Governor Jerry Brown is circling the wagons around the Public Utilities Commission in the face of our criticism that one of this latest appointments—his trusted advisor on all things energy and environment Cliff Rechtschaffen—is a lapdog of the oil industry.
Brown spokesman Evan Westrup considers the lapdog label “drivel” that merits no response. It's understandable that the Governor might be touchy about the truth. It's documented in court evidence and undisputed by the Administration that Rechtschaffen was Brown’s hit man who fired two tough oil and gas safety regulators back in 2011 on behalf of the oil industry.
That suggests that in this next incarnation Rechtschaffen will carry water for major investor-owned utilities that the PUC feeds with billions in ratepayer money while looking the other way when they drop the ball on maintenance. Think the San Bruno explosion that killed eight on Pacific Gas & Electric's watch, SoCalGas's Aliso Canyon well blowout that led to the biggest carbon-emitting methane leak in US history, and Southern California Edison's flawed San Onofre nuclear generating station that will cost ratepayers the lion's share of $4.7 billion to close because of a dirty deal by a corrupt former PUC Chairman behind closed doors.
Here is what Rechtschaffen did for the oil industry and ultimately his Governor. He got oil regulators out the way who were trying to protect the public. Derek Chernow, then acting director of the Department of Conservation, and Elena Miller, then oil and gas Supervisor, were just folllowing federal law by making oil companies prove they wouldn’t wreck protected drinking water aquifers before granting them permits for injections of oil wastewater into wells. That pissed off the oil industry, and Occidental told Brown so.
That’s when Rechtschaffen swung into action, according to a signed declaration by Derek Chernow. The declaration is part of a RICO lawsuit against Brown, oil companies, and the state for poisoning Kern aquifers. According to the declaration, Chernow had sent a memo to the Governor’s Office explaining why the Administration’s proposal to grant permits without injection well safety checks violated state and federal rules. That’s when Rechtschaffen called a phone meeting, attended in person by Chernow, Miller, and other officials from the Natural Resources Agency--including Liane Randolph, a former Chevron lawyer who today is a PUC Commissioner waiting to welcome Rechtschaffen on board.
Chernow described how Rechtschaffen yelled over the phone that he and Miller “had their orders” to go ahead and issue permits. Randolph backed Rechtschaffen up—telling the pair to follow marching orders “even if they don’t know the reason.” The next day, Chernow was fired and Miller followed. Rechtschaffen took over Chernow’s job for a few months until a sufficiently pliant replacement could be found. Appointee Mark Nechodom would ultimately quit after oil companies were allowed to despoil thousands of protected aquifers on his watch and that of Tom Kustic, high up in the oil and gas division. Rechtschaffen promoted Kustic, who originally came from the oil industry, to take Miller’s place.
Rechtschaffen sure looks like he was a lapdog for the oil industry. Westrup’s dismissive comments look more like smoke obscuring a fire.
Take our Fair Political Practices Commission (FPPC) complaint against top Brown aide and former Pacific Gas & Electric exec Nancy McFadden. We alleged in March 2016 that McFadden had violated conflict-of-interest rules for not recusing herself from official decisions that would have affected her substantial PG&E stockholdings. Westrup said the complaint was “riddled with inaccuracies and has no merit." If so, then it's hard to explain why the state's campaign finance watchdog did open an investigation into McFadden’s failure to disclose dates and times of her stock sales in PG&E, her former employer, while having inside information on the government’s investigation of PG&E over its San Bruno explosion that would have affected its stock value. The investigation is still open.
Then there was Westrup’s reaction to our report, Brown’s Dirty Hands. We found that 26 energy companies—with business before the state—donated $9.8 million to Brown, his campaigns, causes, ballot initiatives and the state Democratic Party between 2011 and 2014. They often got legislative or regulatory favors in exchange. We also found that the California Democratic Party received $4.4 million in energy donations and gave Brown’s 2014 re-election campaign $4.7 million, suggesting that the party was used as a laundry machine for industry donations above the legal limit.
Westrup called the allegations in the report “downright cuckoo.” Again, the FPPC disagreed. They launched an investigation into the troubling pattern of contributions to the state Democratic Party by oil, utility, and energy companies.
On the contrary, the more flippant Mr. Westrup’s comments become, the more seriously the allegations should be taken. So, before rubberstamping Mr. Rechtschaffen’s new PUC appointment, California state senators, who have confirmation authority, should take a very hard look at what they are buying on behalf of the people of California. Does this appointment look like a signal for reform of a secretive, scandal-plagued, and corrupt PUC? If the answer is no, deny the Governor his wish to keep industry's tracks--and possibly his own--covered.