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California Focus: Corruption going unpunished in state

The well-documented “fix-is-in” proceedings which forced consumers to pay more than 70 percent of the cost of shutting down the San Onofre Nuclear Power Station were one form of corruption in state government for which no one has yet been punished in a meaningful way.

Similarly, when proof reached the highest levels in state government that the California Energy Commission was in serious conflict of interest when it handed out tens of millions of dollars in grants to build hydrogen car refueling stations just over two years ago, no one was punished. Gov. Jerry Brown even reappointed the commission chairman to a new term.

These problematic actions were exposed by media, including this column. New forms of corruption by state officials have been exposed more recently by the state auditor and the Department of Finance, involving both the University of California and the state’s Board of Equalization, which has many tax-collection functions.

Taken together, the incidents indicate corruption is probably rampant in state government. It’s hard to determine just how widespread, because it almost always takes a whistle-blower or informant to expose such wrongdoing. Reporters and auditors can’t simply walk into a state office and ask the receptionist to take them to the most corrupt individuals there. That doesn’t work.

What’s clear is that corruption takes many forms and cheats taxpayers and consumers of many millions of dollars, possibly billions.

In the Energy Commission’s case, the consultant who designed the map for placement of hydrogen stations and then trained state employees in evaluating grant requests based on that map resigned after his blueprint was approved. He then set up a new company which applied for grants and won many. Could a grant applicant have been in a more favored position?

The San Onofre “settlement” agreed to in a secret meeting between Southern California Edison Co. officials and Michael Peevey, a former president of Edison who headed the Public Utilities Commission at the time of the meeting, dunned consumers more than $3 billion. Could a company have been in a more favored position? For sure, public hearings held later about this settlement were completely irrelevant, as the outcome had already been determined.

This spring’s revelations about UC and the Board of Equalization involved completely different forms of corruption. At UC, the auditor reported, President Janet Napolitano’s office spent $175 million less over a period of years than it budgeted for, then asked for budget increases based on the previous over-estimated budgets and not on actual spending, in effect maintaining an unreported slush fund that could be used for almost anything. The auditor also charged that Napolitano’s office interfered with the audit process, later softening her words by saying “nothing nefarious” occurred.

Nothing nefarious? What were students to think as they learned about this spare cash at the same time their tuition rose?

Said Democratic Assemblyman Kevin McCarty of Sacramento, “We’re jacking up tuition for…families, we are squeezing access and at the same time (they) are sitting on this $175 million suitcase in the corner.”

A fourth form of corruption was discovered by state Finance officials at the Board of Equalization, where elected members were found to have spent prolifically on their office furnishings, misused tax collectors for things like parking management at political events and interfered with some tax cases.

This board has long been a sinecure for termed-out legislators like all four current elected members, former Democratic lawmakers Fiona Ma and Jerome Horton and ex-GOP legislators George Runner and Diane Harkey. It has also served as a stepping stone to statewide office for the likes of Controller Betty Yee and Treasurer John Chiang.

While no one knows just how rampant these types of corruption are in state government, it is clear they are not confined to just one agency, and generally go unpunished. The fact that examples like these turn up almost every time investigators take a close look at an agency is one indication that a wide-ranging house-cleaning is in order.

Here’s a question for the many declared and potential 2018 candidates for governor, none of whom has yet spoken out about any of this: What will you do about the well-proven and established climate of corruption that’s persisted for many years under the last several governors?


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