Public Power

Hearst blacks out the PG&E scandal. Again!

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By Bruce B. Brugmann

Often, on Wednesday, the San Francisco Chronicle will run a nice color PG&E ad on the lower right hand corner of its front page.

On Wednesday, April 16, the Chronicle did not run a PG&E ad on the front page, but it did run a major story on the front page above the fold that did a major favor for PG&E.

The story by Kelly Zito focused on public power and alternatives to PG&E, largely in Marin County where there’s an active and aggressive move to create a CCA (community choice aggregation) system that would replace PG&E
as an energy supplier in ll cities.

The story once again largely ignored San Francisco and its CCA movement headed by Sup. Ross Mirkarimi. It didn’t quote Mirkarimi nor any public power or CCA leaders, but instead used a dubious expert from the University of California at Berkeley, who never supported public power and generally supports PG&E private power and deregulation efforts to undermine without rebuttal the community- based anti-PG&E efforts.
And it once again followed the longtime Hearst policy of blacking out the key element of any serious public power story: the PG&E/Raker Act scandal and the fact that San Francisco is the only city in the U.S. that is mandated by federal law to have a public power system. (See Guardian stories and editorials back to 1969.)

I don’t blame Zito the reporter. She is only the latest in a long line of Hearst reporters who ends up executing Hearst policy of coddling PG&E and blacking out the Raker Act scandal. And, after years of questioning Chronicle reporters and editors and trying to get to the bottom of Hearst’s incessant censorship of and capitulation to PG&E, I really don’t know who to blame. But let me ask the questions again: who censors Hearst stories on PG&E as a matter of Hearst policy. The reporter? The city editor? The top editor? The publisher? Hearst corporate? Anybody over there?

In any event, I would much rather have a straightforward PG&E ad on the Chronicle front page, properly labeled PG&E, than stories that omit the Raker Act scandal and slant the stories for PG&E and against public power. B3

Click here for this week’s editorial, PG&E’s attack on CCA.

Click here for this week’s editorial, The floating peakers: An energy solution on the Bay?

Click here for The shame of Hearst

Take that, PG&E!

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And congratulations go out to San Joaquin Valley Power Authority, which has reached a settlement agreement with PG&E over how the utility company has been behaving itself with regards to Community Choice Aggregation (CCA.) Best part: PG&E has to pay.

I’m giving a nod to the Associated Press here, which described SJVPA as a “public electricity cooperative,” because that’s essentially what a CCA is – a group of cities and counties getting together to buy or build their own power, and then run it through the grid that’s already established. Many CCAs say they can bring us cheaper, greener power. According to Tim Rosenfeld, who’s working on Marin’s CCA, “Public power can simply do things cheaper than investor-owned utilities.” For example, he says, the cost of financing a new power plant is about 5.5 percent for a municipality issuing a bond, and it’s more like 12 percent for a private company. “Apples to apples, building the same power plant we have a huge cost advantage,” said Rosenfeld.

As one might imagine, PG&E has some issues with CCAs because it means losing customers, and they’ve been lobbying hard against them throughout their service territory. They were so effective in San Joaquin that Fresno and Tulare backed out of the deal, meaning the SJVPA had less customers.

As we reported last year, SJVPA filed a complaint with the California Public Utilities Commission, which had already decided that it was a conflict of interest for utilities to expound on the pros and cons of CCAs, and if they were going to bitch about it they better do it with their shareholders’ piggy banks. SJVPA had evidence to the contrary and now they’ve settled with PG&E. The terms: PG&E agrees to make sure their investors pay for the marketing and lobbying and that said lobbying will be “truthful and non-misleading” – which makes my job more boring. Best part: they’re also paying up to $450K of SJVPA’s litigation fees.

The other interesting aspect of this is PG&E admits they changed horses midstream.

Dark days

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› amanda@sfbg.com

› sarah@sfbg.com

Like a lot of San Franciscans, John Murphy wants to put solar panels on his roof. He’s worried about the environment, but it’s also about money: “I want it to pay for all my electricity,” he said one recent evening as we chatted in front of his house.

Murphy pays top dollar for power from Pacific Gas and Electric Co., every month hitting the highest tier of energy use and getting spanked 34 cents a kilowatt hour for it. He’s tried to cut costs by switching to energy-efficient appliances and light bulbs with motion sensors — with little incentive from PG&E’s billing department.

Murphy thought installing solar panels would be worth the up-front cost, especially if federal and state rebates made it more feasible. His roof — sturdy and pitched toward the south, unshaded by trees or other buildings, and located in the fogless hollow of the Mission District — seemed perfectly suited for solar energy.

So last fall he invited a representative from a local solar installation company to the house for a free consultation. He was told his roof could only fit a 2.8 kilowatt system, which would cover about 60 percent of his energy needs — and cost about $25,000.

Murphy is apoplectic about the results. “What’s 60 percent? That’s like going out with her for three-quarters of the night. I want to take her home,” he said.

While the federal incentive shaves $2,000 off the cost, the state rebate program — in place since January 2007 — is a set allocation that declines over time: the later you apply, the less you get. Today Murphy can get about $1.90 per watt back from the state, whereas at the start of the program it was $2.50 per watt. To him, the upfront costs are still too steep and the results won’t cover his monthly PG&E bill.

“The snake oil salesmen of yesterday are the solar panel installers of today,” Murphy said.

But Murphy still wants to install panels — and he’s not alone. The desire for clean, green energy runs deeply through San Francisco and the state as a whole. After the launch of the California Solar Initiative, the number of solar megawatts, represented by applications to the state, doubled what they’d been over the last 26 years. Almost 90 percent of the installations were on homes, indicating that citizens are jumping at the chance to decrease their carbon output.

Yet in San Francisco, where environmental sentiment and high energy costs ought to be driving a major solar boom, there’s very little action.

Back in 2000, then-mayor Willie Brown announced a citywide goal of 10,000 solar roofs by 2010. That would add up to a lowly 5 percent of the 200,000 property lots within the city of San Francisco.

But even that weak goal seems beyond reach: it’s now 2008, and the number of solar roofs in San Francisco stands at a grand total of 618 installations by the end of 2007. In terms of kilowatts per capita, the city ranks last in the Bay Area. The city’s total electricity demand runs about 950 megawatts; only 5 megawatts is currently supplied by solar.

 

WHAT’S WRONG?

Well, it’s not the weather. While heavy cloud cover can hinder panels, fog permits enough ambient light to keep panels productive. San Francisco’s thermostat isn’t much of a factor either — panels prefer cooler temperate zones, not blazing desert heat.

It’s also not for a lack of political ideas — Mayor Gavin Newsom is pushing a major solar proposal and several others are floating around, too.

But Newsom is clashing with the supervisors over the philosophy and direction of his plan. It’s complicated, but in essence, the mayor and Assessor-Recorder Phil Ting put together a task force that included representatives of solar installers and PG&E — but nobody from the environmental community and no public-power supporters.

The plan they hatched gives cash incentives to private property owners, takes money away from city-owned solar installments, and does nothing to help the city’s move to public power.

While all this plays out, the solar panels so many San Franciscans want aren’t getting installed.

 

SUN AND SUBSIDY

What makes solar work, according to local solar activists, is a combination of sun and subsidies. “Almost every area in the United States has better sun exposure than Germany, and Germany is leading the solar market worldwide today,” said Lyndon Rive, CEO of Solar City, a Foster City-based solar installer.

The price per kilowatt hour, with current state and federal subsides, is about 13 cents for solar, just two cents more than PG&E’s base rate for energy produced mostly by nuclear power and natural gas.

Still, the average installation for the average home hovers between $20,000 and $30,000. For many, that kind of cash isn’t available.

“The biggest reason for lack of adoption [of solar energy] is that the cost to install in San Francisco is higher than neighboring cities,” Rive said. It’s about 10 percent more than the rest of the Bay Area, according to a December 2007 report of the San Francisco Solar Task Force.

Why? According to Rive, system sizes are smaller. Solar City’s average Bay Area customer buys a 4.4 kilowatt system, but the average San Franciscan — with a smaller house and smaller roof — usually gets a 3.1 kilowatt installation. The smaller the system, the more the markup for retailers amortizing certain fixed costs such as material and labor. On top of that, San Francisco’s old Victorians can have issues — weak rafters need reinforcement; steep roofs require more scaffolding; wires and conduits have to cover longer distances. It adds up.

“There’s an extra cost to doing business in San Francisco,” said Barry Cinnamon, CEO of Akeena Solar and a member of the SF Solar Task Force. “I can expect $100 in parking tickets for every job I do.”

That was the motivation for Ting to establish the Solar Task Force in 2007, with the goal of creating financial incentives, including loans and rebates, to bring down the costs of San Francisco solar. The 11-member task force came up with an ambitious program that involved a one-stop shop for permits, a plan to give property owners as much as $5,000 in cash subsidies, and a system to lend money to homeowners who can’t afford the up-front costs.

The task force said installing 55 megawatts of solar would combat global warming, improve air quality by reducing pollution caused by electricity generation, and add 1,800 green collar jobs to the local economy.

The streamlined permit program is in place. None of the rest has happened.

 

THE MAYOR’S MONEY

The first obstacle was the loan fund. Newsom and Ting wanted to take $50 million currently sitting unspent in a bond fund for seismic upgrades on local buildings. Sup. Jake McGoldrick wanted to know why the money wasn’t being used to upgrade low-income housing; the city attorney wasn’t sure seismic safety money could be redirected to solar loans.

Then Newsom decided to take $3 million from the Mayor’s Energy Conservation Fund to pay for the first round of rebates. Over the next 10 years, that could add up to $50 million. McGoldrick balked again. That money, he said, was supposed to be used on public facilities (like solar panels at Moscone Center and Muni facilities and new refrigerators for public housing projects). Why should it be diverted to private property owners?

There’s a larger issue behind all this: should the city be using scarce resources to help the private sector — or devoting its money to city-owned electricity generation? “In 10 years, there could be $50 million in the fund,” McGoldrick said. “That’s a lot of money, and it’s power the city could own.”

Sup. Chris Daly agrees. “I would support this program if we were running out of municipal [solar] projects,” he said. “But we’re not.”

In addition, the progressive members of the Board of Supervisors, who have all advocated a citywide sustainable energy policy known as community choice aggregation, or CCA, weren’t represented on the Solar Task Force.

The fund Newsom wanted to tap for his project is also the source of funding for the community choice aggregation program, which the progressive supervisors see as the city’s energy plan, which in turn constitutes a far more comprehensive response to climate change, with a goal of relying on 51 percent renewable energy by 2017.

Sup. Gerardo Sandoval is working on a loan program that would allow residents to borrow money from the city for renewable energy and efficiency upgrades for their homes and pay it back at a relatively low interest rate folded into their monthly tax bills. (See “Solar Solutions,” 11/14/07.) Sandoval’s plan would enable loans of $20,000 to $40,000 at 3 percent interest to people who voluntarily put solar on their homes.

The city of Berkeley is pursuing a similar plan. But the task force never consulted Sandoval — in fact, he told us that he had no idea Ting’s task force was meeting until a few months ago.

The supervisors’ Budget and Finance Committee is slated to review Newsom’s plan April 16.

Solar installers aren’t happy about the delays: “I’m on the disappointed receiving end of that start and stop,” Cinnamon said.

While city officials duke out where the money should come from and who gets it, San Franciscans interested in purchasing panels are left in limbo. Jennifer Jachym, a sales rep from Solar City who used to handle residential contracts in San Francisco, said, “I have worked all over the Bay Area and I’d have to say it seems that the delta between interest and actual purchase is highest here.

“It was hard to get people to pull the trigger,” she continued. “What the San Francisco incentive program basically did was bring the cost incentives here to where they are everywhere else.”

The holdup has dispirited customers and solar companies. Cinnamon said he wasted 10,000 advertising door hangers because of the delay. Solar City also put on hold a handshake deal with the Port of San Francisco to rent a 5,000-square-foot warehouse in the Bayview District for a solar training academy that could turn out 20 new workers a month.

“As a San Francisco resident, I really want to see it happen there, but as a business, I have to think about it differently,” said Peter Rive, chief operating officer of the company. “Almost every city in the Bay Area is aggressively trying to get us to build a training academy in their city.”

 

TENANTS AND LANDLORDS

Another reason we don’t see more panels on San Francisco roofs is that most San Franciscans are renting and have no control over their roofs. “The landlord doesn’t care. They don’t pay the electric bill,” Cinnamon said. When asked if there were any inroads to be made there, he said, “Nope. That’s not a market I see at all.”

In spite of that, solar companies still are eager to do business here, which means there’s either enough of a market — or enough of a markup.

Rive wouldn’t tell us their exact markup for panels, but said, “The average solar company adds 15 to 25 percent gross margin to the installation. Our gross margin is in line with that.”

Rive’s company has another option for cash-poor San Franciscans, a new “solar lease.” In this scenario, Solar City owns the panels and leases them to homeowners for 15 years. The property owner pays a low up-front cost of a couple of thousand dollars and a monthly lease fee that increases 3.5 percent per year.

For Murphy, the price would be $2,754 down and $88 a month. The panels would still cover only 64 percent of his energy needs, so he would owe PG&E about $70 a month. Because he would be using less energy, PG&E would charge a lower rate, which is something Solar City typically tries to achieve with a solar system.

However, people can’t make money off their solar systems. “People ask about it all the time,” Jachym said. “Especially people in San Francisco. They say ‘I have a house in Sonoma with tons of space. Can I put panels there and offset my energy here?'”

The answer, unfortunately, is no, which means San Franciscans have no incentive to put up more panels than they need and recoup their costs by selling the energy to the grid. Unlike Germany, for example, where people are paid for the excess solar energy they make, California’s net metering laws favor utility companies. If you make more power than you use, you’re donating it to the grid. PG&E sells it to someone else.

If the law was changed — which could be a feature of CCA — citizens could help the city generate more solar energy to sell to customers who don’t have panels, helping the city to meet its overall goal of 51 percent renewable by 2017.

Under Solar City’s lease program, the company gets the federal and state rebates. If Murphy leased for 15 years he’d have an option to buy the used panels, upgrade to new ones, and end or continue the lease. If San Francisco launches the incentive program, the $3,000 from the city could cover the up-front cost and he could get the whole thing rolling for almost no cash. It sounds like a sweet deal.

Except it’s not going to work. Solar City only leases systems of 3.2 kilowatts or more, and only 2.8 could be squeezed onto Murphy’s roof. “I think it’s Murphy’s Law,” Jachym says wryly. “If you have a house that wants solar, a whole row of houses on the street nearby are better suited for it.”

She says the 3.2 cutoff has to do with the company’s bottom line. “If it’s any less than 3.2 the company is losing money.” Ironically, she tells me, “the average system size in San Francisco is even smaller” — usually less than 3.1. Solar City has set the bar high in a place where many people like Murphy are prevented from leasing.

He tells us he isn’t interested in a lease anyway: “I don’t own that.” He’s now more interested in a do-it-yourself situation and wishes the city would put some energy toward that. “If they were serious they would have a city solar store,” he said, imagining a kind of Home Depot for solar, where one could buy panels and wiring, talk with advisors, contract with installers, or just fill out the necessary paperwork for the rebates.

Some people are going ahead anyway, without city support. Nan Foster, a San Francisco homeowner now installing photovoltaic panels and solar water heating, says her middle-class family borrowed money to do these projects, “because we want to do the right thing about the environment and reduce our carbon footprint. It would be a great help to get these rebates from the city.

“The public money for the project would increase the spending of individuals to install solar — so the public funds would leverage much more investment in solar on the part of individuals and businesses,” Foster argued.

There’s another approach that isn’t on the table yet. Eric Brooks, cofounder of the Community Choice Energy Alliance, told us that the city, through CCA, could buy its own panels to place on private homes and businesses, giving those homes and businesses a way to go solar — free.

“Clearly there would be a much higher demand for free solar panels over discounted ones that are still very expensive,” he said. “And because the panels would be owned by the city, all of the savings and revenue could be put right back into building more renewables and efficiency projects, instead of going into the pockets of private property owners.”

Proponents of the mayor’s plan argue that the city can build more solar panels — faster — by diverting public funds to the private sector. “While on its face this is technically true, it is actually a dead-end path,” Brooks said. “Yes, a little more solar would be built a little more quickly. However, once those private panels are built the city will get nothing from them.”

Full disclosure: Murphy is Amanda Witherell’s landlord.

 

A solar plan that works

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EDITORIAL Solar energy makes so much sense in San Francisco that it’s crazy this city didn’t figure out years ago how to get at least a quarter or more of its power from the sun. And it’s crazy that now, with the financial benefits of solar power improving, the technology improving, and the environmental mandate getting more profound by the day, the city still doesn’t have an effective citywide solar program.

Mayor Gavin Newsom, who wants to be known as a green mayor, has a solar proposal on the table that environmental groups like the Sierra Club are reluctantly supporting. But a lot of the supervisors have serious questions — and so do we. At its most basic, Newsom’s plan is a shift of solar resources from the public sector to the private sector and does little to promote a sustainable long-term energy policy.

There’s a way to do solar right in San Francisco, and we can outline a basic blueprint.

1. Start with all the interested parties. Assessor-Recorder Phil Ting, with Newsom’s support, created a Solar Task Force in San Francisco — but none of the supervisors were invited. The Sierra Club wasn’t invited. None of the public power advocates were invited. Instead, it was dominated by solar industry people, with Pacific Gas and Electric Company along for the ride, guaranteeing that the proposals would run into political static.

2. Make it work as part of a public power plan. The future of San Francisco’s energy policy has to start and end with the notion that PG&E won’t be the long-term supplier of commercial electricity. The city has a community-choice aggregation (CCA) plan, and any solar programs should be designed to enhance and work with that plan.

3. Don’t shortchange public generation. Newsom is asking the city to take money away from a public-sector plan, which pays for solar panels on city-owned buildings, and shift it to a private-sector program, which would subsidize homeowners and commercial landlords who want to install solar panels. We’re all for encouraging solar on homes and office buildings, and we recognize that current state and federal law are skewed toward private projects. But the city has a huge interest in building its own generation capacity: city buildings now use Hetch Hetchy hydropower, and every kilowatt that can be replaced with solar frees up Hetch Hetchy power for retail sales to local homes and businesses and increases the financial rewards of public power.

4. Use the Berkeley model for private parties. The city of Berkeley is pursuing an excellent program. Homeowners and businesses would be able to borrow money from the city at very low interest (a city can raise capital at around 3 percent these days) to install solar panels and would pay the money back over 20 or 30 years through increased property taxes. This would cost the city nothing, encourages solar installations — and still leaves room for subsidies if they turn out to be necessary.

5. Look at using CCA to buy solar panels in bulk and install them free. Eric Brooks, a public power advocate, suggests this idea, and it’s a good one. A city power agency could buy panels and offer them free to property owners, with the energy going into the city grid. The residents and businesses would see their power bills drop, and the city would see environmental and financial benefits.

6. Demand two-way meters. PG&E doesn’t allow property owners to bank power that they generate beyond what they use. That means the owner of a solar system that’s actually generating surplus money is giving power free to PG&E. The city ought to be pushing for a change in state law to demand two-way electric meters. And as part of a public power plan, San Francisco could allow homeowners and commercial landlords not only to cut their power bills to zero but also to bring in cash by installing solar-generating systems.

7. Recognize that PG&E is part of the problem, not part of the solution. PG&E doesn’t want public power. The company doesn’t want widespread solar generation. In fact, the giant private utility has no incentive to do anything that keeps it from making money by selling power over its lines. You can almost judge a solar plan by one standard — if PG&E is OK with it, it must be a bad idea.

The supervisors are right to question Newsom’s plan, and in the end, they should reject it — and create a new one that meets the key tests of an effective long-term energy program for San Francisco.

A less perfect union

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› jesse@sfbg.com

By nearly every measure, the Service Employees International Union has become a juggernaut. As the rest of organized labor has seen its share of the American workforce continue to dwindle, SEIU has brought in some 800,000 new dues-paying members in recent years. With the Democratic Party taking over Congress in 2006, the 1.9 million-member organization, rich with campaign funds, wields enormous political clout, and it will only become more formidable if Hillary Clinton or Barack Obama wins the White House in November.

But all is not well inside the labor giant. Andy Stern, the union’s president, has pushed hard for merging and consolidating local chapters into larger operations — and many SEIU members, especially here on the West Coast, say that’s turning the union into a top-down autocracy in which Stern loyalists wield undue influence and meddling officials from Washington, DC squelch dissent.

And now, the Guardian has learned, Stern operatives are using their money and organizing clout in a hard-hitting campaign — not to force an employer to the table or to toss out an anti-union politician, but to discredit another labor leader.

The campaign is part of a bruising power struggle between Stern and dissident local leader Sal Rosselli, who runs the Oakland-based SEIU affiliate United Health Care Workers West. In the past few months, union insiders say, SEIU officials, including a senior assistant to Stern, set up what one leader called a "skunk team" to undermine Rosselli’s efforts at winning key union delegate elections. At one point, the team — which involved a political consulting firm linked to big downtown businesses — discussed an opposition research file compiled on Rosselli by a health-care giant his union was fighting

And leading up to the delegate elections last month, SEIU staffers worked to promote Stern-supporting candidates, possibly in violation of union rules, while actively discouraging other union employees from campaigning. That’s led to a formal complaint alleging improper involvement by Stern’s staff in a local union election.

EMERGING TENSIONS


In 2005, Thomas Dewar went to work as a press secretary at Local 790, formerly SEIU’s biggest San Francisco outlet, which represented approximately 30,000 workers, most of them public employees. Local 790 was among the most politically progressive union shops in the country, supporting left-leaning candidates for office and progressive causes like public power. In early 2007, Andy Stern initiated a merger of 790 with nine other regional locals. The move was part of a larger consolidation in the state that saw the number of California union affiliates reduced by nearly half.

The new Northern California superlocal was dubbed 1021, as in "10 to one." Local 1021 has continued 790’s liberal activism. But right after the merger was finalized, Dewar and other sources told the Guardian, the atmosphere around the union changed for the worse.

"A lot of members had anxiety," Dewar recounted. Most troubling, he said, was the insertion of Stern appointees into leadership positions, including current president Damita Davis-Howard. "Members were upset. They saw co-workers whom they had elected unilaterally removed by a guy in DC and replaced by his handpicked appointments."

Ed Kinchley, a Local 1021 member who was appointed by Stern to the local’s executive board after the consolidation, shared Dewar’s memory of the tensions. "You had 10 different locals with 10 different ways of doing things. It’s difficult to merge all of that. A lot of people who had been elected to leadership positions were removed."

Dewar told us he struggled to adjust to his new working environment. But after his initial misgivings, he said he devoted himself to backing Stern’s vision for the combined local: "We were told over and over that change is hard. So I decided to give it an honest shot." Dewar said he worked to get good press for 1021 and to build Davis-Howard’s profile.

But early this year, tensions between Rosselli and Stern flared — and according to Dewar, top staffers at 1021 began to focus more and more of their attention on the feud.

"They were freaking out about Sal," he said.

Enraged at what he considered International meddling in the affairs of his Oakland-based local, United Healthcare Workers West, Rosselli resigned from SEIU’s executive committee in early February. He also began championing a "Platform for Change" to be voted on at the upcoming SEIU convention in June. Among other things, the Rosselli-backed slate of reforms would give local union outlets more say in proposed mergers and collective bargaining agreements. The platform, if approved, would also scrap the current delegate system for electing International officials and replace it with a one-member, one-vote structure.

According to Dewar’s account and to evidence obtained by the Guardian, top SEIU officials have been working overtime to counter Rosselli — even pushing the boundaries of the union’s own rules and colluding with political consultants who have often opposed organized labor.

‘THE ANTI-CHRIST’


In early March, Dewar said that in early March, Josie Mooney, a former Local 790 president who is now a top assistant to Stern, approached him about joining what she characterized as a "skunk team that Andy and I are putting together." Dewar recalls Mooney telling him that the purpose of the team was to counter Rosselli’s increasing popularity with the rank and file, and to sink Rosselli’s platform for the convention.

Dewar told us that Mooney asked him to join the skunk team during a brunch meeting at the Fog City Diner in early March. An e-mail exchange he shared with us shows that he and Mooney discussed having brunch at the diner on March 1.

Mooney did not return numerous calls for comment and, through an SEIU spokesperson, she declined to speak for this article. But Dewar told us Mooney promised him at the brunch that his assistance in her efforts would win him positive attention from Stern. The team, she reportedly told him, was directly authorized by Stern and "that resources would not be a problem."

Dewar said he vacillated about joining the team, torn about aiding what he considered to be an internal union smear squad. "In 1021, we’re conditioned to think that Sal Rosselli is the anti-Christ," Dewar told us. "But even still, he was still a part of the same union." A March 4 e-mail from Mooney’s SEIU e-mail account to Dewar shows her urging Dewar to make up his mind: "You have to give me your commitment. I am (as we speak) selling you at the highest levels. Don’t blow that :)."

Dewar eventually agreed to join Mooney, Tom DeBruin — an elected vice president of SEIU International — and someone Dewar said Mooney referred to as the team’s "silent partner" for a dinner meeting.

E-mails from Mooney and other attendees show that the meeting took place March 10 at Oliveto Restaurant in Oakland.

Mooney’s "silent partner" turned out to be Mark Mosher, of the enormously successful San Francisco consulting firm, Barnes, Mosher, Whitehurst, Lauter, and Partners (BMWL). John Whitehurst, another of the firm’s partners, also attended the dinner.

BMWL has worked for the SEIU since 2001. But its client roster also included Sutter Health and the Committee on Jobs. Both organizations have less-than-stellar reputations among organized labor. Nurses at 10 Bay Area Sutter hospitals recently walked off the job for a 10-day strike. The Committee on Jobs is one of the largest lobbying organizations for downtown San Francisco business interests and has fought against numerous union causes. Mosher told the Guardian by phone that, as of November of last year, the Committee is no longer a BMWL client.

THE ROSSELLI FILE


Dewar claims Sal Rosselli was the central topic of conversation at the dinner. At one point, he says, the participants discussed an "oppo research" file on Rosselli compiled by Sutter Health. The hospital giant has clashed repeatedly with Rosselli and apparently had sought to dig up dirt on him.

Whitehurst worked for Sutter in the 1990s. His efforts for the hospital chain during a ballot campaign in 1997 earned him a place on the California Labor Federation’s "do not patronize" list.

Mosher confirmed by phone that Rosselli’s file at Sutter did in fact come up at Oliveto that evening. But he said Dewar "baited" him and Whitehurst into discussing it. Furthermore, he said, Whitehurst reported that Rosselli’s file was "clean."

In fact, a March 12, 2008 e-mail from Dewar to Mosher suggests that the team focus on Rosselli’s "hypocrisy" and states, "Have we approached anyone at Sutter re: dirt on Sal? Have we been able to peek into their oppo file?"

Later that day Mosher replied, "John Whitehurst read Sutter’s whole oppo file on Sal in 1997." In a follow-up message, Mosher writes that the file "really supports the idea that he’s not motivated by money."

DeBruin did not return calls for comment. Kami Lloyd, communications coordinator for Sutter, disputed whether the oppo file even existed: "To my knowledge," she told us, "no such file exists at Sutter Health."

Reached for comment, Rosselli reacted angrily to news of the alleged "skunk team" and the fact that a research file on him, compiled by a corporation perceived to be anti-union, was being discussed among SEIU officials. "It’s shocking. It’s treasonous. For Andy Stern to be using our members’ dues money to finance [a smear] campaign against his own members in United Healthcare Workers, it’s fundamentally anti-union."

Mosher defended his firm’s involvement with SEIU. He told us that he and Whitehurst were "not brought on board to do negative things against Sal Rosselli." Instead, he said their mission has been to help tout the union’s accomplishments as it prepares to hold its convention from June 1-4 in Puerto Rico.

SEIU spokesman Andy McDonald echoed Mosher’s description of the firm’s duties. Both Mosher and McDonald brought up the fact that Whitehurst has also worked for Rosselli’s UHW union.

UHW’s Paul Kumar confirmed that Whitehurst is currently "on our payroll" to assist in a dispute against Sutter Health — the very company Whitehurst worked for in the 1990s and the same source that provided him with access to Rosselli’s research file. "These guys [BMWL] claim they are trying to reinvent themselves," Kumar said. "But to be on our payroll and to engage directly in executing a dirty tricks program … is about the most blatant violation of professional ethics I can imagine."

Whitehurst did not return calls for comment.

Dewar claimed he urged Mooney and the other attendees of the March 10 dinner to consider "appropriating" Rosselli’s democratic reforms. "The members would all wildly support it. And that way, if the International co-opted Rosselli’s ideas, then [the internal conflict] really would be about this clash of personalities, Rosselli versus Stern, instead of ideas." According to Dewar, Mosher and Whitehurst were receptive to the proposal to co-opt Rosselli’s initiatives, but that "Josie nixed it."

When we asked Mosher if he remembered this exchange from the meeting, he said his memory was "hazy" and that "a lot was being discussed that night."

Although Dewar was, by his own account, an active participant in the skunk team, he says he started to have second thoughts. The dinner at Oliveto, Dewar said, and the discussion of Sutter’s file on Rosselli, "made me want to take a shower … the cynicism I was exposed to was toxic."

One week later, he sent Mooney an e-mail informing her that, "Today’s my last day at SEIU … the circular firing squads that are now forming in the local and in SEIU nationally have left me jaded, stressed out, and depressed."

SEIU’s McDonald denied that the skunk team exists, or ever existed. He added that "the meeting [at Oliveto] was about talking about how [Mosher] could help SEIU communicate our message … within the context of the misinformation campaign being spread by Sal Rosselli and UHW’s leaders."

OUTSIDE INFLUENCE


The rancor between Rosselli and Stern has reached a boiling point in recent weeks. In compiling this story, we had to wade through reams of documents and endure long expatiations from officials and press flaks about the sins of the other side. Both factions have constructed slick, professional-looking Web sites to question the probity of their rivals, and both have coined kitschy names for their respective policy initiatives. The SEIU has countered Rosselli’s "Platform for Change" with what union leaders call a "Justice for All" platform.

But the internecine struggle may have driven Josie Mooney and other high-level SEIU staffers to do much more than vent about Rosselli or seek dirt on him from political consultants. E-mails obtained by the Guardian suggest that she and other SEIU officials worked to influence an important local delegate election last month — possibly in violation of union rules — and, some union members now allege, in violation of federal law.

Delegates selected in the election will attend the union’s international convention in June and will decide between the Rosselli’s "Change" and Stern’s "Justice" platforms. The outcome of that vote, and others like it, will shape the mammoth labor organization’s future for years to come. And the e-mails appear to show a concerted effort by Mooney and Stern loyalists to ensure that Rosselli’s dissidents don’t stack the convention and push through their set of reforms.

Referring to themselves in the e-mails as the "Salsa Team," SEIU staffers discussed strategy and coordinated campaign activity for the delegate election with high-ranking union officials like Mooney and Damita Davis-Howard, the president of Local 1021, the e-mails show. In a formal complaint, some members charge that these activities violated Local 1021’s Election Rules and Procedures — specifically Rule 18, which states that "while in the performance of their duties, union staff shall remain uninvolved and neutral in relation to candidate endorsements and all election activities."

While Rule 18 does not specifically spell out when union staff can advocate for candidates, other than proscribing such activities "while in performance of their duties," the e-mails in our possession are date- and time-stamped, and at least one was sent during normal business hours. Furthermore, the Guardian has obtained an internal memo from Local 1021 official (and apparent Salsa Team member) Patti Tamura in which she warned union staffers that the phrase "’performance of their duties’ goes beyond [Monday through Friday] and 9-5p."

One Local 1021 official who asked not to be identified told us that Tamura’s memo appeared to be a clear message that staff should stay completely out of the election. "They made it perfectly clear to the lower staff that your employment doesn’t stop [after hours]; you’re still staff. That means you don’t get involved. But now it turns out they themselves were doing it. That’s a double standard … it’s certainly not right."

The messages between Salsa Team members show them actively working to recruit potential delegates sympathetic to Stern’s platform and to aid Davis-Howard in her bid to represent the union at the June convention. One missive, dated Feb. 18, which appears to come from the personal e-mail account of Local 1021 employee Jano Oscherwitz and was sent to what appear to be the personal accounts of Tamura and Mooney, requests that a "message for Damita" be drafted.

A forwarded e-mail from that same day, from Oscherwitz to what appear to be personal e-mail accounts for Tamura, fellow 1021 staffer Gilda Valdez, and "Damita" includes a "Draft Message" with bulleted talking points, apparently for Davis-Howard to use as she "Collect[s] Signatures on Commitment Cards."

"Commitment cards" refers to pledges from union members to support certain delegates.

The e-mails go beyond merely aiding Davis-Howard and other Stern-backed candidates. They also include detailed strategy for opposing Rosselli and countering his message. A March 5 Salsa Team message includes an attached document with several talking points critical of the dissident leader. In the body of the e-mail, SEIU staffer Gilda Valdez advises Davis-Howard, Mooney, 1021 Chief of Staff Marion Steeg, and others to "Memorize the points in talking to folks." Valdez goes on to say in the e-mail that she "will be calling … about your assignments."

Reached for comment, Davis-Howard confirmed that the AOL e-mail account listed as "Damita" was hers. But she claimed no knowledge of the Salsa Team or the messages sent to her. "If you’re saying those e-mails went to my home computer, who knows if I ever even got them?"

Davis-Howard bristled at the suggestion that the Salsa Team’s activities violated union rules. "Are you trying to tell me that I can never campaign? Does it [Rule 18] say that I have to be neutral and uninvolved 24 hours a day?"

Calls to Mooney, Oscherwitz, Valdez, and Tamura were not returned. Through an SEIU spokesman, Mooney declined to comment.

A BAD AFTERTASTE


On April 4, three days after the Guardian first reported on the Salsa Team e-mails on our Web site, Sanchez and several other 1021 officials filed a formal complaint with the union’s election committee. In the complaint, they accuse Davis-Howard and the other team members of vioutf8g Rules 10 and 18 of the union’s election codes. Rule 10 forbids "the use of union and employer funds … to support any candidate."

Local 1021 executive board member and Stern appointee Ed Kinchley authored part of the complaint. According to the text, which was obtained by the Guardian, Kinchley wrote, "While telling other staff that they may be fired for any intervention in this election, Ms. Davis-Howard and the others involved secretly did exactly what they told other staff they were forbidden from doing."

The complaint was signed by 16 Local 1021 officials, including numerous members of the local’s executive board. It called on the election committee to remove Davis-Howard "from the elected Delegate list" and to bar Salsa Team members from attending the convention in June.

The issue also has landed in federal court, where UHW was expected to file against Stern and other SEIU officials, alleging interference in delegate elections.

More cynical sources both inside and outside SEIU told us they believe the Rosselli-Stern feud boils down to one thing: power — either holding onto or expanding it. But labor scholar and former Local 790 member Paul Johnston had a more nuanced perspective.

Johnston, who taught at Yale and, until recently, worked for the Monterey Bay Labor Council, told us he admired both leaders and the work each has done on behalf of the larger union. Calling the current strife "a huge can of worms," he added, "These are questions of principle and there are good ideas on both sides."

Stern’s push to increase the union’s bargaining and political clout through more consolidation, Johnston went on, "has some very positive aspects to it…. In the old days, many of these kind of mergers were done for purely political power. The mergers being conducted today [at Stern’s direction] are primarily strategic, though. But there are some power issues that inevitably arise." On the other hand, he said, Rosselli’s UHW, "is a dynamic organizing union that has [its] own issues."

A big step for public services

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EDITORIAL The battle against privatization of public resources took a big step forward this week when Sup. Ross Mirkarimi introduced a measure to create a Public Services Advisory Board to monitor what he calls the creeping takeover of city government by private outfits.

The new agency would monitor outsourcing of public services and advise the supervisors on whether it makes fiscal and policy sense to turn city programs over to businesses and nonprofits.

It’s also a chance to push forward on public power, the disaster at the zoo, the move to privatize the golf courses and some parks, Mayor Gavin Newsom’s efforts to hand the city’s information technology infrastructure over to private companies, and the Presidio sellout.

The legislation is the first public effort of a new coalition called San Francisco Commons. The group includes labor, public power, neighborhood groups, and environmental activists and was formed to address the growing problem of the loss of public sector services. It’s a crucial new addition to the city’s political scene: the first organization specifically established to protect public services and public property.

The case against privatization is clear. Private entities aren’t required to make their finances public (even if they’re doing public service work with public money). And companies doing work on city contracts are motivated by profits, sometimes at the expense of the public interest. Typically, when private operators take over public services, the prices go up, worker pay goes down, and the quality of the delivery tanks. Just look at the Presidio, a national park that’s been turned into a private real estate development, or the zoo, where privatization has led to misspent funds, poor conditions for animals, and a tragic tiger escape. Or look at Edison School, the failed experiment in education privatization in San Francisco.

San Francisco ought to be in the forefront of the antiprivatization battle nationwide, and this new group and legislation is a good first step. The agenda for the new advisory board is extensive: the panel needs to look at every large and small privatization move at City Hall. It needs to evaluate and report to the supervisors on the flaws in the mayor’s schemes. It also needs to look forward actively at ways the city can bring more essential services under public control. That includes moving forward on community choice aggregation and then developing a plan to create a full-scale, citywide public power system. Public broadband service ought to be on the agenda, too.

The supervisors should approve Mirkarimi’s bill, and the sooner the better, before Newsom finds some more of San Francisco to put on the block.

Sharing the pain

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EDITORIAL We’re generally not for cutting employee salaries to address the city’s budget deficit. And we’ve never been fond of claiming that doctors and lawyers who earn less-than-market wages working for the city of San Francisco should be penalized because they earn what appear in newspaper stories to be fat paychecks.

But Sup. Aaron Peskin was not on the wrong track when he suggested, only slightly facetiously, that Mayor Gavin Newsom ought to be looking for high-paid staffers to cut instead of slicing services for the poor. Peskin’s point was not so much that the top layers of city bureaucracy were outrageously overpaid (although a few of the mayor’s aides and some of the department heads he’s hired could fit in that category) but that all of the cuts have come at the bottom. Find 10 surplus bureaucrats making $150,000 a year and you could save the entire program that provides public-health nurse visits for chronically ill San Franciscans.

Sure, some of this is politics: Newsom is taking a stab at the mayor with a suggestion bound to win popular support. But it’s also a serious policy issue: when the city’s in the red, where should the burden fall? In Newsom’s current budget proposals, it falls almost entirely in the wrong places.

Eliminating a deficit of more than $300 million is daunting. Of course, the city wouldn’t have this problem if Newsom and his predecessors had been willing to look at obvious (and flexible) sources of new revenue. Public power alone would’ve brought in almost enough to cover this year’s shortfall (and would have earned the city so much cash during the better years that it could have been set aside in a rainy-day fund to prevent these kinds of budget roller-coasters). The city’s major taxes are a regressive mess; fixing the business tax alone (and making it more progressive) would help the economy and allow the city to raise cash from those most able to pay.

In other words, instead of axing nurses who help sick and housebound senior citizens, Newsom ought to be looking for money from the wealthy.

But right now, the mayor is talking only cuts — and for the most part, only cuts of lower-paid, front-line workers. The least the mayor could do is make a good-faith effort to share the pain. Looking for 10 useless high-paid execs in order to save public health nursing? How about former Sup. Bill Maher, who earns $144,838 out at the airport, where the last time we checked (see Here’s Bill; 5/26/06) he hardly ever showed up for work? Nine more patronage cronies, Mr. Mayor, and you’ll make the nut.

Newsom’s commission games

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EDITORIAL Mayor Gavin Newsom didn’t want Debra Walker, an artist and activist, running the Building Inspection Commission. He doesn’t want Theresa Sparks, a transgender woman and community leader, running the Police Commission. And now, we’ve learned, he doesn’t want Robert Haaland, a labor activist and one of the city’s most visible transgender leaders, to serve as vice president of the Board of Appeals.

But of course, the mayor thinks it’s perfectly fine to put two employees of Pacific Gas and Electric Company — an outfit that is suing the city, breaking the law, trying to subvert public power and cheating the public out of hundreds of millions of dollars a year — on city commissions.

This is what the second term of Mayor Newsom, who is now openly running for governor, looks like. It’s not pretty.

We knew the mayor had his sights on higher office, but now that it’s out in the open, almost everything he does at City Hall seems to be aimed not at improving San Francisco but at increasing his odds of moving up in the political world. Why, for example, would Newsom appoint Mary Jung, a PG&E customer services manager, to the Civil Service Commission, and Darlene Chiu, a PG&E City Hall flak, to the Small Business Commission? What possible qualifications could someone whose job involves promoting the interests of a giant corporation that routinely screws small business people have as an advocate for the city’s local merchants? Why would the Civil Service Commission, which deals with city employee issues, need the expertise of someone whose employer wants to prevent the city from creating more public jobs?

Why would Newsom be doing this — if he didn’t need the support of PG&E and its allies for his next political step?

Why would he be directing his appointees to keep out of leadership posts anyone with strong progressive credentials if he weren’t trying to build new bridges to the developers, the big employers, the police unions, and the more conservative interest groups he’ll need for a statewide campaign?

The bottom line is, Newsom needs to stop thinking about running his next campaign and start running the city — because this sort of commission funny business, this practice of treating important agencies that manage key city departments as nothing more than political patronage posts for rewarding allies and punishing enemies, is terrible for San Francisco.

It’s too late to do anything about Mary Jung, but the supervisors can, and should, overturn the Chiu appointment — and let the mayor know that putting PG&E executives on city commissions is unacceptable under any circumstances.

Meanwhile, the Board of Appeals votes for new officers March 19. By tradition, the top posts on the five-member panel rotate based on seniority, with an appointee of the mayor holding one job, and a board appointee the other. But Newsom’s three members have indicated that they won’t allow Haaland — a conscientious commissioner with an excellent record — to serve as vice president. That’s a slap in the face to labor, the queer community, and the supervisors. Newsom ought to show some political integrity and tell his appointees not to suddenly change the rules.

Newsom to small business: Drop dead!

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By Bruce B. Brugmann

And so Mayor Newsom, who wants to run for governor when he still hasn’t learned to manage the city as mayor,
has bestowed the ultimate insult to small business in the City and County of San Francisco.

He has named a City Hall lobbyist for PG@E to the Small Business Commission.

Yes, you read correctly, Mayor Gavin Newsom has appointed Darlene Chiu, a PG@E lobbyst in City Hall, to the SBC.

How in the world does a company that has been screwing small business for decades inside and outside City Hall, stealing our cheap Hetch Hetchy public power for decades and forcing small business and residents to buy its expensive private power, yanking upwards of $650 million a year out of the city’s economy with its high rates, corrupting City Hall for decades with its lobbying muscle, qualify as a member of the Small Business Commission?

We put the issue in a diplomatic question and emailed it to the mayor. His press secretary, Nathan Ballard,
issued this statement this afternoon on Chiu’s glowing qualifications:

“Darlene Chiu was appointed to replace Florence Alberts after her term expired. Darlene has first hand knowledge of the challenges facing small businesses in San Francisco. She grew up working in her family’s these retail businesses in Chinatown, managing nine to l5 employees. She will also bring her knowledge of City government and communications to the Commission, which will be important to the successful operations and promotion of the assistance center.” (As one small business leader told me, “I don’t recall in the requirements of being on the commission that growing up as a child of small business owners quite meets the criteria.”)

No, no, no: PG@E is placing Chiu, via Newsom, on the SBC to help PG@E continue to facilitate the “successful operations and promotion” of further PG@E corruption in City Hall to protect its illegal private power utility in San Francisco. The supervisors can and should move quickly to reject the PG@E appointment.

More: Newsom to the Civil Service Commission: Drop dead. He appointed Mary Jung, a PG@E customer services manager, to the Civil Service Commission.

Meanwhile, as he further cemented PG@E power inside City Hall, he whacked three well qualified and conscientious commissioners: Debra Walker, an artist and activist, from heading the Building Iinspection Commission, Theresa Sparks, a transgender woman and community leader, from running the Police Commission, and Robert Haaland, a labor activist and one of the city’s most visible transgender leaders, from serving as vice president of the Board of Appeals.

Newsom is running for higher office and, as our editorial in tomorrow’s Guardian puts it, “almost everythihg he does at City Hall seems to be aimed not at improving San Francisco but at increasing his odds of moving up in the political world…Why would Newsom be doing this–if he didn’t need the support of PG@E and its allies for his next political step.

“Why would he be directing his appointees to keep out of leadership posts anyone with strong progressive credentials if he wasn’t trying to build new bridges to the developers, the big employers, the police unions and the more conservative interest groups he’ll need for a statewide campaign?” B3

Questioning Matt

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Matt Gonzalez consulted few of his colleagues in San Francisco’s progressive political community before announcing Feb. 28 at the National Press Club in Washington, DC, that he’ll be Ralph Nader’s running mate on another quixotic run for president.

That’s fairly typical for Gonzalez, who has tended to keep mostly his own counsel for all of his big political decisions: switching from Democrat to Green in 2000; successfully running for president of the San Francisco Board of Supervisors in 2002; jumping into the mayor’s race at the last minute the next year; abruptly deciding not to run for reelection to his supervisorial seat in 2004; and — last year — deciding against another run for mayor while being coy about his intentions until the very end.

But if he had polled those closest to him politically, Gonzalez would have learned what a difficult and divisive task he’s undertaken (something he probably knew already given what a polarizing figure Nader has become). Not one significant political official or media outlet in San Francisco has voiced support for his candidacy, and some have criticized its potential to pull support away from the Democratic Party nominee and give Republican John McCain a shot at the White House.

In fact, most of his ideological allies are enthusiastically backing the candidacy of Barack Obama, who Gonzalez targeted with an acerbic editorial titled “The Obama Craze: Count Me Out” on the local BeyondChron Web site on the eve of his announcement (while not telling BeyondChron staffers of his impending announcement, to their mild irritation).

It’s telling that all of the top Green Party leaders in San Francisco — including Sup. Ross Mirkarimi, school board president and supervisorial candidate Mark Sanchez, and Jane Kim, who got the most votes in the last school board election after Gonzalez encouraged her to run — have endorsed Barack Obama.

Mirkarimi, who ran Nader’s Northern California presidential effort in 2000 and ran Gonzalez’s 2003 mayoral campaign, has had nothing but polite words for Gonzalez in public, but he reaffirmed in a conversation with the Guardian that his support for Obama didn’t waver with news of the Nader-Gonzalez ticket.

Mirkarimi has a significant African American constituency in the Western Addition and has worked hard to build ties to those voters. He’s also got a good head for political reality — and it’s hard to blame him if he thinks that the Nader-Gonzalez effort is going nowhere and will simply cause further tensions between Greens and progressive Democrats.

Sup. Chris Daly is strongly supporting Obama and said the decision of his former colleague to run didn’t even present him with a dilemma: “It’s unfortunately not a hard one — or fortunately, depending on how you look at it.”

Daly doesn’t think the Nader-Gonzalez will have much impact on the presidential race or the issues it’s pushing. “The movement for Obama is so significant that it eclipses everything else,” Daly told us. “This is a once-in-a-lifetime opportunity to change how politics happens in this country.”

While few San Francisco progressives argue that Obama’s policy positions are perfect, Daly doesn’t agree with Gonzalez’s critique of Obama’s bad votes and statements. “I don’t understand the argument that you should only back a candidate that you agree with all the time,” Daly said. “If that was the case, I would only ever vote for myself.”

On the national level, Gonzalez told us that he was running to challenge the two-party hold on power and to help focus Nader’s campaign on issues like ballot access for independent candidates. “If I’m his running mate, then we’ll be talking about electoral reform,” he said.

On a local level, the Gonzalez move will have a complicated impact. It will, in some ways, damage his ability to play a significant role in San Francisco politics in the future. That’s in part because Gonzalez has taken himself out of the position of a leader in the local progressive movement.

San Francisco progressives don’t like lone actors: the thousands of activists in many different camps don’t always agree, but they like their representatives to be, well, representative. That means when housing activists — one of Daly’s key constituencies — need someone to carry a major piece of legislation for them, they expect Daly to be there.

Sup. Tom Ammiano hasn’t come up with his landmark bills on health care, public power, and other issues all by himself; he’s been part of a coalition that has worked at the grassroots level to support the work he’s doing in City Hall.

Daly sought to find a mayoral candidate last year through a progressive convention. That seemed a bit unorthodox to the big-time political consultants who like to see their candidates self-selected and anointed by powerful donors, but it was very much a San Francisco thing. This is a city of neighborhoods, coalitions, and interest groups that try to hold their elected officials accountable.

Obama’s politics are far from perfect, and Nader and Gonzalez have very legitimate criticisms of the Democratic candidates and important proposals for electoral reform. But right now the grassroots action in San Francisco and elsewhere in the country — the movement-building excitement — is with Barack Obama. The activists who made the Gonzalez mayoral effort possible are now working on the Obama campaign.

In fact, Daly has repeatedly voiced hope that an Obama victory could help empower the progressive movement in San Francisco and give it more leverage against moderates like Mayor Gavin Newsom who support Hillary Clinton (see “Who Wants Change?” 1/30/08).

Daly said the Gonzalez decision complicates that narrative a little. “I don’t think it’s undercut,” Daly said, “but I think it’s confused a bit.”

A small business survey: fill it in

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Here comes the Scott Hauge/Small Business California Survey. Deadline March l0.

By Bruce B. Brugmann

As attentive Guardian readers know, it is small businesses that generate the net new jobs in San Francisco and most every other community in the country.

We even did two pioneering job generation surveys back in the mid l980s to prove the point.

Yet small business people, particularly in San Francisco, feel as if they are a minority under siege from City Hall and most every political quarter.

Scott Hauge, founder and president of Small Business California, is working tirelessly to change this perception.
HIs latest project: his annual survey of small business owners and supporters and their opinion on the economy and issues they care about most.

Personally, I like to add in some of the Guardian issues to benefit small business: enforce the antitrust laws, enforce the Raker Act and bring Hetch Hetchy public power to San Francisco, bring in progressive income and business taxes, get candidates from the presidential candidates on up and down to promote small business issues etc. You get the point.

Fill in the survey. Join Small Business California and keep up on the sector of the economy that produces the jobs and enlivens our neighborhoods.

Click here to take the Small Business Survey.

Where to now, SFPUC?

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› sarah@sfbg.com

Months after Mayor Gavin Newsom announced his intention to get rid of San Francisco Public Utilities Commission general manager Susan Leal, his appointees on the SFPUC board finally made if official on Feb. 20.

But the reasons for the previously unexplained move that have finally started coming from Newsom and his surrogates have only added to the confusion and concern over why Leal got canned and whether Newsom has compromised this important agency’s work for political reasons.

Leal was terminated without cause and is thus entitled to the $400,000 severance package from the contract Newsom used to convince her to move from city treasurer to SFPUC chief in 2004. Nonetheless, in the days leading up to the Feb. 20 hearing, the Mayor’s Office made a series of unsubstantiated allegations, including the claim that Leal botched negotiations with JPower over combustion turbines in Potrero Hill, that she was too much of a political animal and not enough of a team player, and that she didn’t focus enough on Newsom’s environmental initiatives like tidal power.

At first, Leal tried to handle her termination gracefully: for example, she told the Guardian that tidal power "is really expensive, doesn’t generate much power, and is a difficult process to get approved, environmentally speaking."

But then Newsom told reporters that city officials had discussed terminating Leal for cause, so that the SFPUC could avoid paying her severance, but eventually decided against it to avoid potentially expensive litigation costs. At that point, with the implication that she had done something wrong, Leal’s gloves came off.

"I really wanted to go out on the high road," Leal told us after Newsom’s latest allegations hit. "It’s unfortunate that the Mayor had to resort to 11th hour innuendo to try and justify what he did."

Leal notes that city officials never undertook a performance evaluation of Leal or the SFPUC, which would usually form the basis for an expensive effort to remove a high-profile public official. So why did Newsom really dump Leal?

Was it her creation of public power projects that earned her the scorn of Pacific Gas and Electric Co.? Was it her environmental initiatives, ranging from a biofuels program to a ban on bottled water, which seemed to show up Newsom? Was it the fact that she was a strong and independent woman in a male-dominated political landscape?

One clue can be found during the agency’s Nov. 14, 2007, meeting — just before Newsom announced he wanted Leal gone — in which SFPUC president Dick Sklar ripped into Barbara Hale, the assistant general manager for power, after she made a presentation on the agency’s long-term energy goals.

Sklar objected to Hale’s presentation, claiming, "It implied adoption of principles stating that the SFPUC was going to be in the public power business and take over public power generation in the city, making statement of principles totally inconsistent with anything the commission had adopted."

Equally disturbing to staff was the abusive way Sklar delivered his message.

"It was very painful," Leal told us. "It got so bad I had to intervene. I’m not going to allow my staff to be yelled at."

At issue was the agency’s plan to underground gas lines in Bernal Heights and extend its transmission lines, which Leal described as "a gimme. We have the easement all up the peninsula."

Beyond her openly pro–public power stance, Leal speculated that her friendly working relationship with the Board of Supervisors, including board president Aaron Peskin and Sups. Bevan Dufty and Sophie Maxwell, tweaked the mayor, who at times has seemed to have a personal vendetta against his former board colleagues.

"Maybe the mayor thinks that I’m too close with them. But we did more than just talk about climate change. We actually addressed it," said Leal, who convened a world-renowned climate change conference in San Francisco last year — on the same day Newsom was confronted by his then campaign manager Alex Tourk about the affair Newsom had with Tourk’s wife, Newsom’s commission appointments secretary Ruby Rippey-Tourk.

"Why am I fighting back, not going quietly?" said Leal, whose removal is effective March 21. "Because this is too big not to. I actually really like this job and will be going in to work for the next 30 days."

Addressing allegations that she mismanaged the JPower negotiations, Leal explained that PUC staff drew up a term sheet with JPower and presented it to the commission’s governing body. And it was at that point, said Leal, "that Commissioner Sklar popped off," claiming that the contract’s terms were terrible and should be renegotiated.

In the end, all five commissioners approved a description of the contemplated transaction with JPower, including a brief description of Sklar’s preferred alternative, which, as it turned out, had problems of its own.

"So, there never was a deal," Leal told us. "JPower was pushing the city to pay more money up front because it knows PG&E will do everything it can to make the implementation of JPower’s contract tough, and the city was pushing to pay the money later and so reduce its own risks."

Today, the PUC continues to work with JPower on a contract that has taken years to formulate and that, Leal notes, will ultimately allow the city to own the plant.

"So, if we want to shut it down, or run it on alternative fuel, we’ll have control," Leal told us. "My goal was to make the PUC as viable and green as possible."

She believes Sklar didn’t turn against her leadership until she started to push things that infringed on PG&E’s monopoly. "Did PG&E get me fired? If I was PG&E, I’d want me fired," Leal said.

Maxwell is a strong advocate of the Newark-to–San Francisco transmission line Leal sought, not just because it would help reduce environmental burdens in Maxwell’s heavily polluted southeast district but also because it would give the entire City more ability to bring in cleaner power.

"We could do large-scale solar in the Central Valley, as well as wind and geothermal energy. It would allow us to hook renewable power into statewide grid," Leal said, noting that the link would also allow the city to import the electricity it generates at Hetch Hetchy without using PG&E’s expensive lines.

Leal noted that under her leadership, the PUC tripled the city’s municipal solar generation. "But we don’t control residential solar. PG&E does," she said, noting the city is lagging at getting solar panels on homes but leading at doing in on public buildings. "It’s too bad PG&E couldn’t have made it easier for people."

Maxwell says she’ll miss Leal.

"I don’t think we’re going to be better off without her," Maxwell told us. "Susan is independent, a straight shooter, a grown up woman trying to make a difference and listening to all sides. She knew we had to be involved regionally. She also understood we have to have relationships with both sides of the hall."

Convinced that PG&E had something to do with Leal’s demise, Maxwell also believes the stinky sewage digesters, which sit down the road from her own house, need to be removed, not retrofitted, as Sklar recently advocated.

"The digesters need to go," Maxwell told the Guardian. "No other place in the nation, to my knowledge, has digesters within 25 feet of people’s homes."

Noting that Controller Ed Harrington, whom Newsom has nominated as the next general manager of the PUC, has a financial background, Maxwell says the question of what to do with the digesters should not be about money.

"We need to do the best we can for people, in the most economic and financially prudent was possible, but people must come first, "Maxwell told us.

Maxwell said these recent power struggles at the PUC convinced her to join seven other Supervisors in placing a charter amendment on the June ballot that will make it easier for supervisors to block mayoral appointees to the agency and will also require that PUC nominees have appropriate awareness and skills.

With a proposed $4.3 billion program in the works to upgrade the aging Hetch Hetchy system, which provides water to 2.4 million Bay Area residents, will the newly nominated Harrington be able to address water conservation, efficiency and recycling, without causing further harm to the Tuolumne River — all while dealing with battles over public power and wastewater concerns?

Noting that he began his City Hall career as Assistant General Manager for Finance at the PUC, a position he held for seven years before becoming City Controller 17 years ago, Harrington told us, "This is not the perfect way to walk into a position. Susan and I are old friends, she’s been very gracious, and has made it known that I had nothing to do with her removal. And I’m trying to be gracious. There’s no need to criticize her."

Leal, who calls Harrington a friend, said she believes Harrington "will push a little bit, but how much independence he can take and preserve remains the question."

Neither Sklar nor representatives from the Mayor’s Office returned calls from the Guardian. But Sup. Chris Daly, who saved Sklar’s neck by leaving the board one vote short of the supermajority required to reject a PUC mayoral appointee, told us, "I don’t think Sklar is Newsom’s tool. He’s bigger than that. If I thought he was not independent from PG&E, I wouldn’t have voted from him."

In fact, he said perceived lack of PG&E independence was why he joined seven other supervisors in voting against reappointing Ryan Brooks, who Newsom then nominated to the Planning Commission on the same day Leal was fired.

In the dark with Susan Leal and PG&E

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small susan.jpg vs. pge.png
During last night’s City Desk News Hour, the Chronicle’s Marshall Kilduff, Cecelia Vega, Rachel Gordon, Marisa Lagos, and I were discussing SFPUC appointments and the ouster of manager Susan Leal — which I blamed at least in part on PG&E’s influence — when suddenly the power went out in the television studio. Wow, we joked, PG&E was really playing hardball now. The lights and cameras came back on after about 10 minutes and we finished the show, careful not to again anger those with power (well, OK, not really).

Yet the real news on the SFPUC/PG&E/Leal front was made on the second half of the show (which is actually taped earlier in the day, whereas our part is live) when host Barbara Taylor interviewed Leal, her first extended comments since she was inexplicably fired by Mayor Gavin Newsom and then hit by a car in front of City Hall. Leal said she was more shocked than anyone that she was sacked by Newsom — who, to her face, said she was doing a fine job — and she still doesn’t fully understand it. But she did lay out some possibilities, including her public power moves that upset PG&E and innovative green programs that upstaged the moribund Mayor’s Office.
If you have Comcast cable, check out the show on Channel 11 when it replays tonight and Sunday night, both at 8:30 p.m.

PG&E wins a big one!

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By Bruce B. Brugmann

The email came in to me from a City Hall source during Tuesday’s meeting of the Board of Supervisors.

“Are you hearing the same thing I am about Daly possibly approving Sklar’s appointment? I can’t get my head around why he would do that, if the rumor is true.”

I sent a note back saying that our understanding at the Guardian was that there were seven solid votes against the mayor’s nomination of Richard Sklar and Ryan Brooks for reappointment to the San Francisco Public Utilities Commission, a longtime PG&E bastion in City Hall. The swing vote, I said, was Sup. Gerardo Sandoval, but he appeared to be resisting the massive pressure on him to vote for Sklar.

My source was right. Sup. Chris Daly did the ignominious thing and voted for Sklar and gave him the vote he needed to stay on the PUC, on a 7-4 vote. (It takes eight votes to reject a mayoral nomination.) Daly in the process did the following: (a) gave PG&E a major victory, (b) gave the mayor a major victory, (c) allowed Newsom’s campaign manager and key strategist, Eric Jaye, with PG&E as a major client, to claim a major victory, (d) helped assure the firing of PUC General Manager Susan Leal (Newsom had fired her earlier because, in the opinion of the Guardian and other public power supporters, she was making some baby steps toward public power), (e) helped assure that the PUC would most likely be a safe haven for PG&E for yet another few years.

And Daly did it without tipping his hand in advance and letting his public power and other supporters know what he was doing. Nor did he explain his vote at the meeting. Nor was he available after the vote to explain.
What happened? “He’s painfully qualified to serve on such a commission,” Newsom told Cecilia Vega, the Chronicle’s City Hall reporter, for her excellent story today. Sarah Phelan, the
Guardian reporter covering the meeting, tried in vain to get a comment from Daly and even went to his office after the meeting. No luck.

But Daly did post a comment on Steven T. Jones’ blog story in which Jones reported that Daly “flipped his vote” on Sklar and described it as a “surprising and inexplicable move.” Jones posted the item at 3:43 p.m. Tuesday.

Daly posted his comment 57 minutes later at 4:40 p.m.,. He wrote that he “never ‘flipped’ my vote on Sklar, because I never committed to vote against Sklar. I also didn’t cut a deal with any Sklar supporters–I quickly terminated the only call I received from a Skar supporter.

“Not that it wasn’t a very difficult vote, especially considering the company I had on the vote at the Board.

“I am strongly against the removal of Leal and the associated $400,000 payout and have expressed my concerns about the Mayor’s meddling in Commission affairs. When I brought this up, Skar admitted to me that he did not handle this well. But on other subjects, Sklar has shown independence from Newsom–most notably on the issue of the peaker plants and the Charter Amendment. I also believe Sklar when he says he’s not against public power.

“So here I am looking at a Commissioner that is clearly qualified and has shown some independence, but with whom I’ve disagreed on a number of issues. I just don’t think that rises to the level of meriting a rejection. That also doesn’t rise to the level of deserving an appointment if I was the appointing authority.”

C’mon, Chris. This is pretty lame stuff for a guy who likes to kick ass all around City Hall and the Hetch Hetchy watershed. You’ve been out there on a host of good issues over a long period of time, including public power and kicking PG&E out of City Hall. So what happened? (I’m sending this blog over to your office to give you a chance to answer.)

And so Daly joined the emerging PG&E Three on his vote: Sups. Michela Alioto-Pier, Sean Elsbernd, and Carmen Chu. And he rejected seven solid votes for public power and against PG&E by supervisors who deserve gold stars in their lapels: Sups. Aaron Peskin (who led the charge), Ross Mirkarimi (the cca and public power generalissimo), Tom Ammiano and Jake McGoldrick (all good on the issue), Sophie Maxwell and Bevan Dufty (who came through nicely), and Sandoval, who did the right thing while having a lot to lose because he will be running for judge. He was told during the intense lobbying campaign, sometimes bluntly, sometimes obliquely, that he would get lots of support and money if he went for Sklar and lots of pain and punishment if he went against Sklar. Good going, Gerardo.

And Sklar? Well, he’s never shown us the slightest interest in pushing public power and taking on PG&E during his long PUC tenure and he wasn’t reappointed by the Mayor/Jaye/PG&E to suddenly turn state’s evidence on PG&E. If he were the statesman his supporters were portraying him to be, he would have turned down the appointment and made some helpful comments. Instead, he took the occasion, in his appearance before the board, to trash Leal and say, according to the Chronicle, “‘I supported Susan for mayor in 2003. She’s my friend,”” he said. “”But this is not the job for her.'”

The Chronicle neatly pointed out that, during the meeting, Sklar “declined to offer specifics about why he thinks Leal should go.” Note the Newsom/Sklar spending habits: If the board votes to terminate Leal’s contract next week, she stands to collect a severance package of more than $400,000.

The Chronicle also pointed out that Sklar had mounted a “vigorous campaign to keep his post on the commission by meeting with supervisors beforehand.” The story also said that Sklar had rounded up support from a batch of high profile politicians: former mayor Art Agnos and Willie Brown (both of whom operated as PG&E aliles during their reigns), Sen. Dianne Feinstein (a PG&E ally who negotiated the sellout Turlock/Modesto power contract that cost the city millions) and House Speaker Nancy Pelosi, a PG&E ally who led the fight to help PG&E privatize the Presidio and turn the public power base over to PG&E’s private power. Like Sklar, none of them have taken on PG&E on much of anything ever.

Let’s have a show of hands on this one: how quickly will Sklar, with PG&E support and allies like these, put even a tiny pebble in the path of the PG&E steamroller on the PUC? I’ll keep you posted. B3

Click here for Steven T. Jones’ blog, Daly’s comment, and Kimo Crossman’s comments.

Read Kimo Crossman and Chris Daly’s full blog comments after the jump.

Standing up to the mayor

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EDITORIAL Mayor Gavin Newsom spent a fair amount of time this winter on the presidential primary — but he’s gearing up to spend far more time on the local supervisorial elections this fall. He’s showing a much more aggressive attitude toward the board, particularly President Aaron Peskin, and will be looking for ways to either embarrass or undermine the progressive majority over the next few months. Then he’ll push hard for his more moderate slate this fall.

That’s what this whole flap over Peskin calling Port of San Francisco director Monique Moyer and berating her over a policy disagreement is about. Remember: the incident she’s complaining about happened more than five months ago. Moyer’s letter went to the city’s Department of Human Resources, which took it as a complaint against a city employee and kept it strictly confidential. The City Attorney’s Office also said it was a confidential personnel matter and wouldn’t release it. But Moyer copied Phil Ginsberg, the mayor’s chief of staff, on the letter, and Newsom’s office doesn’t deny that it was the source of the leak.

We aren’t excusing Peskin’s behavior; if he was abusive to Moyer or her staff, that’s a problem. (He says he called and yelled at her over the Port’s development plans, and we don’t doubt he could have been more diplomatic.) But it hardly seems to rise to the level of a major political scandal.

It is, however, plausible payback for Peskin’s very public attack on the mayor’s dubious budget moves (including the diversion of money from Muni to pay for mayoral office staffers) and for the board’s attempt to remove two of Newsom’s public utilities commissioners from office.

With this kind of pressure (and nastiness) coming from the Mayor’s Office, some of the supervisors may be tempted to avoid conflict with the still-popular Newsom, but that would be a mistake: the board needs to fight back on several key fronts.

For starters, the supervisors need to stand up to the increasingly intense lobbying campaign and vote Feb. 12 to remove Dick Sklar and Ryan Brooks from the San Francisco Public Utilities Commission. The stakes are immense, with public power and the city’s energy future on the line, and Brooks and Sklar have been on the wrong side of the key issues. The lobbying effort to save Sklar and Brooks has been unprecedented: Sup. Gerardo Sandoval, who is still officially undecided, told us that "in all my seven years on the board, I’ve never seen such intense lobbying on anything, including multibillion-dollar development projects." Sklar has pulled out all the stops, and at one point his supporters offered to have US Sen. Ted Kennedy speak to the supervisors on his behalf. It will take eight votes to oust Sklar and Brooks — and the vote will be close — but the supervisors should ignore the pressure and stand up to Newsom.

And the PUC should hold off on any decision on general manager Susan Leal until new commissioners are in place.

The board needs to keep pushing on the Muni money and Mayor’s Office staffing too — and take a hard look at the three people Newsom wants to put on the Municipal Transportation Agency. Since the mayor has fired three sustainable-transportation advocates, including Bicycle Coalition director Leah Shahum, the board should insist that the mayor or one of his top deputies appear at a hearing and explain the administration’s long-term plans for the MTA and public transit in San Francisco.

Reject Sklar and Brooks

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EDITORIAL Mayor Gavin Newsom’s pledge to bring new ideas into his second administration apparently doesn’t include public power. Not only has he ousted Susan Leal, the (modestly) pro–public power director of the San Francisco Public Utilities Commission; he’s also reappointed to the panel two commissioners who have been Pacific Gas and Electric Co.’s best friends. Ryan Brooks and Dick Sklar can only be rejected if eight members of the Board of Supervisors vote against them, and that’s what needs to happen.

For years the PUC has been a less-than-stellar panel dominated by political allies of the mayor, which is crazy: The agency is overseeing a $4 billion plan to reconstruct the city’s entire water system (which requires a certain degree of management). And it’s in the middle of a growing move to build a sustainable, environmentally sound power system for the city. The PUC is overseeing San Francisco’s move to community choice aggregation. It’s managing the installation of city-owned power plants. And it could be involved in a long list of renewable-power projects, from wave generation to solar.

That last thing the city needs is PUC commissioners who are opposed to (or weak on) moving into the energy business.

Unfortunately, Sklar (who served as ambassador to the United Nations under Bill Clinton) and Brooks (a vice president of Viacom Outdoor) have shown such reluctance to promote public power that they might as well be on PG&E’s payroll. Their reappointments, announced Jan. 15, are a sign that Newsom will not tolerate any move by his commission to get San Francisco into the retail electricity business (although a federal law — the Raker Act — requires the city to run a public power system).

It may be that public power advocates will ultimately have to go around the PUC; as long at the mayor controls that panel, it’s unlikely that anyone who wants to promote real energy alternatives will be appointed. And it’s essential that the supervisors move forward on a City Charter amendment that would give the board the right to appoint three of the five commissioners.

But in the meantime, it’s crucial to send Newsom a message: his ouster of Leal and his attempt to ensure a PG&E-safe PUC are not acceptable.

The appointments don’t require board approval — but the supervisors have the right to veto them with an eight-vote majority. Sups. Aaron Peskin, Sophie Maxwell, and Bevan Dufty have vowed to introduce a resolution to reject Sklar and Brooks, and their colleagues should join in. We don’t expect Newsom to suddenly turn around and name active public power supporters in the place of Sklar and Brooks, but if the board sends the message that PG&E allies aren’t OK, the next two appointments might be a little better.

The supervisors should reject Dick Sklar and Ryan Brooks as quickly as possible.

Delete key

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› sarah@sfbg.com

San Francisco’s recent move to a new, privatized electronic campaign finance database will make it more difficult to track amendments to reports on political spending, a change that has caused a conflict between top-level staffers at the Ethics Commission.

In a Jan. 10 memo sent to all of the appointed members of the Ethics Commission, fines collection officer Oliver Luby wrote, "The transition to a NetFile-created database will result in large amounts of deletion of campaign data from the Commission’s database, both in the future and retroactively.

"This data deletion will destroy the ability of the Commission and the public to systematically perform computerized reviews of finance changes made via amendment," Luby wrote, adding, "Coincidentally, the biggest beneficiary of this lack of disclosure will be the clients of NetFile."

Many large campaigns use NetFile to electronically file their finance statements, and last year the Ethics Commission decided to have the company take over the city database, which officials with the Department of Technology and Information Services say is failing.

To illustrate his concerns, Luby sent a report to commissioners and staff Jan. 2 identifying more than $2 million in transactions that political committees, including the 2003 campaigns Gavin Newsom for Mayor and Kamala Harris for District Attorney, reported between 1997 and 2007 by using post-filing-deadline amendments, sometimes in violation of the law.

"If there is any way for the Commission to convince NetFile to provide a database and filing system that will not delete data, I recommend pursuing it," Luby concluded. "Otherwise, this problem is an indicator that the cost savings obtained by using NetFile, instead of SF DTIS, were inflated."

But Ethics executive director John St. Croix didn’t appreciate Luby’s input and defended the choice of NetFile.

"DTIS determined that it would be very expensive and unrealistic for them to create a new system since they didn’t have the man power or the time. And to buy it elsewhere, like from the city of Los Angeles, would have been expensive, so we looked at the private vendors," he told the Guardian.

St. Croix signed a three-year, $90,000 per year contract with NetFile on Oct. 31, 2007, and told us, "If we don’t go with NetFile, we won’t have anything,"

David Tristan, deputy director of Los Angeles’ Ethics Commission confirmed that his city’s in-house system, which costs $30,000 per year, is not a turnkey operation: "It was built as a filing, audit, enforcement, and compliance tool, and it’s a good system, but we encourage that you have a systems person."

St. Croix claimed Ethics auditors are not losing any tracking capability. "The way the old system works, a global assessment is no longer available," St. Croix told the Guardian.

Acknowledging that his staff will have to take more steps to do a comprehensive "global search," St. Croix said Luby "is negating the fact that we will be able to display lobbyist reports, statements of economic interests, and all our scanned filings."

If a modification to the NetFile contract is required, St. Croix said, "We’ll try to get the city to pay for it." But, he claimed, "there is no basis for the idea that there is a sinister relationship between the filers and NetFile."

NetFile founder David Montgomery confirmed that NetFile, which accounts for 50 percent of the state’s electronic filings, provides services to filers, such as political committees supporting candidates and measures, and governmental agencies.

"But the data filed belongs to NetFile’s customers. We’re just providing a management service," Montgomery told the Guardian, dismissing conflict-of-interest concerns. "That’s like saying that because Joe Smith cheated on his income tax, we need to sue TurboTax."

Noting that amendment-tracking capabilities are on NetFile’s long-term wish list, Montgomery said, "We want to make sure everyone is happy with the transition, but some people don’t like change."

Joe Lynn, who was campaign finance project for the Ethics Commission when San Francisco went online, believes NetFile represents a degradation of Ethics audit capacity. "The biggest fine issued by the SF Ethics Commission, and the biggest in California, involved this principle, the auditing of an amendment," he said, referring to the $100,000 fine that a Pacific Gas and Electric Co.–funded committee incurred from the city (plus $140,000 from the state) when its amended filings showed it failed to disclose $800,000 in last-minute donations from the utility to help defeat a 2002 public power measure. Ethics auditors caught one of PG&E’s violations, while the media, using Ethics’ amendment review tools, caught the other.

"But thanks to the way NetFile’s system is set up, it doesn’t have the capacity to display amendments the way we do," Lynn said. "This demonstrates the dangers of privatization."

Lynn said NetFile’s less sophisticated ability to track amendments stems from the fact that it was set up in 1998 to help committees fill out campaign finance reports, "and not from what makes sense for public disclosure.

"It’s unfortunate, but not necessarily negligent, that this fell through the cracks," added Lynn, who suggests the Ethics Commission should work to resuscitate its amendment-tracking ability by requiring that committees filing amendments fill out a form stating just how filings have been amended.

"We need to have ordinance," Lynn said. He doesn’t buy the argument that NetFile’s system is adequate just because it’s used by San Jose, Santa Clara, and San Bernardino.

"San Francisco should have a first-class system," Lynn said. "This is another mechanism by which a committee can skirt the law."

Robert Stern at the LA Center for Governmental Studies worries that by signing on with NetFile, San Francisco will lose "the ability to find electronically information on what was changed and to see whether voters had this amended information before an election and what they were learning through amendments afterwards."

Luby also worries that because Ethics’ old database won’t have technical support, it could irreparably break down in the future and that even if it remains functional, "auditors will have to look in two places to see every local contribution Chevron made."

Luby e-mailed his concerns to management Dec. 7, 2007, then provided them with his detailed analysis Jan. 2 — submissions that raised St. Croix’s ire.

"I cannot attest to the accuracy of the information in this report," St. Croix wrote in a Jan. 11 memo to the commission. "I believe that many of its conclusions are inaccurate and many are spurious. Further, the information appears to be based on false assumptions and the language implies dishonest motives that are quite simply non-existent."

But St. Croix’s reply earned a swift rebuke from Luby’s union, Service Employees International Union Local 1021. "We believe the report was written in accord with Mr. Luby’s previously recognized duties," SEIU work-site organizer Cristal Java wrote Jan. 15.

Claiming St. Croix implied that Luby’s report was a "misuse of City resources," Java added, "While Mr. Luby’s act of forwarding his report may not satisfy the technical requirements of filing a complaint, we believe that Mr. Luby’s bringing of a report about work-related problems to your attention was whistleblowing."

Luby said St. Croix "is attempting to discredit his amendment review report because its results reflect that Ethics staff dropped the ball when the new database’s minimum system requirements were provided to NetFile. Mr. St. Croix doesn’t want to own up to the mistake."

Sneak attack on public power

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EDITORIAL This is Mayor Gavin Newsom’s idea of shaking up his administration: fire a Public Utilities Commission director who has been doing a pretty decent job, then replace her with a city controller who has been pretty good at his job but will most likely be terrible at hers. The result should please nobody but Pacific Gas and Electric Co.

We’ve had our concerns about PUC director Susan Leal; she’s been tiptoeing oh-so-cautiously around public power when she ought to be leading the charge to kick PG&E and its illegal monopoly out of town. But at least she’s moving in the right direction, generally — and the fact that PG&E wants to get rid of her is a sign that she’s the kind of person the city ought to have at the helm of this crucial agency.

The logic of firing Leal makes so little sense. She has little more than a year left on her contract, and to pay her mandatory severance will cost the city $500,000, which the treasury can ill afford. And Newsom hasn’t pointed to anything she’s done wrong.

But city hall insiders say PG&E thinks she’s too aggressive about public power, and the giant utility can’t tolerate that. So Newsom quietly announced Friday afternoon, Jan. 4, that she was going to be replaced.

Of course, Newsom technically can’t fire the PUC general manager — only the commission can do that. And under the Brown Act, the state’s open-meetings law, the mayor can’t call them all and seal the deal; the commissioners have to hold a meeting and talk about it. That meeting ought to be open to the public. The commissioners will try to close the doors, arguing that the general manager’s future is a confidential personnel matter — but that privilege exists to protect the employee, not the commissioners, and Leal has every right to waive it. She should fight back here, demand that the panel meet openly and discuss in public why she is being dismissed — and take the opportunity to challenge any claims against her and to make her case both for public power and for her continued employment.

This is far more than a simple dispute between an executive employee and an appointed commission; there are key policy issues at stake here — public power, community choice aggregation, and the city’s energy future — and they shouldn’t be settled in secret.

Ed Harrington has been a decent controller in many respects — but he’s never shown any indication of supporting public power. In fact, he’s done the opposite — every time the issue has come before him, he’s found a way to help PG&E. His estimates of the cost of public power ballot measures have been so wildly inflated as to be professionally embarrassing. For more than five years he’s refused to do what Sup. Chris Daly has requested and calculate the cost to the local economy of high PG&E rates. And Harrington was a senior PUC staffer when the sellout contracts with PG&E, Turlock, and Modesto were negotiated.

The Board of Supervisors should hold a hearing on these personnel changes and demand that Harrington appear and discuss publicly his position on CCA and PG&E. At the very least the voters should have the right to see this for what it appears to be: a Newsom-PG&E sneak attack on public power. And the board should pass Sup. Sophie Maxwell’s proposal to give it the authority to appoint some members of the PUC.

PG&E cuts off Ammianoliners!

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Our daily phone call to the answering machine of Sup. Tom Ammiano for our daily Ammianoliner could not go through for much of the day.

Yet another PG&E outage had knocked out his phone service. Ever notice how, when the first rain drops start falling, PG&E starts having outages–and there is no way to call in, and nobody to talk to or take complaints, and the mayor moves merrily on doing PG&E’s business. The latest Newsom moves on behalf of PG&E: He is putting PG&E-friendly Ed Harrington, city controller, into the PUC executive director post once held by Susan Leal ,who PG&E fired recently via Newsom because of her eeney weeny baby steps toward public power.

Anyway, we got through about 6:30 p.m. and heard the following Ammianoliner update on Newsom:

Newsom’s pre-nup agreement includes no question time.

Good going, Tom. 2008 will be your best year for hot Ammianoliners. B3

Amending the solar plan

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EDITORIAL San Francisco assessor Phil Ting wants to encourage more city residents and businesses to put solar panels on their roofs. It’s a noble idea, but the legislation he and Mayor Gavin Newsom have proposed needs work.

Ting told us he’s concerned that buying and installing solar panels is too expensive and that the cost is discouraging people from taking these steps toward putting the city on a path to greater reliance on renewable energy. So he’s put forward a two-pronged plan to lower the price: Using funds generated by the sale of Hetch Hetchy power, the city would offer cash payments of between $3,000 and $10,000 to residents and businesses that go solar. Then city bond money would be used to finance the remaining installation costs, and customers could pay back the city over 20 years.

The bond money Ting is eyeing comes from a measure passed more than 15 years ago, after the Loma Prieta earthquake, that makes money available for seismic upgrades to commercial property. For various reasons, including the complexity of the requirements, almost none of the $350 million in that bond fund has been spent, so with the approval of the voters it could be redirected to solar programs.

There are several problems with this approach.

We’re always a little leery of spending public money to benefit private property owners (and let’s remember that almost everyone who owns a home in San Francisco has seen its value increase dramatically in the past few years, despite the market slowdown). And while Ting and Newsom are right that the Hetch Hetchy money doesn’t come directly out of the General Fund, it’s still public money that could be spent on other programs — and the mayor is fighting against a plan to spend more city money on affordable housing.

But global warming and energy independence are important enough that we could live with the cash incentives — if the program were tailored to support community choice aggregation and public power. Instead, in its current draft, the plan would amount to a large incentive for electricity customers to snub the upcoming city program and stick with Pacific Gas and Electric Co. The language of the measure requires that applicants for the incentive program be eligible for a similar state program — but that state program is administered by PG&E and two other private utilities and is available only to their customers.

Starting sometime this year, if all goes well, San Francisco will be in the retail electricity business, competing directly with PG&E. Ting told us he’ll make sure the language is fixed to make the program available to all, but we’d go further: a city incentive program should help the city’s efforts. The first benefits should go to city customers, and they should be tailored as incentives for residents and businesses to stick with municipal CCA power and reject PG&E.

The bond money is problematic too. As it stands, landlords could pass along half of the costs of that money to tenants, many of whom don’t pay their own electric bills anyway and thus would get no benefits. That’s got to go: if the city is going to offer cheap loans to let landlords upgrade their buildings (and thus increase the value of their property), the supervisors shouldn’t pass any measure that sticks tenants with any of the costs.

The city of Berkeley is working on a similar program that seems much more simple: property owners can borrow money for solar panels and pay it back through increased property taxes. Sup. Gerardo Sandoval has suggested San Francisco pursue a similar plan, and Ting and the mayor should take that into consideration.

There’s the kernel of a good idea here — but the supervisors need to make some significant changes to what the mayor and the assessor are proposing before this plan moves forward.

PG&E contracts: an $80 million legacy

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EDITORIAL The San Francisco Board of Supervisors approved a modest item the other week described on the agenda as "Agreement to Implement a Term Sheet … between the City and County of San Francisco … and the Modesto Irrigation District." There wasn’t much discussion, the action received no notice in the press, and few people outside the office of the Budget Analyst realize just how significant this scrap of legislation really is.

But the vote brought to a close (for now, anyway) one of the most rotten chapters in San Francisco history, a story of corruption, waste, and raw political power that makes many of today’s scandals look like cornflakes. Since 1988, when the city attorney, the mayor, and the supervisors bowed down to Pacific Gas and Electric Co. and signed one of the worst deals in the city’s history, San Francisco has lost more than $80 million.

And with public power back on the agenda and activists discussing the potential for a ballot measure in November 2008, it’s worth reviewing a bit of the history. There are plenty of lessons.

The story goes back to 1983, when city staffers began negotiating a series of long-term contracts with PG&E and the Modesto and Turlock irrigation districts. San Francisco had an obligation under federal law to sell some of the electric power from its Hetch Hetchy dam to the two districts; PG&E would carry that power over its lines and guarantee its supply if low water kept the dam from generating at full capacity.

The negotiations were immensely complex and generated tens of thousands of pieces of paper. The city wanted to raise the bargain-basement rates it had been charging the districts; PG&E wanted to raise the rates it charged for transmitting the power.

Then a Central Valley congressional representative named Tony Coelho got involved. Coelho (who was later forced out of office in a scandal) started talking about the Raker Act — the federal law that gave San Francisco the right to build the dam but also required the city to create a public power system — and suddenly, official San Francisco freaked. If Coelho were to make too much noise about the feds enforcing the Raker Act, the city, which had been in violation of the law for 70 years, could have lost the dam.

So then-mayor Dianne Feinstein cut a backroom deal with Coelho: the city would be allowed to raise rates but had to sell almost all of its power (aside from basic municipal needs) to the districts. That, of course, would ensure that the city had little power left for a full-scale public power system. Feinstein promised that her staff would work out the final details of a 30-year contract.

The negotiations on that contract dragged on, however, as PG&E and the districts kept demanding more. The talks were conducted in secret, at PG&E headquarters. By 1987 city staffers were writing memos calling PG&E’s demands "ridiculous" and "excessive" and stating that the proposed deals would "impose many risks on the city." The negotiations stalled — until Feinstein intervened, overruled her staff, and agreed hands down to the deal PG&E wanted. That was one of the last acts of her administration; Art Agnos was elected to replace her that November and took office in January 1988.

The contracts had to be approved by the Board of Supervisors, and (after the Guardian broke the story and denounced the deals) discussions were heated. Budget analyst Harvey Rose took a hard look at the proposed contracts and, using strong and decisive language, told the board the deals were terrible for the city, would cost taxpayers a fortune, and should be rejected.

Right before the final vote we obtained public records that outlined Feinstein’s sellout — but the documents from the key negotiating period had somehow mysteriously disappeared.

Then a team of seven PG&E lobbyists descended on City Hall, and Louise Renne, a PG&E ally who was then the city attorney, privately advised the supervisors that they would be in legal trouble if they didn’t do PG&E’s bidding. The contracts were approved, with only Sups. Harry Britt and Richard Hongisto voting no. Our front-page headline of Feb. 24, 1988, told the story: "PG&E 8, SF 2." Although Agnos had run as a public power candidate, he buckled too and signed the contracts — without ever so much as searching for the missing records.

The Dec. 5, 2007, budget analyst’s report notes that the city lost between $2.5 million and $3 million per year on the deals — and during the two years of the energy crisis, when the true downside of what Feinstein, Renne, Agnos, and the Board of Supervisors did became apparent, the tab was $27 million. That’s a total of as much as $87 million of city money thrown away on sweetheart deals with PG&E and the two districts.

After the energy crisis — and after Renne left office — the current city attorney, Dennis Herrera, went to court to renegotiate the deals. The new agreements are much better and will save San Francisco millions. That’s what the board quietly approved this month.

But much of San Francisco’s power is still tied up for another 10 years, and huge damage has been done.

Meanwhile, PG&E is suing the city to keep public power out of the Ferry Building, is trying to corner the market on wave and tidal power in the bay and along the coast, is trying to undermine community choice aggregation, and remains an entrenched, illegal monopoly with far too much clout at City Hall.

The good news is that there’s real talk of a new public power push in San Francisco, and it can’t come too soon. And the lessons from the fiasco of 1988 can and should guide any future efforts.

For starters, nobody — no city attorney, no department head, no mayor — should ever again be allowed to negotiate with PG&E in secret. Any talks with the utility should be recorded and all documents and memos made public before any city agency votes on any contract or deal.

PG&E loves to argue that public power is an expensive proposition and that taxpayers will be on the hook for a lot of money to buy out or create a municipal power grid. But advocates can accurately point to the history of private power in San Francisco: dealing with PG&E has cost the city (and the taxpayers and the ratepayers) far more than the price of creating a municipal grid. The 1988 contracts are a particularly visible example. And 20 years later, the overall lesson is clear: as long as a private company is running the city’s energy policy, the public is going to get screwed.

Ammiano on C.W.Nevius

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C.W. Nevius blames homeless for Susan Leal’s accident, the upcoming drought, and for not sending the children to the Gap sweatshop.

(From the answering machine of Sup. Tom Ammiano on Tuesday, Dec. l8, 2007). Nevius is the ace Chronicle columnist in a long line of Chronicle editorial staffers who operate on a key Hearst principle: attack the homeless but don;t attack PG@E. And don’t attack PG@E and its illegal private power monopoly alone and unmolested. Note David R. Baker’s ad for PG@E, masquerading as a front page story with color and diagrams, about how PG@E is going to support a commercial wave power plant off the Northern California coast. Big deal. No matter how this pie-in-the-ocean project will turn out, the result will still be expensive private power which PG@E will send to the rubes in San Francisco in violation of the federal Raker Act that mandates cheap public power in San Francisco. (See Guardian stories back to l969). B3

PG&E still calls the shots

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EDITORIAL Mayor Gavin Newsom hasn’t even officially started his second term, and already he’s putting out the signals: this is going to be a very bad four years. He’s sent loyal staffers packing, cut salaries in his office by sending a senior aide to the airport with no real job description, and created a bogus hiring freeze that lets him control all new city employment in every department.

And now, several supervisors say, he’s allowing Pacific Gas and Electric Co. to decide who gets to run the city’s Public Utilities Commission.

Newsom’s office won’t comment on why the mayor has asked PUC general manager Susan Leal to resign. The mayor hasn’t explained what Leal might have done that would be so bad that it’s worth spending $500,000 the city doesn’t have to buy out her contract. But Sups. Ross Mirkarimi and Aaron Peskin, who have been watching Leal closely, say the reason she’s being sent packing is very simple: she’s moving too aggressively on public power.

Now, let’s step back a moment here and put this in perspective. Leal was never a radical public power advocate. She didn’t support public power when she was on the Board of Supervisors and was very slow to come around to the notion that the city should take a more active role in generating and distributing its electricity.

But over the past few years Leal and her staff have been cautiously, haltingly moving toward community choice aggregation, city-owned generation, and the concept of putting city power lines below the streets. It’s not an agenda that was going to lead to a total takeover of PG&E’s facilities in the next year or two, and, in fact, at Leal’s pace PG&E’s illegal monopoly was probably safe for another decade. Still, Leal was moving toward creating city-owned electric generation through a set of new combustion turbines — a plan PG&E bitterly opposed.

Leal isn’t commenting, and the Mayor’s Office will only say that discussions about her job tenure are ongoing. But City Hall sources tell us Newsom’s office informed Leal last week that she would be among the department heads replaced next year — and there’s plenty of evidence that her willingness to proceed with public power is among the reasons why. "That’s absolutely part of what this is about," one person close to the Mayor’s Office told us. Another said, "The Mayor’s Office is saying she has a bad relationship with the commission, and a lot of that is about city-owned power."

Ryan Brooks, the president of the PUC, told us he couldn’t comment on a personnel matter and insisted that Leal isn’t facing the ax because of public power. But he made a point of saying the commission needs "to take a step back and see what we’re trying to do" before proceeding with anything that looks like a public power plan.

The message here is pretty clear: challenge PG&E in Newsom’s San Francisco, and your job is on the line.

Leal’s no fool. She refused to take the PUC job unless the mayor offered her a written contract that makes it expensive to get rid of her. And Leal can simply collect her lucrative severance package and walk away.

But if she’s serious about her legacy, her political future, and the issues she says she cares about, Leal shouldn’t back down so quickly. The mayor can’t fire her directly; that’s the job of the five-member PUC. And while Newsom asked every department head to submit a resignation letter months ago, Leal was cagey; her letter stops short of offering to leave. So legally, the mayor can’t simply accept her resignation if she chooses to fight. In fact, Angela Alioto, a civil rights lawyer and former supervisor, says Leal is in the driver’s seat here. "She has a contract, and she can’t be fired without cause," Alioto told us. "She should forge ahead."

At the very least, Leal ought to demand a full, public PUC hearing and demand that the mayor’s proxies on the panel explain exactly what she’s done wrong. And she should turn that hearing into a discussion of public power and the city’s energy future and insist that the commissioners say openly whether they support a transition away from PG&E and toward a city-run system.

But frankly, most of the PUC commissioners aren’t likely to defy the mayor or go up against PG&E. It’s an embarrassing panel, and the supervisors need to move as quickly as possible to do for the PUC what they’ve done for other key city commissions and mandate that the mayor and the board share appointing power. The district-elected supervisors ought to have three appointments to the panel and the mayor two.

In the meantime, the behavior of the Mayor’s Office here demonstrates why it’s critical that the public power movement start looking at a ballot measure for next fall — an initiative or charter amendment that would set in motion a program to create a city-owned utility. There are lots of ways to approach that process; it certainly fits as part of a sweeping campaign against privatization. But however you frame the issue, it’s clear the mayor and his PUC can’t be trusted here, not for one minute longer.

PG&E FIRES PUC DIRECTOR!

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susanleal.jpg

This is big, a clear sign of how Mayor Gavin Newsom is going to operate in his next four years: Susan Leal, the head of the Public Utilities Commission, is going to be fired because she’s moving too fast toward public power.

Now keep in mind: Susan Leal is not by any means a radical public-power activist. We’ve been pushing her on this issue for years, and she is, at best, moving slowly, cautiously, incrementally to implement Community Choice Aggregation and to look at options to create a city-run utility.

But even these cautious, slow moves were too much for Pacific Gas and Electric Company, and, according to what I’ve heard at City Hall, PG&E was directly behind this move. THe message that Newsom and PG&E are sending out: Nobody should dare, ever, to take even little itsy-bitsy baby steps toward public power.

Note the comment by the head of Leal’s commission:

“The commission has never taken a vote on public power,” commission President Ryan Brooks said Wednesday. “It’s something she wants, but I don’t think the commission wants it. … I don’t think it’s the right time for it. It’s not a policy direction she has from the commission or from me.”

Leal, no fool, forced Newsom to give her a contract when she took the job, and the city will now have to spend $500,000 to buy her out. That’s a lot of money — but Newsom is apparently willing to spend it as the price of protecting PG&E.

It’s going to be a long four years.

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