The Public Utilities Commission has hired a prominent, white-collar criminal defense lawyer to help it with an expanding investigation into possible improper communications, bribery and other wrongdoing at the powerful regulatory body.
The action comes as state and federal law enforcement agencies are looking through tens of thousands of emails and mountains of documents that appear to indicate that PUC officials, including the former president and executive director, had overly cozy relations with executives at Pacific Gas & Electric Co. and other regulated power companies.
Spokeswoman Terrie Prosper said the PUC hired outside defense attorneys because "it is customary in legal investigations to have an attorney who can interface with investigative agencies, accept and handle subpoenas etc."
What's more, she said, "our in-house lawyers are not criminal attorneys."
Additionally, in this case, the PUC cannot rely on its regular legal representative, state Atty. Gen. Kamala D. Harris, because Harris has launched her own probe into the PUC, Prosper said.
The PUC has signed an initial $49,000 contract with the downtown Los Angeles law firm of Sheppard Mullin.
The scope of the contract covers "all criminal, civil and administrative proceedings undertaken by any federal state or local agency ... involving directly and indirectly any allegations of inappropriate interactions by CPUC personnel with Pacific Gas & Electric and any other utility from 2009 to 2014."
Leading the team is Raymond C. Marshall of Sheppard Mullin's San Francisco office. Marshall's biography describes him as a partner who deals with government contracts and investigations, including proceedings brought by the U.S Department of Justice, various U.S. attorneys, state attorneys general and district attorneys.
Marshall is charging the PUC a discounted rate of $882 per hour. The other six people working with him bill between $764 and $278 hourly.
The chummy relations between former PUC President Michael Peevey and top executives at Pacific Gas & Electric Co. are being probed by Harris and the U.S. Attorney in San Francisco. Harris has served search warrants on the home of Peevey, a PG&E vice president for regulatory matters and the PUC office of former commission Executive Director Paul Clanon.
Some lawyers not involved with the PUC case have suggested that it is illegal for the PUC to use public funds to pay for an outside criminal defense attorney. Disagreeing, however, was Phil Kohn, an Orange County lawyer who specializes in representing public agencies.
PUC could hire an outside firm to defend PUC personnel if the alleged wrongdoing was in the scope of employment and was done in "good faith, without actual malice and in the apparent interest of the public entity," said Kohn.