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Schwarzenegger Pulls a Cheney On CA Energy Plan

Schwarzenegger Pulls a Cheney; Aides Refuse to Identify People Who Helped Governor Draft Calif. Energy Plan

By Jason Leopold

A few days before Arnold Schwarzenegger was sworn in as the 38th Governor of California last year he stood on the steps of the capital building in Sacramento waving a broom over his head, an obvious symbolic gesture in which Schwarzenegger promised to clean up the political mess left by his predecessor, Gray Davis.

“I enter this office beholden to no one except you, my fellow citizens,” the Republican governor said when he was sworn in on Nov. 18, 2003. “I pledge my governorship to your interests, not to special interests…to those who have no those who've dropped out - too weary or disappointed with politics as usual - I took this oath to serve you…I did not seek this office to do things the way they've always been done. What I care about is restoring your trust in your government.”

That was then. This is now.

In a page torn straight out of President Bush and Vice President Dick Cheney’s playbook on government secrecy, Schwarzenegger’s aides have refused to disclose the names of individuals who helped the governor draft a plan to retool California’s energy market, a plan that appears to benefit the very same special interests Schwarzenegger said he wasn’t handcuffed to during his campaign. Moreover, for the energy proposal to work, it relies heavily on piecemeal components of the state’s old deregulation law that sparked the energy crisis and wreaked havoc on consumers three years ago.

Refusing to identify the governor’s energy advisers is identical to the stonewalling tactics employed by Vice President Dick Cheney, who, three years ago rounded up a handful of individuals, including Ken Lay, the former chairman of disgraced energy corporation Enron, to help him draft a National Energy Policy for President Bush. Cheney’s team of advisers became known as his energy task force.

When Cheney released President Bush’s National Energy Policy in May 2001 it turned out to benefit major energy corporations at the expense of the environment and consumers. Cheney has since refused requests from Congress to identify the people he met with. The vice president was sued by conservative watchdog group Judicial Watch and environmental group The Sierra Club in order to force Cheney to reveal the people he met with while drafting the energy policy. The case made it’s way to the Supreme Court last week and justices are expected to decide later this summer whether Cheney should be forced to release the names of individuals on his energy task force.

Now it appears that Schwarzenegger’s staff is also operating under a veil of secrecy. On April 27, Schwarzenegger’s aides released a letter the governor wrote to Michael Peevey, president of the California Public Utilities Commission, in which Schwarzenegger called for the state to return to a fully competitive, deregulated electricity market. A copy of the letter can be found at:

In a teleconference with reporters Wednesday, April 28, to discuss the plan, one of Schwarzenegger’s aides (who instructed reporters that his name could not be used for attribution) was asked who advised Gov. Schwarzenegger on his energy plan.

The aide refused to disclose the names of the individuals the governor met with nor would he say how many meetings took place before Schwarzenegger formulated an energy policy. The aide would only say that the governor had “many, many” meetings with consumer groups, legislators and experts in the energy sector.

But officials with three of California’s most prominent consumer rights groups, all of whom spent the past four years at the forefront debate surrounding the state’s energy issues, said they never met with Gov. Schwarzenegger or anyone from his staff to discuss the governor’s future electricity plans for the state.

“We never met with him, never,” said Bob Finkelstein, the executive director of The Utility Reform Network, a San Francisco based consumer. “Either somebody in (Schwarzenegger’s) office decided they knew what the consumer groups were going to say about his plan or the governor came to the conclusion that he didn’t care about consumers.”

Finkelstein said consumer groups are wary of Schwarzenegger’s energy plan because it calls for a complete return to retail competition, which was supposed to reduce electricity costs for consumers and businesses, but ended up costing the state as much as $70 billion due to a flawed design that allowed energy companies to manipulate the market.

“It’s almost 10 years to the day since we unleashed competition in California,” Finkelstein said. “If we do it again following the same pattern history will repeat itself and we can’t afford to do that again.”

The issue is of particular concern now because the state’s grid operator said it’s likely there won’t be adequate supplies of power come this summer if high temperatures blanket the state, which is what the National Weather Service is predicting.

Still trying to find out who Schwarzenegger met with, Doug Heller, the executive director of The Foundation for Taxpayer and Consumer Rights in Santa Monica, said he, Finkelstein and Michael Shames, the director of San Diego based consumer group Utility Consumers Action Network took part in a conference call hosted by a few of Schwarzenegger’s aides just 15 minutes after the same aides briefed reporters April 28.

Heller, Finkelstein and Shames asked one of the aides whether consumer groups were consulted before Schwarzenegger’s letter made it’s way to PUC President Michael Peevey.

Heller said one aide, Dan Skopec, Schwarzenegger’s Deputy Cabinet Secretary for Energy, assured them that consumer groups were consulted before the governor put his plan in writing.

“We asked what group he met with but Skopeck said he couldn’t tell us because it was privileged information,” Heller said. “But if they didn’t meet with the three of us than who did they talk to?”

Skopec could not be reached for comment. But Terri Carbugh, a spokeswoman for Schwarzenegger, said it’s very likely that there was a miscommunication between Schwarzenegger’s aides and the consumer groups and reporters.

“This is a governor that favors open government,” Carbaugh said. “I can’t imagine that the people he met with would be a secret.”

Heller, however, is not so sure.

“I suspect that Schwarzenegger is doing what politicians do,” Heller said. “Get advice from the donors and interests that support him and don’t tell anyone about it. The fallout is that he is putting forward an agenda to force small business and consumers to pay high interest rates and setting the stage for the next set of blackouts and energy company gouging.”

By late Friday, Carbaugh was unable to round up a list of names of the people who met with Gov. Schwarzenegger and helped him draft his energy plan because the governor’s advisers who are privy to the information had already left for the weekend.


(C) Jason Leopold 2004

- Jason Leopold spent two years covering California's electricity crisis and the Enron bankruptcy as bureau chief of Dow Jones Newswires. He recently finished a book about California's electricity crisis. He can be contacted at This story is available for republication, please contact the author by email.

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