DTSC Second-in-Command Now Focus of Ethics Investigation

The Fair Political Practices Commission is looking into the stock holdings of the Department of Toxic Substances Control’s chief deputy director following NBC Bay Area Investigation

By Vicky Nguyen, Liz Wagner and Felipe Escamilla
|  Thursday, Jan 9, 2014  |  Updated 1:04 PM PDT
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The Fair Political Practices Commission has launched a formal investigation into DTSC chief deputy director Odette Madriago to determine whether she violated conflict of interest laws by investing in companies the department regulates. This story aired on April 2, 2013. Vicky Nguyen reports.

The Fair Political Practices Commission has launched a formal investigation into DTSC chief deputy director Odette Madriago to determine whether she violated conflict of interest laws by investing in companies the department regulates. This story aired on April 2, 2013. Vicky Nguyen reports.

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The chief of the enforcement division at the Fair Political Practices Commission said Tuesday that the FPPC has launched a formal investigation to determine if Odette Madriago, deputy director of the Department of Toxic Substances Control, violated any conflict of interest laws by holding stock in companies the DTSC regulates.

The FPPC says a formal complaint filed by Los Angeles-based advocacy group Consumer Watchdog and an NBC Bay Area investigation prompted the probe.

“It’s really important that our public officials are working only on behalf of the public, not their own interests,” Gary Winuk, chief of the FPPC’s enforcement division said. “The conflict of interest rules are designed very specifically to make sure those interests are being served for the public.”

The Investigative Unit first raised questions about Madriago’s investments last month after reviewing seven years of economic interest disclosure reports for the top ten highest paid staffers at the department. NBC Bay Area found that Madriago, a 25-year veteran of the DTSC, held thousands of dollars-worth of stock in several companies that that DTSC oversees, including Chevron.

According to the documents, Madriago held up to $100,000 of shares in Chevron from 2005 to 2007, and maintains up to $10,000 in shares in the most recent year of disclosure. Chevron currently holds a hazardous waste permit with the department.

Following the August fire and explosion at Chevron’s Richmond refinery, which sent thousands of people to the hospital, the DTSC posted a letter on its website stating that the department “will invoke our authority when it is warranted.” The letter also said that the DTSC is “working in support” of agencies in Contra Costa County and the city of Richmond. The DTSC has not issued any fines or penalties to Chevron after the explosion. The department said it doesn’t have the authority to do so.

In a February interview, Consumer Watchdog advocate Liza Tucker said she had concerns about Madriago’s investments in Chevron.

“I wonder if that might not be a reason this department has not been aggressive in regulating refineries,” Tucker said. “At that very least it’s certainly a conflict of interest.”

Winuk said it’s important for public officials to be “focused on doing the public’s business” and not have “outside influences affecting their decision making.”

In an email, the DTSC’s deputy director of communications wrote that the department and Madriago are “fully cooperating with the FPPC on this issue.” Last month the DTSC said that its legal office also conducted a seven-day review of the stock holdings and past decisions by Madriago and discovered no evidence that she violated California’s conflict of interest law.

In March Consumer Watchdog called on Governor Jerry Brown to conduct an investigation into allegations of financial conflict of interest at the DTSC. The nonprofit group also issued a scathing report about the DTSC in February, accusing the department of allowing companies to operate on expired permits and stay in business even when they repeatedly violate California’s pollution laws.

At the request of three state senators including majority leader Ellen Corbett, the State Senate Office of Oversight and Outcomes launched an investigation into issues raised by NBC Bay Area’s investigations and the Consumer Watchdog report.

“I will continue pressing forward to ensure that DTSC effectively serves California’s residents and environment,” Corbett said in part in an email to NBC Bay Area.

Winuk said that if Madriago is found to have violated conflict of interest laws she could be subjected to administrative, civil or criminal penalties.

Click on the links below to watch the Investigative Unit’s previous reports into the DTSC:

DTSC Leaders Have Owned Major Stock in Companies They Oversee

Insiders Say CA Toxic Regulation is Weak

If you have a tip for the Investigative Unit email theunit@nbcbayarea.com or call 888-996-TIPS.

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