Joe Neilands and Harold Ickes describe how PG&E has Hetch Hetchyed San Francisco for decades
By Bruce B. Brugmann
Le me add my own Best of selection to our splendid Best of issue this year. It;s a Guardian story with all the elements of great story: It has drama, intrigue, corruption, a cast of characters from John Muir to Hiram Johnson to Harold Ickes to Mayor Newsom, a classic battle between progressives and conservationists, a breathtaking theft of a major public asset by a private corporation, and a long sordid history that continues to this day in San Francisco.
Three years after my wife and I founded the Guardian in 1966, a UC-Berkeley professor by the name of J. B. Neilands came to our tiny Guardian office and offered me a big story. I quickly looked it over and said, Joe (he was known as Joe) this is an incredible story.
Why can’t you get it published in the Chronicle or the Examiner or another major news outlet? Why me? Why the Guardian?
“Nobody will touch it,” said, shaking his head sadly. “It’s too big a scandal. It’s up to you to publish it. If you don’t publish it, nobody else will.”
And so started the saga of what we came to call the PG@E/Raker Act Scandal, the biggest urban scandal in American history. Joe had buried the lead and put some professorese but he had done the research, he had nailed the story and the culprits, and all it needed was some editing, which I was happy to do. Joe and the Guardian had an astounding scoop which no other local paper would publish then and few publish to this day.
The story appeared in our March 27, l969 edition under the fold on the front page. And we have followed it up through the years with literally hundreds of stories, editorials, cartoons, graphics, and charts. . Virtually everyone who worked in Guardian editorial has covered or researched a piece of this story.
The head: “How PG@E robs S.Fl of cheap power”
The lead: “A few months before he died last year, Frank Havenner sat up in his bed in a nursing home in San Francisco and told me of how the Pacific Gas & Electric Co. swindled San Francisco out of hundreds of millions of dollars of cheap hydroelectric power.
“The story was incredible: PG&E and its political allies had defeated eight successive bond issues to establish a municipal electric system in San Francisco and grant city residents and businesses the benefit of low cost power produced by the city’s Hetch Hetchy water system in the Sierra.
“The result: San Francisco has paid through the nose to PG&E for its power and the city loses about $30 million a year in profits it would get from a public system.”
The key quote: Joe research turned up a magnificent phrase used by then U.S. Interior Secretary Harold Ickes in a speech to the Commonwealth Club in 1944 in support of a city bond issue to buy out PG@E. Said Ickes: “The disgraceful history of the handling of Hetch Hetchy power should place a new verb in the lexicon of political chicanery: ‘To Hetch Hetchy’ means to confuse and confound the public by adroit acts and deceptive words in order to turn to private corporate profit a trust set up for the people.”
“I need not repeat the scandalous story thas has given birth to this new verb, but I would remind you that the last chapter of it has not been written. The pledge that the people of San Francisco, with full knowledge, made to their government has not yet been redeemed.” Ickes was making the point that San Francisco was in violation of the public power mandates in the federal Raker Act that and he had sued the city in federal court to force the city to bring its Hetch Hetchy public power to establish a public power system in San Francisco. .
A key Examiner editorial quote: Joe even found the Examiner, then a strong supporter of the dam and public power, stating that “It is a wrongful and shameful policy for a grant of water and power privilege in the Yosemite National Park Area to be developed at the expenditure of $50 million by the taxpayers of San Francisco, only to have its greatest financial and economic asset, the hydroelectric power, diverted to private corporation hands at the instant of completion; to the great benefit of said corporation, and at an annual deficit to the city of San Francisco.” (The Examiner of William Randolph Hearst was of course referring to PG&E. Hearst later switched sides, as a result of getting a chunk of money from a PG@E-controlled bank, but that is another story that a Hearst biographer and the Guardian have previously disclosed.)
Joe asked James Carr, then San Francisco’s general manager of the San Francisco Public Utilities Commission,
when the city would enforce the Raker Act. Carr replied to Joe, in a letter 5l years after the Raker Act passed as the Magna Carta of public power, that it was ‘premature to discuss municipal distribution of power in San Francisco.'” Joe concluded: “In March, 1969, it still is.”
Well, in July of 2008, according to PG&E and Mayor Newsom,
it still is.
Click here to read the original Joe Neilands Guardian story on the PG&E/ Raker Act scandal.