Buying power - Page 3

How PG&E and Mercury Insurance are spending millions to try to trick Californians into voting for corporate interests



Mercury was one of the major industry players challenging Prop. 103 in court. The company also deftly worked the political system, most scandalously through former Senate President Pro Tem Don Perata, a Democrat now running for mayor of Oakland. Mercury not only gave extensive political contributions to Perata, who then carried legislation for Mercury, including a bill to basically do what Prop. 17 would do, but a San Francisco Chronicle investigation in 2004 found that Mercury's cash allegedly went into Perata's personal account in a money-laundering scheme that reportedly triggered an FBI investigation and raid on Perata's house (no charges were ultimately filed).

Rosenfield described how the company operates in the political arena: "Mercury realizes it's going to lose the civil suit, goes to Sacramento, spreads a fortune in campaign contributions, and lo and behold, gets a bill passed overriding this provision of Prop. 103, legalizing its surcharges. [Gov. Gray] Davis vetoes it in 2002 on the grounds it violates Prop. 103. Another year goes by, Mercury spreads even more money around, and this time Davis is in a recall election and needs Mercury's money. So he takes the money — it's $100,000 or more — and Davis signs the bill. We have to go to court and challenge the bill as an unconstitutional amendment to Proposition 103, which we finally succeed in doing and it's upheld by the Court of Appeals in 2005. All that time, Mercury is overcharging people. Ultimately, Mercury is told that the law you sponsored is invalid and you can't do it anymore, so it stops in 2005 — 10 years of wanton, brazen violation of the law. And that brings us to the Mercury initiative."

Joseph refused to talk to us (he grants almost no press interviews) and Mercury spokesperson Coby King referred questions to Kathy Fairbanks, who heads the Mercury-sponsored Cal-FAIR.

But when we noted that this group is supposedly independent of Mercury, and that my questions were about the company's history of hostility to Prop. 103, King finally made this comment: "Prop. 103 is the law of the land, but to the extent there are improvements that can be made that are pro-business and pro-consumer, Mercury has not been shy about acting in the public interest."



Another corporation that has not been shy about flexing its muscle in the political arena is SF-based PG&E, California's largest and most influential utility company. It is single-handedly bankrolling the Yes on 16 Campaign. Dubbed the "Taxpayers Right to Vote Act," Prop. 16 was crafted by a Sacramento public relations outfit and law firm that have long histories with PG&E. Its goal: end the expansion of public power in California.

The utility has amassed a war chest of funding to sink into passing Prop. 16, which would make it difficult for municipal governments to break into the electricity business by requiring a two-thirds vote at the ballot before any such efforts could get underway.

Last month, PG&E executives notified shareholders that the estimated $35 million expenditure for the Prop. 16 campaign would affect individual share values by 6 cents to 9 cents. Following on the heels of this news brief was the revelation that PG&E CEO Peter Darbee received a total compensation of $9.4 million in 2009, reflecting a 9 percent pay spike from the previous year, according to the Associated Press.

Since PG&E Corp., the parent corporation, derives 100 percent of its revenue from PG&E Co., the utility company regulated by the California Public Utilities Commission, critics have argued that PG&E is using ratepayers' money to finance a campaign ultimately designed to limit ratepayers' ability to choose their electricity provider.

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