Here’s a news flash that’s probably causing a lot of sleepless nights among Governor Brown’s inner circle: The central figure in the PUC corruption scandal, PG&E lobbyist Brian Cherry, is now a witness for the US government, in the case against PG&E over the San Bruno explosion.
Before the federal case against PG&E over San Bruno was delayed, the witness list turned over by the Justice Department included Cherry as one of its own witnesses.
Emails between Cherry, PUC president Michael Peevey and the PUC and utility establishment went public in wake of the San Bruno corruption case. We’ve been reviewing the database of 65,000 emails and they are a treasure trove of government and utility company corruption.
For example, some of Cherry’s emails to former PUC President Michael Peevey, now under criminal investigation, is what fingered the Governor’s top aide, Nancy McFadden, as a conduit for the appointment of a pro-utility PUC commissioner while she held PG&E stock.
Warned about PG&E’s falling stock value in the wake of pro-consumer appointments, Peevey emails Cherry “As I suggested before, this info should go to the Governor’s office, probably best to Nancy McF. Jerry has to be made aware that actions have consequences and the economy is best off with a stable utility sector .” Cherry responds, apparently after talking with McFadden, “Nancy asks if you have any names you would recommend. You can call her directly if you like.” Cherry and Peevy then spend much email time vetting a short list of candidates.
The exchange is a key part of evidence in Consumer Watchdog’s FPPC complaint against McFadden, who provided no evidence or record of recusal on the matters. In response, the Governor’s spokesperson Evan Westrup said “folks inflate their influence on and access to this office every day of the year in this town — and this individual is no different.”
This individual is very different. As a US government witness, Cherry likely has immunity and can freely name names and provide more evidence. That includes investigations suggested by his now-revealed emails, including McFadden’s, and new evidence he might have to offer about others. (There's a possiblity Cherry will be a hostile witness, but, given the description of his testimony and the long list of evidence against him it's very likely Cherry has cut a deal.)
Reading through the PUC-gate emails shows that it wasn’t just Peevey who believed the stability of utility stock values was more important than the fairness of what California ratepayers paid. Past and current PUC officials clearly shared the same viewpoint. That’s why current PUC President Michael Picker has said he didn’t see a need to re-open the San Onofre investigation, even after the criminal investigation of Peevey's corrupt deal and evidence showing Edison was at fault.
Picker has pandered to Wall Street as much as Peevey, albeit without evidence of the same criminal modus operandi. Whether to close or expand Aliso Canyon in the wake of the largest methane leak is a big test for Picker, Brown’s close adviser and appointee. His testimony before the state senate yesterday, suggesting Aliso had to be kept open for “reliability” in the Los Angeles basin, showed his fealty to So Cal Gas and its parent company Sempra, on whose board Brown’s sister Kathleen sits.
If Cherry cooperates with authorities, and there are “authorities” willing to buck the Governor, the dominos will fall. Brown himself better be squeaky clean or he might not be standing.
