SCE Chief Allegedly Promised Seats on Board

The chairman of SCEcorp offered San Diego Gas & Electric board member Malin Burnham a seat on SCEcorp’s board of directors several days before SDG&E; accepted a proposed merger with Southern California Edison, a former SDG&E; board member said Wednesday.

O. Morris Sievert, who in December resigned from SDG&E;’s board to protest the controversial merger vote, testified about Howard Allen’s purported offer to Burnham during a highly unusual public deposition sanctioned by the state Public Utilities Commission. Allen is chairman of SCEcorp, the Rosemead-based parent company of Edison.

Sievert said Allen might also have offered a board seat to Clair W. Burgener, a former congressman who serves on the SDG&E; board. Sievert said he learned of the purported offer to Burgener during a conversation with La Jolla businessman Charles (Red) Scott, who also resigned from SDG&E;’s board to protest the planned buyout.

‘Constituted Coercion’

According to Sievert, Scott believed that Allen’s alleged offers “constituted coercion” because they were made while Edison was lobbying SDG&E; board members to support the merger.

Sievert said Burnham subsequently told Allen that the offer was a “subject that he didn’t want to discuss” before the SDG&E; vote. “My impression was that Mr. Burnham had not at all decided that he would take such a seat,” Sievert said.

During Wednesday’s daylong proceeding, Sievert stopped short of describing his own view of the reported offers.

He said Scott and other board members were upset to learn that four SDG&E; executives, including SDG&E; Chairman Thomas Page, had negotiated lucrative employment contracts with Edison.

Sievert said he at first accepted those contracts as “rather logical,” but within weeks came to view them as a “conflict of interest in the broadest sense” because Page and the other executives with contracts were also negotiating the merger.

The employment contract seemed to sway Page, who previously had indicated that “he did not want to be a caretaker” working for Edison, Sievert said. “I began to feel that . . . Mr. Page (now) preferred to be a part of Southern California Edison rather than simply running SDG&E;,” he said.

Scott was not immediately available for comment on Sievert’s statement, and Jerry Coughlan, a San Diego attorney who represents Scott in the PUC proceedings, declined to comment. Burgener and Burnham also were unavailable for comment Wednesday.

Spokesmen for SDG&E; and Edison declined to comment on Sievert’s wide-ranging testimony.

Sievert’s deposition gave San Diegans the first real glimpse into the complex decision-making that led SDG&E; board members to accept a $2.4-billion stock swap merger offer from SCEcorp on Nov. 30. SDG&E; and SCEcorp shareholders are expected to vote on the proposed merger during meetings later this month.

Sievert on Wednesday maintained that SDG&E; shareholders have not been given adequate information to vote on the merger.

During the deposition, which was conducted mainly by Washington-based attorneys representing the city of San Diego, Sievert also testified that SDG&E;’s officers had failed to provide SDG&E; board members with adequate information about several substantive issues before the vote.

Sievert said he subsequently learned about those issues by reading newspapers and talking to San Diegans.

Sievert said that, before the vote, board members dedicated substantial time to discussing the merger’s effect on SDG&E; shareholders but little or no time on the proposal’s effect on SDG&E; employees and the environment. However, several board members expressed “serious doubts” about Allen’s highly publicized promise to seek a 10% rate decrease for SDG&E;’s residential customers.

Urging From Cleator

Sievert also said that former City Councilman Bill Cleator evidently urged Burnham, who reportedly voted against the merger, to remain on the SDG&E; board rather than quit in protest. Cleator, who was not available for comment Wednesday, evidently believed that Burnham “could do more to upset the merger on the board than off,” Sievert said. Burnham did not resign.

Sievert indicated that only a handful of SDG&E;’s board members and executives correctly forecast the strong community protest that has arisen in the wake of the vote.

“The great majority of them either didn’t believe it was true or that it didn’t matter,” he said.

Burgener, in a Feb. 14 letter to Sievert that was made public Wednesday, acknowledged that he has had to “eat a large portion of crow--I was dead wrong when I opined that this proposed merger would be greeted in the community by a monumental chorus of yawns. That was almost total naivete on my part. . . . “

Sievert had planned to testify in depth Wednesday, as well as make public 10 cartons of confidential SDG&E; documents. In a recent PUC filing, he said he had “no objections” to going public with details about the SDG&E; board vote because public concern in San Diego County over the merger “appears to outweigh any interest in maintaining the ‘confidential’ or ‘privileged’ status of the documents in question.”

However, earlier this week, SDG&E; asked a PUC law judge to issue a protective order that would keep the documents secret. During testimony Wednesday, Sievert on about 20 occasions declined to talk about sensitive documents because the law judge has not yet ruled on SDG&E;’s request. It is uncertain when a ruling will be made.

On more than 50 other occasions, James E. Lyons, a Los Angeles-based attorney who represented SDG&E;, complained that questions asked of Sievert by the city of San Diego’s attorneys were vague, ambiguous, leading or without foundation.

Sievert was subpoenaed to appear at the deposition by the city, which has subpoenaed Scott to appear for a similar deposition Monday.