Links to Edison Draw 1st Interstate Into Battle Over Merger of Utilities
Los Angeles-based First Interstate Bancorp has been drawn into the battle the city of San Diego is waging to keep San Diego Gas & Electric from merging with Southern California Edison.
In filings made Thursday with federal regulators, city attorneys alleged that four members of First Interstate’s board of directors are serving illegally because they also serve as board members of SCEcorp, the Rosemead-based parent company of Southern California Edison.
City Atty. John W. Witt maintained that those board members should be forced to resign--and that SCEcorp board votes involving the proposed merger with SDG&E; should be rescinded.
“It is a violation of (Federal Energy Regulatory Commission) rules to be a director of a utility as well as a bank that does utility financings,” Witt said. He maintained that First Interstate and SCEcorp failed to request energy commission approval before seating the four board members.
Spokesmen for First Interstate, the parent company of First Interstate Bank, and SCEcorp denied any improprieties.
“This is an abusive process by the city of San Diego,” SCEcorp spokesman Lewis Phelps said. Phelps contended that the city’s complaint involved an “obscure, fourth-tier subsidiary of First Interstate Bank that is located in England.”
Several years ago, that English subsidiary arranged a financing deal for a utility in the Southeast part of the United States, Phelps said, adding, “That’s the only transaction involving a First Interstate Bank subsidiary and a utility financing transaction.”
“First Interstate has not been involved in a financing involving Edison.”
“I hadn’t heard about the filing but, in any case, we’d view it as an Edison matter,” said First Interstate spokesman Simon Barker-Benfield.
The city’s complaint, which was filed with the federal Securities and Exchange Commission, contends that First Interstate failed to tell its shareholders that four board directors who are up for reelection also serve on SCEcorp’s board.
Phelps said the four board members have applied to the federal energy regulatory panel for permission to serve on both boards. The complaint is “a non-issue,” Phelps said.
The four members who serve on both boards are: Roy A. Anderson, a Lockheed Corp. director; Norman Barker Jr., chairman of Pacific American Income Shares, a Los Angeles-based investment fund; Warren Christopher, chairman of O’Melveny & Myers, a Los Angeles-based law firm, and J. J. Pinola, chairman and chief executive of First Interstate Bancorp.