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NEWS RELEASE
Dec 31, 2002

Davis' PUC Appointments: The Real Cloning Issue

Davis Chooses Insider Rather Than Independent Consumer Advocate for Board
Santa Monica, CA -- Governor Davis is expected to announce the appointment of one of his chief advisors, Susan Kennedy, to fill the vacancy on the Public Utilities Commission (PUC) created by the departure of Henry Duque. Ms. Kennedy was a key advisor to Governor Davis during the energy crisis, when the Governor's chief policy position centered around providing a consumer funded bailout of Southern California Edison. Although the Legislature rejected Davis's bailout scheme, Davis appointees at the PUC orchestrated a secret settlement to bail out Edison.

"Governor Davis is cloning himself at the PUC to make sure he can get whatever he wants out of that agency," said Douglas Heller, the senior consumer advocate at the Foundation for Taxpayer and Consumer Rights (FTCR). "The Governor tries to keep his distance whenever the PUC raises rates, yet he continues to appoint people from his inner circle. There is no distance between the Governor and the PUC."

FTCR said that the constitutional independence of the PUC is weakened by the appointment of people so close to the Governor and his administration. The group says that the Governor should instead nominate an independent consumer advocate to the Commission.

"With billions of dollars in consumer rates at stake, Californians need an independent consumer voice on the PUC rather than another Davis insider," said Heller

Superior Court Ordered Out-Going Commissioner Duque Removed From Office
Kennedy is set to replace Henry Duque, whose term officially ends today. Duque, however, is still engaged in a legal battle concerning his ownership of stock in Nextel Corporation, a company regulated by the PUC. In April, 2002, in a lawsuit authorized by Attorney General Bill Lockyer and brought by FTCR on behalf of the People of the State of California, Mr. Duque was ordered to vacate his office, pay a $5,000 fine to the state treasury and court costs for violating the state's conflict of interest laws. Duque appealed and was granted a reprieve by the appellate court which allowed him to stay in office pending his appeal. Argument in the appeal was held on December 18, 2002 before the First District Court of Appeal in San Francisco. The Court has not yet issued its ruling.

According to public records, it is estimated that close to $250,000 in taxpayer dollars has been spent on Mr. Duque's legal defense fees to date.

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