In California it’s perfectly legal, but does that make it right? The Investigative Unit examines the free travel CPUC president Michael Peevey has accepted from nonprofits and special interest groups. Chief Investigative Reporter Tony Kovaleski asks, are the trips simply gifts? Or are the gestures buying access to one of the most powerful people in California? This story aired on July 30, 2013.
The president of one of the most powerful and highly-funded regulatory agencies in the state has accepted all-expense paid trips to some of the world’s most exotic and desired locations, the NBC Bay Area Investigative Unit has found. According to statement of economic interests forms filed with state, California Public Utilities Commission president Michael Peevey has accepted $165,182 worth of gifts and travel since 2007.
Records show that the gift-givers often times are nonprofits and special interest groups, which prompted the Investigative Unit to ask—are they simply gifts? Or are the gestures buying access to one of the most powerful men in California?
The forms obtained by NBC Bay Area indicate that in the last six years Peevey has accepted 16 trips each valued at more than $6,000 to places including Hong Kong, Sweden, Germany, Israel and Spain.
Peevey regularly speaks of his globetrotting adventures during commission meetings, and even joked during a May 26, 2011 meeting that he should be recognized for the miles he has logged.
“I get the award in the last month for perhaps traveling the farthest,” he said during the meeting. “Although the press is not up on all my travels.”
That final comment was welcomed with laughter from others at the meeting.
But Peevey may have spoken too soon because the Investigative Unit also found out about his big-ticket trips: a five-day jaunt to Australia in 2011 and a six-day trip to the same place in 2010, which each cost $12,577; a nine-day excursion to New Zealand in 2008 at a cost of $13,065; a week-long trip to Spain in 2009 at a cost of $14,106; and a 15-day adventure to South Africa in 2007 at a price tag of $14,998.
Click here to watch a previous investigation about CPUC president Michael Peevey.
“He’s taking a lot of trips to a lot of places a lot of us would like to go,” said Bob Stern, one of California’s premiere government ethicists who helped write the state’s economic interest disclosure laws in the 1970s.
Stern reviewed Peevey’s statement of economic interests forms at the request of the Investigative Unit.
“Clearly it’s legal,” Stern said. “The question is—is it ethical? There is a big difference between the two. It always raises questions to me when you have such extensive travel. This seems like they are pretty lavish trips, as well. In my view I don’t think private groups should be providing travel for public officials.”
Forms reviewed by NBC Bay Area show that private organizations and nonprofits are picking up the tabs for the travel. A legal loophole in California law allows special interest groups, lobbyists and executives access to powerbrokers like Peevey as long as they are part of a nonprofit group that pays for the travel.
The Investigative Unit’s review of records also found that Peevey—who earns an annual salary of $132,178—spent 119 regular work days away from the office in six years. That equates to an average of nearly four weeks away from the office each year. It is unclear whether this time off was counted against Peevey's approved vacation time.
In response to a Public Records Act Request, CPUC staff counsel wrote that the Commission does not have a formal policy regarding travel paid for by non-profit groups and its requirement for accounting for days off in connection with such travel.
Peevey’s predecessor, Loretta Lynch—CPUC president from 2000 to 2002—told the Investigative Unit that utility industry representatives jockeyed for her attention by offering free travel.
“It’s wherever a commissioner wants to go, anywhere in the world, all expenses paid,” Lynch said. “Except for every step of the way, you are with a gaggle of lobbyists trying to lobby you.”
Lynch turned down trips because she said accepting them would create at least the appearance of impropriety.
“I know what goes on during those trips,” she said.
And here is a stark contrast:
During five of Lynch's years on the commission, including two years and nine months as president, her gifts and travel totaled $6,042, according to statement of economic interest disclosure forms filed with the state. That comes to about $1,200 per year.
Peevey’s $165,185 in gifts and travel during the past six years averages out to $27,530 per year. That is nearly 23 times the amount Lynch accepted.
“It’s exponentially more than what I took when I was president of the CPUC,” Lynch said. “What it says is he is being wined and dined on the lobbyists’ dimes.”
NBC Bay Area also found that of Peevey’s 16 most expensive free trips, six were bankrolled by the California Foundation for the Environment and the Economy (CFEE).
CFEE is a nonprofit organization that receives large donations from many of the utilities and energy companies Peevey regulates. It is also the same group that sponsored a conference in Napa Valley in April. The Investigative Unit met Peevey at an upscale winery in St. Helena that day when he chose not to testify about a critical safety document in front of state legislators in Sacramento.
When confronted about his decision to keep a prior commitment at the CFEE-sponsored Napa event alongside utility company representatives, Peevey denied knowing that any industry members were present. He later said “there may have been one person—I don’t know” when he was informed that a PG&E representative was on the list.
Click here to watch another investigation about CPUC president Michael Peevey.
According to Peevey’s own economic interest disclosure records, CFEE sent him to New Zealand, Ireland, Italy, Spain, China and South Africa in the past six years. The cost for those six trips totaled $63,929.
“I think it is an invidious advantage that companies with money have,” Lynch said. “As a commissioner you are supposed to look only at the facts in front of you and not who you went golfing with or on safari with, or who paid for your $300 dinner last night.”
Stern agrees and also believes the law should be changed to prevent private interests from paying for dinners, outings and world travel.
“If you interview [Peevey] he will probably say ‘I am doing nothing wrong with this,’” Stern said.
Peevey declined multiple interview requests to explain his $165,185 in gifts and travel—a move that didn’t faze Lynch.
“Knowing Mike, I am not surprised,” Lynch said. “If you take a government job you are required to be transparent. And part of being transparent is to talk to the press.”
The Investigative Unit met Peevey after a CPUC commission meeting in San Francisco earlier this month but he ignored questions regarding his economic interest forms. He walked off the commission stage refusing to acknowledge the questions from the Investigative Unit.
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