The Whistleblower #18
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The Whistleblower

The Whistleblower #18 - Apr 15, 2002

FTCR to Cal. PUC: Don't Break the Law. In a petition filed in the California Supreme Court last Thursday, FTCR asked the court to bar the state Public Utilities Commission from breaking the law. That's what it has come down to in these days of closed-door decision making and illegal bailouts. After the secret and illicit bailout the PUC handed Southern Cal. Edison last fall, we fear that the agencies' predilection to flout state laws will lead to a $6 billion bailout of the state's largest utility, PG&E, which, though bankrupt is profitable. Acknowledging the PUC's tendency to skirt the law, PUC President Lynch noted last October: "Well, actually the Commission is prevented under state law under [AB] 1890 from allowing that recovery [the Edison bailout], and what we did with the Edison settlement was essentially agree to a settlement that federal law trumped state law, but the Commission on its own could not trump state law. The Commission must follow state law." In other words, the PUC must follow the law, unless there's a sneaky way to break it. More on last week's filing, including the petition, can be found at:

Self-regulation: more than just a dietary fiber. One aspect of the Enron/Andersen scandal coming to light is the fact that the accounting field is "self-regulated," which is to say: unregulated. The lack of oversight has, predictably, contributed to the lack of accountability in the profession, as powerful companies easily shout down calls for financial reform in private. If you think big corporations exercise too much power over lawmakers, it's even worse when industries make their own rules. According to the Wall Street Journal, the Financial Accounting Standards Board (FASB), the accountants' private watchdog, considered preventing the shady accounting mechanisms that led to the Enron meltdown. But Enron and Andersen, along with many other dominating corporate interests, lobbied the FASB in opposition to the proposal. Companies like Enron wanted to be able to hide losses from their shareholders, thereby artificially boosting stock values. Andersen, for its part, appears to have been more interested in keeping its clients wealthy than in keeping them honest. The public will be much better off when accountancy is subject to government oversight and self-regulation is left to Metamucil.

US Senate refuses to taint energy industry boondoggle with consumer protections. The U.S. Senate last week showed its unwillingness to slow the Daschle energy bill's descent into total acquiescence to the energy industry (see WB #7, 17 for more on this bill). Late last week California Senator Feinstein (a Democrat), unable to overcome a filibuster, withdrew an amendment that would have regulated speculative trading involving energy contracts. The current lack of regulation has enabled companies like Enron to engage in complex, secret deals that generated massive profits while producing zero megawatts--all without any scrutiny whatsoever. The same day that Senators killed Feinstein's amendment, they voted down a proposal by Republican Sen. Craig of Idaho that would have stripped Daschle's bill of its electricity deregulation section. This section is a disaster for consumers, and the push to keep it in the bill is clear evidence that energy industry's weight in the Capitol has not lessened in the wake of Enron.

Make yourself feel better about Tax Day. Call your Senator and urge them to oppose the energy legislation (see above). If the law were passed in its current form, it would add $2.3 billion in tax increases to subsidize the nuclear industry, $1.8 billion for the coal industry, 2 billion more tax dollars for oil and gas subsidies plus another $3.2 billion in tax breaks for the oil/gas industry that the rest of us would be left to pick up. So make the call, if for no other reason than to make next April 15 less painful.
The Foundation for Taxpayer and Consumer Rights (FTCR) is a non-profit, non-partisan advocacy organization. For over a decade FTCR and its advocates have exposed and challenged injustices that betray the public trust. The Whistleblower newsletter addresses core issues of the corporate and governmental crises of today and blows the whistle on the brewing fiascos of tomorrow. FTCR does not take a position on candidates for any elected office.
For more information about FTCR's work, to DONATE, to join the fight, or to comment, visit our web site at 310-392-0522 xt.309.
2002 FTCR

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