Why the Jaxon Van Derbeken story is so very important
Did Southern California Edison’s Ronald Litzinger participate in CPUC’s obstruction of justice with Commissioner Mike Florio, Michael Peevey, and Judge Melanie Darling?
On May 2, 2015, journalist Jaxon Van Derbeken published this story in the San Francisco Chronicle outlining how California Public Utilities Commissioner (CPUC) Michel “Mike” Florio participated in an unlawful secret meeting with Ronald Litzinger of Southern California Edsion.
Here’s the “back story”
The unlawful negotiations took place minutes before the three walked downstairs to participate in what was supposed to be an impartial public hearing on a proposed rate increase for Edison.
Judges (Commissioners) aren’t supposed to negotiate
The reason everyone is agog about this meeting (see the shocking video here) is that Commissioners are like judges — they are supposed to be independent and make decisons based on evidence in open court. A Commissioner must not engage in secret negotiations and they certainly aren’t allowed to shakedown a utility in exchange for a sweetheart rate increase.
But in this case, Florio and Peevey were negotiating final settlement terms for the proposed bailout with Edison’s Ronald Litzinger in exchange for $25 million in payola to one of Peevey’s favorite charities …
And those terms were very favorable …
The deal was simple: If Edison’s Litzinger agreed to shell out the $25 million, Peevey and Florio would agree to approve an unlawful $3.3 billion rate hike on behalf of Edison. The $25 million was marked for Peevey’s alma mater at Berkeley where he held a position on the board. Cynics have suggested that Peevey planned to use the Edison “donation” to secure a lucrative paid position at Berkeley.
The secret “ex parte” meeting violated the law.
One of the reasons we have open courts and public hearings in the United States of America is to prevent judges from secretly taking bribes from criminals. In this case, Peevey and Florio appear to have brokered — and then withheld — their approval of Edison’s bailout until Litzinger agreed to “donate” the $25 million. Whenever a judge holds a meeting where all the parties are not represented, he or she is required to file an “ex-parte” notice. This was never done, which is one of many reasons the meeting violated the law.
What Edison received for its $25 million.
Ultimately, Edison agreed to “donate” the $25 million as part of an amendment to the deal brokered by Florio. Here’s what Edison got in exchange:
1) It got a rate-payer funded $3.3 Billion subsidy.
Edison got bailed out for billions of dollars that should
have been paid by shareholders, not ratepayers.
2) Edison dodged a public “reasonableness” hearing.
California law states that all rates approved by CPUC must
be “reasonable” and that the evidence of whether or not
a rate hike is reasonable must be evaluated in open public
hearings. Florio’s secret deal eliminated public hearings.
There is no way that anyone examining the evidence in
this case could conclude that it is “reasonable” for utility
customers to pay for Edison’s management blunder when it
installed nuclear generators that were not licensed by the
Nuclear Regulatory Commission. Because the generators
were unlicensed, Edison is 100% at fault. The deal offered
by Peevey and Florio helped Edison avoid public hearings
where these facts would become a part of the public record.
Why the “deal” is an outrage
In the meeting that followed, Michael Aguirre of Aguirre & Severson was given less than an hour to offer legal objections to the Edsion bailout. During this meeting, Mr. Aguirre asked Ronald Litzinger repeatedly if he had engaged in secret “ex parte” meetings with Public Utility Commission officials. Aguirre was constantly interrupted by Judge Melanie Darling and Litzinger’s attorney, Mr. Weissman.
The question “Did you meet secretly” was never answered.
As this transcript of the March 14 meeting shows, Mr. Aguirre was prevented from getting truthful answers to that simple question by Administrative Law Judge Melanie Darling. At the close of the meeting President Peevey refuses to answer Mr. Aguirre’s questions by shouting “I don’t have to answer your Goddamn questions!”
Watch a video of Peevey’s mental breakdown here.
We now know why Peevey screamed obscenities in a public hearing: He was guilty of holding secret ex parte negotiations exactly as Mr. Aguirre had surmised. And as we know now, Peevey and Florio had been cajoling Litzinger to “donate” $25 million just minutes before the hearing.
It is painful to read the Darling Transcript
Reading this document is painful. At the beginning of the transcript Darling actually attempts to portray the secretly negotiated out-of-court settlement as an “All-party Settlement.” She is prevented from completing this deceptive statement after Mr. Aguirre objects and forces her to restate the nature of the settlement.
Is Darling guilty of obstruction of justice?
Mr. Aguirre’s primary objection to the bailout was that it was secretly negotiated in an out of court settlement in violation of the State Law that requires public “reasonableness” hearings. At no time during the hearing was Mr. Aguirre allowed to get answers to very simple questions because Judge Darling routinely intervened on Edison’s behalf.
Did Litzinger commit perjury?
On page 117, line 20 of the Darling Transcript, Litzinger states under oath “The only ex parte communications I had with commissioners was following the Phase 1 proposed decision. And it was noticed.” Yet we know for a fact that minutes before that hearing, Litzinger had been negotiating secretly with Florio and Peevey.
It is apparent to any reasonably intelligent person who watches the video, or reads the transcript, that this hearing was a sham, and law enforcement would be well-advised to take action.