Gov. Jerry Brown has tried for many months to ignore the growing scent of corruption now afflicting his administration, instead pushing the worldwide battle against climate change even as he virtually ignored the world’s largest methane leak while it spewed greenhouse gases for months in his backyard.
But serious conflict-of-interest allegations now reach directly into his office, targeting his chief of staff, Nancy McFadden, the top Sacramento official for Pacific Gas & Electric Co. for many years before she took a $1.04 million golden handshake in 2011 before rejoining Brown, for whom she worked in the 1970s. (The payment, essentially a bonus, is documented in SEC filings).
Not only did McFadden take PG&E’s money, but disclosure forms show she owned about $100,000 worth of PG&E stock and many potentially lucrative stock options through her early months back with Brown. During this time, she was allegedly a key part of the appointment process for new members of the state Public Utilities Commission, which regulates PG&E and other California utilities, a normal chief of staff function.
There is no evidence McFadden recused herself from utility matters. This, of course, raises the question of whether her golden handshake was really a prepayment for future services.
McFadden is now the subject of a formal complaint just filed by the Consumer Watchdog advocacy group with the state Fair Political Practices Commission, a panel very unlikely to act against the top aide to the man who appointed two of its members.
Charges in the Consumer Watchdog complaint, filed under the Political Reform Act — ironically, sponsored by Brown during his first stint as governor in the 1970s — are sweeping and specific.
McFadden, the group said, “… us(ed) her official position to influence governmental decisions in which she knew she had a financial interest. Her actions impacted the value of the PG&E stock options she held.” The filing goes on to say McFadden “was Gov. Brown’s point person on utility policy, utility legislation and political appointments to the PUC.”
Brown press secretary Evan Westrup denied all this, calling the filing against McFadden “riddled with inaccuracies.” He added that “she was not vetting candidates for the PUC and did not play a role in the other decisions noted while she had the holdings referenced.” Brown did not speak about McFadden, just has he’s refused to talk about corruption allegations at the state Energy Commission and documented corruption at the PUC.
But emails among the 70,000 obtained by San Bruno city officials after the 2010 PG&E gas pipeline explosion that killed eight people there indicate her old friends at PG&E believed she was involved.
In early 2011, PG&E executive Brian Cherry – now under criminal investigation along with former PUC President Michael Peevey – advised someone seeking a high PUC post via email to get help from McFadden, whom he called “the backdoor route” to getting appointed.
The pileup of ethical problems in Brown’s administration seems to grow every few weeks, with the McFadden charges merely the newest. They join obvious conflicts of interest and examples of cronyism exercised by the Energy Commission, exposed in this column in 2014. Add the proven collusion between Peevey and executives of Southern California Edison Co. in assessing consumers more than 70 percent of the cost of the 2012 failure of the San Onofre Nuclear Power Station, caused by an Edison blunder.
Then see Brown’s almost total indifference to the massive methane leak at a Southern California Gas Co. storage facility near Porter Ranch in Los Angeles, when his sister Kathleen draws six figures yearly as a director of SoCal’s parent company. Her position alone should raise conflict-of-interest questions whenever Brown decides utility policy. The Porter Ranch leak spewed more greenhouse gases than many months of driving by all the cars in the Los Angeles Basin, but Brown said little about it.
Taken together, it appears there could be a pattern of corruption at high levels of state government, and a consistent Brown practice of ignoring or condoning both corruption and safety lapses.
But other episodes don’t reach as close to him as the charges against McFadden, his close aide and adviser.
The bottom line: Brown wants to be remembered for solving California’s budget mess and aggressively fighting climate change. Right now he risks being remembered much more negatively.
Thomas D. Elias writes the syndicated California Focus column.