governor's goons are trying to discredit critics of his energy gaffes by
leveling personal attacks against them.
By Jill Stewart
Governor Perfect Hair
One thing I love about my work is picking up the phone and calling
anyone I please, no matter how high or low their rank. Often, they get right on
the line and we have a bit of a chat. What I learn allows me to illuminate
readers about issues I find terribly juicy or deeply confusing, and the energy
crisis is both.
I spoke recently to key journalists, lawyers and state officials
who've been busy snipping through thick layers of secrecy built up by Governor
Gray Davis to keep the public from understanding the mess he's created.
Davis desperately needs secrecy so he and his
horde of consultants can pursue his throwback energy policies and cut asinine
long-term power contracts, all without one whit of independent critique or
public debate, and all carefully designed to ensure that He of the Perfect Hair
comes out looking blameless.
Davis' secrecy scheme worked for quite a
while. The polls and media were very good to him. Most journalists fell hard
for his artful theater, in which Perfect Hair's crack speechwriters scripted a
believable scenario that had Davis righteously blaming out-of-state energy
suppliers, especially in dastardly Texas.
But it turns out that trying to cover up the energy boondoggle is
about as intelligent as yanking a movie curtain shut just when the true killer
is being revealed. Control freak Davis is finally getting hammered, and I
cannot think of anybody who deserves a few ball-peen whacks more richly that
he. For the first time in a decade, the top newspapers and other media banded
together to get access to meetings and documents that should have been public.
That kind of legal challenge hasn't hit a governor since George Deukmejian
refused to show his appointments calendar to the L.A. Times.
Dow Jones Newswires' Jason Leopold, one of the most aggressive
reporters on the energy crisis, ticks off a crescendo of hits on Davis:
"Secretary of State Bill Jones revealed that Davis' top consultants bought stock in
companies the state was negotiating with, and I could kick myself because those
documents were there if I had done the legwork," he says. "State
Controller Kathleen Connell announced she was not going to pay the $50,000
[monthly] salary to Davis' two political operatives, Chris Lehane
and Mark Fabiani, because they weren't doing state business. Then Connell
refused to pay an $11,000 bill for "emergency' meals for state
negotiators, including $1,000 for sushi. For sushi! The L.A. Times broke the story about Davis' five consultants getting fired due to
conflicts of interest in owning stock. I broke the story that Steve Maviglio, Davis' spokesman, bought
stock in Calpine and Enron Corp. during contract negotiations."
A week ago, Leopold reported that the Securities and Exchange
Commission has opened an inquiry into possible insider trading by Davis' team. The Times came out with the SEC story two days later.
"The Times got
the credit for that story," says Leopold, "but frankly I don't care
who gets credit. I just want to see the media jump harder on this crisis. For
most of the past year, the media has done a pretty bad job by just believing the administration. For
months the media just bought the "We won't need to raise electricity
rates' and "Caused by outside forces' lines."
Leopold touches on a fascinating phenomenon: Davis' success at drawing attention away from
his huge missteps by creating an other.
Although Connell agrees that out-of-state generators formed a
cartel and took advantage our new "deregulation" laws, she lays much
of the blame for the crisis on Davis. She says the governor is using chapter
and verse from the book Spin Cycle,
which details how Bill Clinton's spin-meisters (including Lehane and Fabiani)
turned the Monica Lewinsky scandal into a triumphant slam on Clinton's detractors and saved the Clinton presidency.
Says Connell, "Just as in Spin
Cycle, the governor's people immediately move to discredit those who
make critical comments about the governor, by making personal attacks on those
people, which diverts the issue away from their boss, Gray.
"The attacks are done through Davis staffer Garry South, because as Spin Cycle says, it should never be done
by the anointed person but by a third party. Then the governor's people try to
ingratiate themselves with one or two media [people] by giving them access to
exclusives. It's a fascinating transference technique."
When the governor's "nice quiet
summer of no blackouts and cool weather suddenly turned out to be not a nice
quiet summer for Davis at all," as Alexa
Haussler of the Associated Press so aptly described it to me, Gray's
intermediaries began their attacks.
They slammed respected Secretary of State Bill Jones (as a blindly
partisan Republican who just wants Davis' job). They attacked Connell (as just a
bitter, unhappy person because she lost the Los Angeles mayor's race). They even targeted
journalists such as Leopold (you can't trust him because he's little more than
a business-wire version of Matt Drudge).
Last week, Davis ramped up his defensive strategy to
Def-Con Four. Maviglio announced he was selling his stock in Calpine at a
$1,300 loss, and Davis' office put out a press release stating
that Leopold erred in breaking a controversial Dow Jones story and was going to
issue a retraction. The scoop concerned Viju Patel, an executive manager at the
state Department of Water Resources. Leopold's story alleged that Patel oversaw
long-term power contract negotiations with a company that won a $4 billion
deal, and Patel owned stock in the company.
Davis aide Hilary McLean and the chief of the
Department of Water Resources insisted that Leopold was dead wrong. Says
Leopold, "They actually had me convinced Viju Patel was a secretary type
who set up chairs and was in charge of the copy machines and facilities. They
simply insisted. They were certain."
Leopold agreed to retract his story if they turned out to be
right. But Leopold says he found that he
was mostly right: Patel's job was to make sure the contracts were signed in a
timely manner and communicated to awaiting state workers. Patel had access to
"I was fxxxxxx pissed once I realized they had convinced me I
was wrong, and it wasn't true," says Leopold. "I was never spun like
that, and boy did they do a good job."
But even precision pressure on individual journalists couldn't
save Davis from the onslaught of the past week led
by Jones and Connell.
Connell is a number-sniffing toughie. She won most of the 20
mayoral debates I attended, but could not beat James Hahn or Antonio
Villaraigosa because she jumped into the fund-raising race five months too
late. She has been a Davis critic since she took over his old
controller job and found his department in shambles.
Connell refused to cut checks to pay Davis' political attack dogs, Lehane and
Fabiani -- $50,000 for one month of advice. Lehane and Fabiani got hauled into
court by a citizen who called their hiring an obvious conflict of interest
because they were also regular strategists for Edison. With Connell refusing, the pair agreed
in court to forgo the 50 grand.
Connell also refused to pay an $11,000 bill for takeout food
submitted by Davis' energy negotiators as an
"emergency" food cost incurred during hectic power-buying
negotiations, including the $1,000 for sushi alone.
Now Connell is pointing her six-shooters at Saber/Blackstone, the
secretive financial firms trying to sell Davis' financial strategy and the Edison bailout during presentations to Wall
Street. Saber/Blackstone have "tremendous
influence on who will profit from California's energy plan," says Connell.
"I am asking the Securities and Exchange Commission whether
Saber/Blackstone should disclose [their] holdings in energy companies."
She is also slamming the Department of Water Resources, which Davis wants to turn into a huge power
authority, forcing California even further backward in time as other
states move ahead on true deregulation.
"The administration wants to take powers away from the Public
Utilities Administration and give them to Water Resources, a scandal-ridden
backwater that is filled with trouble," warns Connell. "Gray Davis is
making an effort to maintain the tremendous veil of secrecy, even on such
public issues as rate-setting, by burying it deep within a new
Remember, California never got deregulation. We got a bizarre
reregulation hybrid with far more regulations than before. Much of
it was written by Edison and Pacific Gas & Electric consultants in a closed
room with legislators like Assemblyman Steve Peace (D-Chula Vista). These
screw-ups are the same crowd
forming Davis' new plan to turn the Department of
Water Resources into a power monolith that represses "green" energy
like it was 1952.
"History is repeating itself," says Leopold, "with Edison overseeing the backroom dealings between
the legislators and Davis, secret deals nobody can find out about, legislation
hammered out behind closed doors -- exactly
how they created deregulation in 1996."
As I have explained in the past, "deregulation" blew up
partly because the big power monopolies in 1996 were allowed to fill the
deregulation bill with loopholes they believed would give the big monopolies a
leg up over green energy suppliers and out-of-state competitors.
But as Peter Navarro, a UC Irvine professor of economics and
public policy, points out, "The big monopolies have no deep understanding
of the open market because they have never operated in an open market. They did
not understand the effect their provisions would have, and things turned
Their doom was sealed when the PUC ruled that the monopolies all
had to break up and sell their power plants.
Foolish Davis is demanding that the reluctant
legislature back a huge public bailout of Edison. Moreover, our once-fat state treasury
has been drained of an incredible $50 billion to buy power. For $50 billion,
Gray Davis last fall could have supplied every home in California with free compact fluorescent light
bulbs, free R-35 insulation in walls and attics, a complimentary
energy-efficient refrigerator and a very large shade tree.
Instead, Perfect Hair got us sucked into secretly arranged
long-term contracts in which California must buy energy for the next decade at
As the Wall Street Journal's John Emshwiller told me, "The last
time I interviewed Davis, he said that his long-term contract negotiators
were like a T-ball team against the New York Yankees. So, gee, he lets the
T-ball team go make deals on $43 billion in long-term contracts and $9 billion
in spot purchases? That's committing an extraordinary amount of money in a very
Several media outlets revealed in July that because power demand
has leveled off, the state is selling the long-term energy it got stuck with back to out-of-state generators and other
power suppliers. The loss, as of press time, was $34 million and counting.
Gray Davis' energy strategy appears to be backfiring like an old
gas-guzzling pickup. But even if the scandal and horrendous missteps in his
administration turn out to be "bigger than Quackenbush" (as Leopold
suspects), Californians will probably still get stuck with a bloated new public
power overlord and a huge bill for the bailout.
hope is that after this nauseating Spin
aspirations for the presidency will get sucked down the drain.