Stonewalling At CPUC Continues With Hiring Of Yet Another Criminal Defense Firm

By Jeff McDonald 6:41 p.m.May 29, 2015

Even as a bill makes its way through the legislature reining in the California Public Utilities Commission for its hiring of criminal defense attorneys, lawmakers learned that the agency has done so more than once.

The bill came in response to the hiring of white-collar crime experts at Sheppard Mullin, for as much as $5.2 million, and up to $882 an hour. The agency is under investigation for its backchannel dealings with the utility executives it’s supposed to oversee.

The legislation, authored by Sen. Jerry Hill, D-San Mateo, would require legislative review of such agreements. It passed the state Senate this week and is now headed to the Assembly.

According to an analysis of the bill, utility customers are not only paying the Sheppard Mullin law firm to represent the agency as a whole, but they are also paying for a separate defense firm to represent a specific employee.

“Given that the employee has acted in good faith in the course of their employment and fully cooperated with investigators, the CPUC agreed to pay the employee’s outside counsel legal fees, which the employee requested,’ commission spokeswoman Terrie Prosper said.

The contract was initially approved for $35,000, according to the Senate analysis. The Sheppard Mullin contract was initially approved for $49,000.

Hill said the undisclosed hiring of another criminal-defense firm does not reflect the actions of a commission that is committed to reforming itself.

“It’s outrageous again,” Hill said. “It looks like a bait and switch. From what we can see, it was $35,000 and that will probably grow into another $5 million as we saw before.”

Hill said he was especially bothered that commission President Michael Picker and interim Executive Director Timothy Sullivan didn’t mention the additional legal contract when they testified about the Sheppard Mullin agreement at a committee hearing in March.

“It is really troubling that they sat right in front of us in hearings, just giving us facts as they want to but not as they are,” Hill said. “We want transparency. We want openness and we are getting neither. It’s shameful.”

The latest contract is with San Francisco attorney Anthony Brass, who told The San Diego Union-Tribune he is representing Karen Clopton, the commission’s chief administrative law judge. Brass said his client is a cooperating witness, not a target of the investigations.

“She’s also an authority on the inner workings of the CPUC, and that’s guidance that the state and federal investigators need,” Brass said.

Clopton was the official who signed the order in late March removing Commissioner Michel Florio from the proceeding involving the premature shutdown of the failed San Onofre nuclear power plant north of Oceanside in January 2012.

Florio was a key supporter of the November agreement that assigned 70 percent of the $4.7 billion in shutdown costs to ratepayers, rather than utility stockholders. He also has been involved in some of the emails with utility executives that precipitate criminal investigations.

Brass said he signed the retainer in October or November.

The bill to require commission approval of criminal-defense work was introduced by Hill and Sen. Ben Hueso, D-San Diego. Sen. Carol Liu, D-La Canada Flintridge, who is married to the disgraced former commission President Michael Peevey, supported the legislation.

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