Governor’s choice for the PUC is under fire

The governor’s latest nominee for the board that regulates the multibillion-dollar energy and telecommunications industries has been in bankruptcy for more than four years, and faces questions about his qualifications and his commitment to consumer protection.

Timothy A. Simon was one of Gov. Arnold Schwarzenegger’s top-level aides, screening applicants for positions in the administration, until the governor selected him Feb. 15 for a vacant seat on the powerful Public Utilities Commission.

In December, while Simon was still working for Schwarzenegger, a judge ordered the state to deduct $1,795 per month from his monthly salary as part of a plan to repay his debts, according to filings in U.S. Bankruptcy Court in Oakland. A month later, a court trustee said Simon was in default of his repayment plan.

Simon, an attorney, has already begun his $124,000-a-year job at the commission, though he must still be confirmed by the state Senate. Opposition to his appointment looms.

Asked if Simon’s financial troubles would be considered, Senate leader Don Perata (D-Oakland) said, “We weigh everything.”

Perata said he also worried that Simon would emerge as another industry-friendly voice on a commission already laden with members sympathetic to business. Before the appointment, Perata said, he told Schwarzenegger aides that he wanted someone who would favor consumers in skirmishes over energy rates and cellphone disputes.

“That simply didn’t register very high,” Perata said.

Before joining Schwarzenegger’s staff, Simon worked as general counsel for Global Crown Capital of San Francisco, which describes itself as a boutique investment firm. An official at the firm who succeeded Simon as general counsel, Henry Wolfgang Carter, said he was surprised to learn of Simon’s nomination for the PUC job.

“What does he know about my PG&E; bill?” said Carter, who spoke about Simon’s job performance at Global Crown Capital to Senate aides who were reviewing Simon’s credentials.

State Sen. Christine Kehoe (D-San Diego), who will get a vote on Simon’s appointment, also questioned his qualifications. “Mr. Simon’s kind of an unknown on public utility issues,” she said.

Aaron McLear, the governor’s spokesman, said Simon wrote a check this week covering the remaining debt in his bankruptcy case -- $13,000 -- and he expected it to be dropped off at the trustee’s office today.

McLear said he did not ask Simon how he came up with the money. He said he asked him only if it was acquired “legally and ethically,” and Simon said yes.

McLear described Simon as well qualified for the post. Any financial troubles amount to “a personal issue that doesn’t have any bearing on his appointment,” he said.

“Timothy Simon is a highly educated and experienced attorney who is more than capable of adjudicating regulatory issues before the PUC,” he said.

A Schwarzenegger administration official who spoke on condition of anonymity because of the personal nature of Simon’s financial troubles said the bankruptcy sprang from a divorce “that cost a lot of money.”

Simon, who lives in San Francisco, was unknown to Schwarzenegger before his hiring in January 2006. He was recommended by a longtime friend -- former Assembly speaker and San Francisco Mayor Willie Brown.

In an interview, Brown said that more than a year ago he got a call from the governor’s chief of staff, Susan Kennedy, asking for candidates for the PUC. Brown said he mentioned Simon, who had volunteered in his administration when Brown was mayor.

“I’ve known him for much of his life,” Brown said. “I really came to respect his integrity and ability to inspire people.”

Brown said that Simon then met with the governor, who liked him enough to offer him a job as a top-ranking aide. A background check by the governor’s office turned up the bankruptcy, but officials hired him anyway.

For the governor, the hire carried a political dividend. Facing reelection, Schwarzenegger wanted to make inroads among black voters. At campaign stops in black churches, Schwarzenegger’s campaign staff invoked Simon as an example of an African American in an influential role.

Simon “went to Sacramento to be a PUC commissioner. And now that the campaign is over, it’s highly appropriate that his wish to be PUC commissioner is fulfilled,” Brown said.

Simon’s bankruptcy case opened in 2002, when court records show him with assets of $6,000 and liabilities of $101,767. One of his creditors at the time was the IRS, which said he owed nearly $51,000 in income taxes. Another was listed as the Child Support Services Department of Alameda County, which put his debt at $15,508.

Court records show that making payments was a struggle for Simon. In January, he had fallen behind in his payments, owed more than $5,000, and was in danger of losing protection under bankruptcy laws if he failed to pay up, according to a filing by Martha G. Bronitsky, trustee in the bankruptcy case.

Past commissioners said it is important that anyone in the job be immune to financial temptation. Businesses that depend on PUC action may dangle lucrative job offers -- a reward for compliant commissioners after they leave office.

Geoffrey Brown, who stepped down from the PUC in December after a four-year term, said: “People are inveigling themselves into your good graces. People will make suggestions that after you get off, you might want to go into regulatory work of some nature -- work for the companies.”

Loretta Lynch, another former PUC commissioner, said that those who serve should have a largely pristine past.

“Economic regulators should be held to an even higher standard than other government officials, because they have the power to reach into every single California business and family pocketbook,” Lynch said. That power, she added, “leads to more potential opportunities for financial conflict.”

Simon joins a commission with far-reaching authority. It has a staff of 830 and a budget of $1.2 billion. It regulates electric, telecommunications, natural gas, water and transportation companies. By one PUC estimate, Californians spend about $59 billion each year for services rendered by industries under the PUC’s purview.

Turnover has given the commission a pro-business tilt, consumer groups say.

Kennedy, the governor’s chief of staff, is a former PUC commissioner who in 2005 spearheaded the suspension of what was termed a “consumers’ bill of rights” for cellphone customers. In Simon, consumer groups see a member in the Kennedy mold.

“The hugely underrepresented group in the Public Utilities Commission is California consumers,” said Bob Finkelstein, executive director of the Utility Reform Network, a San Francisco-based utility watchdog group. “You get an opening, and you appoint someone from finance? Even worse, someone from your inner circle? It’s just a huge missed opportunity.”

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peter.nicholas@latimes.com

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