California Public Utilities President Michael Peevey, under investigation for his cozy relationship with the companies he regulates, announced Thursday that he would step down at the end of the year. That’s the right call.
Peevey’s announcement came after a trove of emails were released detailing some of his private conversations with utility company executives. Of all the revelations, one of the most disturbing was that Peevey apparently solicited large donations from the very companies that must come before him in his official capacity at the commission.
In one case, the emails indicate, Peevey asked Pacific Gas and Electric Co. to give $1 million to oppose a ballot initiative; the company gave half that, records indicate. He also asked PG&E and two other large utilities to donate $100,000 each to a centennial celebration for the commission.
Did the companies have a choice? They must come begging and arguing before the commission over rates, environmental requirements and a host of other issues, and Peevey is the person with the most power over their fates. How likely were they to turn him down on his donation requests? And once the money was donated, what did he owe to them?
This isn’t the only example of public officials prodding the special interests they wield power over to donate to their pet causes. Not by a long shot. It is a frequent practice that Californians should find deeply troubling. These donations, called “behested payments” because they are given at the behest of a powerful person, are not illegal in most cases. But the law requires them to be reported by the state’s elected officials and by PUC commissioners when they amount to $5,000 or more. There are no reporting requirements for other officials, including members of state boards that oversee various businesses.
Records of the California Fair Political Practices Commission show no sign that Peevey ever filed such a report. But Gov. Jerry Brown has filed extensive reports indicating, for example, that millions of dollars were donated at his behest to two charter schools he founded in Oakland.
It’s pretty clear that special interests are under pressure to give to causes they would not otherwise donate to, out of fear that they’ll be punished if they don’t. And the payments give the appearance that politicians or regulators might not be evenhanded in their dealings.
At times, officials even solicit contributions to nonprofit organizations that family members work for or oversee, or to groups that help the officials themselves by funding, for example, expensive trips abroad.
It’s all legal. But it should offend Californians’ sense of fairness and erode confidence in their elected officials.
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