange, then-commission President Michael Peevey sent an email to Cherry urging him to share with McFadden a financial analyst’s views that the San Bruno case was hurting PG&E’s stock. At the time, McFadden owned stock in the company.

“As I suggested before, this info should go to the governor’s office, probably best to Nancy McF,” Peevey wrote to Cherry. “Jerry has to be made aware that actions have consequences and the economy is best off with a stable utility sector.”

The appointment ultimately went to Mark Ferron, a former bank executive and senior partner at the Silicon Valley Venture Fund. His appointment boosted PG&E’s stock value, Consumer Watchdog noted.

In one email, Cherry told Peevey: “Nancy asks if you have any names you would recommend. You can call her directly if you’d like.”

Westrup said in a statement that “folks inflate their influence on and access to this office every day of the year in this town — and this individual is no different.”

Melody Gutierrez is a San Francisco Chronicle staff writer. Email: mgutierrez@sfchronicle.com. Twitter: @MelodyGutierrez