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Ecuador Plaintiffs, Steven Donziger, Committed Fraud against Chevron in Ecuador Case

Berlinger and Donziger

Joe Berlinger’s (left) Film “Crude,” paid for by Ecuador Plaintiff Attorney Steven Donziger, ultimately led to a crushing victory for Chevron Corporation in the Ecuador Case

Chevron Corporation won a major victory today when a New York federal judge ruled that the case against the oil company in Ecuador was procured by fraud.

U.S. District Judge Lewis Kaplan in New York found that lead plaintiff attorney Steven Donziger used bribery, coercion, fraud and other illegal means to create a fraudulent case against Chevron in Ecuador.

Donziger, whose fraudulent lawsuit was supported by environmental organizations such as AmazonWatch in San Francisco, Rainforest Action Network, Earthrights International, and other alleged environmental groups, might have gotten away with the crime if it were not for the sloppy work of Hollywood movie director Joe Berlinger.

Berlinger, who was paid by the plaintiffs to produce a film that lambasted Chevron for alleged pollution in Ecuador, ultimately and ironically, became Chevron’s savior.

Berlinger’s movie “Crude” produced evidence that led Chevron to its important court victory today in New York.

In making his ruling, Judge Kaplan  said Donziger and the Ecuador plaintiffs used “corrupt means” to secure a multi-billion-dollar pollution judgment against Chevron Corp in Ecuador, giving a major setback for attorneys hoping to collect on the award.

Kaplan said he found “clear and convincing evidence” that attorney Steven Donziger’s legal team bribed an Ecuadorean judge to issue an $18 billion judgment against the oil company in 2011.

The villagers had said Texaco, later acquired by Chevron, contaminated an oil field in northeastern Ecuador between 1964 and 1992.  Ecuador’s high court cut the judgment to $9.5 billion last year.

Kaplan’s decision bars Donziger and environmental groups like AmazonWatch and public relations agent Karen Hinton from enforcing the Ecuadorean ruling in the United States. It may also give Chevron legal ammunition in other countries where the plaintiffs could try to go after Chevron’s assets.

At a six-week trial last year, Chevron accused Donziger of fraud and racketeering and said Texaco cleaned up the site, known as Lago Agrio, before handing it over to a state-controlled entity.

Below is the full text of U.S. District Judge Lewis Kaplan’s opening judgement today against Steven Donziger and the Ecuador plaintiffs:

“Steven Donziger, a New York City lawyer, led a group of American and Ecuadorian lawyers who brought an action in Ecuador (the “Lago Agrio” case) in the names of 47 plaintiffs (the“Lago Agrio Plaintiffs” or “LAPs”), on behalf of thousands of indigenous peoples of the Orienté region of Ecuador, against Chevron Corporation (“Chevron”).

They claimed that Chevron was responsible for extensive environmental damage caused by oil activities of Texaco, Inc. (“Texaco”), that ended more than twenty years ago and long before Chevron acquired Texaco’s stock.

After years of pressuring Chevron to settle by a variety of both legitimate and illegitimate means, Donziger and his clients obtained a multibillion dollar judgment (the“Judgment”) in the Ecuadorian courts and now seek to enforce it around the world.

Chevron then brought this action, contending among other things that the Judgment was procured by fraud.  Following a full trial, it now seeks equitable relief against Donziger and the two of his Ecuadorian clients who defended this case in order to prevent any of them from profiting from the alleged fraud or from seeking to enforce the Judgment in the United States.

This case is extraordinary. The facts are many and sometimes complex. They include things that normally come only out of Hollywood – coded emails among Donziger and his colleagues describing their private interactions with and machinations directed at judges and a court appointed expert, their payments to a supposedly neutral expert out of a secret account, a lawyer who invited a film crew to innumerable private strategy meetings and even to ex parte meetings with judges, an Ecuadorian judge who claims to have written the multibillion dollar decision but who was so inexperienced and uncomfortable with civil cases that he had someone else (a former judge who had been removed from the bench) draft some civil decisions for him, an 18-year old typist who supposedly did Internet research in American, English, and French law for the same judge, who knew only Spanish, and much more. The evidence is voluminous.

The transnational elements of the case make it sensitive and challenging. Nevertheless, the Court has had the benefit of a lengthy trial. It has heard 31 witnesses in person and considered deposition and/or other sworn or, in one instance, stipulated testimony of 37 others. It has considered thousands of exhibits. It has made its findings, which of necessity are lengthy and detailed.

Upon consideration of all of the evidence, including the credibility of the witnesses– though several of the most important declined to testify – the Court finds that Donziger began his involvement in this controversy with a desire to improve conditions in the area in which his Ecuadorian clients live. To be sure, he sought also to do well for himself while doing good for others, but there was nothing wrong with that. In the end, however, he and the Ecuadorian lawyers he led corrupted the Lago Agrio case.

They submitted fraudulent evidence. They coerced one judge, first to use a court-appointed, supposedly impartial, “global expert” to make an overall damages assessment and, then, to appoint to that important role a man whom Donziger hand-picked and paid to “totally play ball” with the LAPs.

They then paid a Colorado consulting firm secretly to write all or most of the global expert’s report, falsely presented the report as the work of the court-appointed and supposedly impartial expert, and told half-truths or worse to U.S. courts in attempts to prevent exposure of that and other wrongdoing. Ultimately, the LAP team wrote the Lago Agrio court’s Judgment themselves and promised $500,000 to the Ecuadorian judge to rule in their favor and sign their judgment. If ever there were a case warranting equitable relief with respect to a judgment procured by fraud, this is it.

The defendants seek to avoid responsibility for their actions by emphasizing that the Lago Agrio case took place in Ecuador and by invoking the principle of comity. But that warrants no different conclusion.

Comity and respect for other nations are important. But comity does not command blind acquiescence in injustice, least of all acquiescence within the bounds of our own nation.

Courts of equity long have granted relief against fraudulent judgments entered in other states and, though less frequently, other countries. Moreover, the United States has important interests here. The misconduct at issue was planned, supervised, financed and executed in important (but not all) respects by Americans in the United States in order to extract money from a U.S. victim.

That said, considerations of comity and the avoidance of any misunderstanding have shaped the relief sought here. Chevron no longer seeks, and this Court does not grant, an injunction barring enforcement of the Lago Agrio Judgment anywhere in the world.

What this Court does do is to prevent Donziger and the two LAP Representatives, who are subject to this Court’s personal jurisdiction, from profiting in any way from the egregious fraud that occurred here. That is quite a different matter. Indeed, the LAP Representatives’ lawyer recently conceded before the Second Circuit that the defendants “would not have a problem” with “the alternative relief that [Chevron] would be seeking, such as enjoining the person who paid the bribe from benefitting from it,” assuming that the judge was bribed.

Defendants thus have acknowledged the propriety of equitable relief to prevent individuals subject to the Court’s jurisdiction from benefitting from misdeeds for which they are responsible. And while the Court does enjoin enforcement of the Judgment by these defendants in the United States, that limited injunction raises no issues of comity or international relations. It is the prerogative of American courts to determine whether foreign judgments may be no different conclusion.

Comity and respect for other nations are important. But comity does not command blind acquiescence in injustice, least of all acquiescence within the bounds of our own nation.

Courts of equity long have granted relief against fraudulent judgments entered in other states and, though less frequently, other countries. Moreover, the United States has important interests here.  The misconduct at issue was planned, supervised, financed and executed in important (but not all) respects by Americans in the United States in order to extract money from a U.S. victim.

That said, considerations of comity and the avoidance of any misunderstanding have shaped the relief sought here. Chevron no longer seeks, and this Court does not grant, an injunction barring enforcement of the Lago Agrio Judgment anywhere in the world.

What this Court does do is to prevent Donziger and the two LAP Representatives, who are subject to this Court’s personal jurisdiction, from profiting in any way from the egregious fraud that occurred here. That is quite a different matter. Indeed, the LAP Representatives’ lawyer recently conceded before the Second Circuit that the defendants “would not have a problem” with “the alternative relief that [Chevron] would be seeking, such as enjoining the person who paid the bribe from benefitting from it,” assuming that the judge was bribed.1

Defendants thus have acknowledged the propriety of equitable relief to prevent individuals subject to the Court’s jurisdiction from benefitting from misdeeds for which they are responsible. And while the Court does enjoin enforcement of the Judgment by these defendants in the United States, that limited injunction raises no issues of comity or international relations. It is the prerogative of American courts to determine whether foreign judgments may be laws of any nation that aspires to the rule of law, including Ecuador – and they knew it. Indeed, one Ecuadorian legal team member, in a moment of panicky candor, admitted that if documents exposing just part of what they had done were to come to light, “apart from destroying the proceeding, all of us, your attorneys, might go to jail.”2

It is time to face the facts.”

Link to the judgement: http://tinyurl.com/o8p6gve

 

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PG&E Attempt to Improperly Influence California PUC Should Result in Penalty, City of San Bruno Demands in Legal Filing

Jack Hagan, CPUC Safety HeadElizaveta Malashenko

Jack Hagan and Elizaveta Malashenko of the CPUC Safety Enforcement Division made allegedly illegal deal with PG&E

San Bruno, Calif. – An attempt by Pacific Gas & Electric Company to broker what appears to be a secret deal with a California Public Utilities Commission staffer should result in significant penalties and fines for the utility company and the creation of an independent monitor to ensure transparency and accountability of the CPUC, San Bruno demanded in a legal filing with the CPUC today.

The apparent backroom deal, revealed in a report by Jaxon Van Derbecken San Francisco Chronicle newspaper, detailed how PG&E hoped to quietly pay  a $375,000 fine to avoid paying a proposed $2.5 billion in penalties and fines for the 2010 San Bruno explosion and fire that killed eight, injured 66, destroyed 38 homes and left a giant hole in the center of the city.

In a legal motion filed with the CPUC on Friday, San Bruno officials demanded that PG&E face a significant fine for violating CPUC rules when, in December, it paid a $375,000 fine imposed by the CPUC’s safety enforcement division – and then quietly asked that the fine count against the multi-billion-dollar penalty it faces for violations stemming from the San Bruno pipeline disaster.

It was revealed that no parties involved in the more than three-year San Bruno penalty proceeding were made aware of PG&E’s secret payment. Instead, the CPUC withdrew the fine and refunded the $375,000 payment amid concerns that PG&E had attempted to broker a backroom deal that could have triggered a form of regulatory double jeopardy, preventing the CPUC’s administrative law judges from levying a sufficient future penalty.

“Instead of being transparent and forthcoming, PG&E appears to have consciously elected to conceal an ill-fated attempt to quietly settle for the fatal and tragic pipeline disaster in San Bruno,” said San Bruno Mayor Jim Ruane. “We believe PG&E should be fined and reprimanded for trying to undermine the ongoing penalty investigation and possibly jeopardizing more than three years of work to ensure that what happened in San Bruno never happens again, anywhere.”

“This attempt to circumvent the legal and public process also raises troubling questions about the CPUC safety division and its staffer who attempted to conceal this backroom deal,” representatives for the city added. “This action is just the latest attempt by the PG&E and some members of the CPUC safety division to hide from public view the unholy alliance and power PG&E has with our State’s regulatory agency.  That is why San Bruno demands an independent monitor to ensure the CPUC is operating properly and transparently.”

The $375,000 fine was originally levied in December by the CPUC’s safety enforcement division in response to a 2012 audit, which concluded that for more than four decades PG&E lacked the proper procedures to monitor its gas-transmission pipelines. Reliable reports indicate that CPUC safety division deputy director Elizaveta Malashenko, who made this deal with PG&E, has a longstanding personal relationship with PG&E outside of her CPUC job.

Because the infraction related directly to the ongoing San Bruno-related penalty proceeding, it should have been handled as part of that process. Instead, it was handled and paid separately, without notification to any parties and in violation of CPUC’s own procedures.

San Bruno officials say they suspect that a backroom deal, involving illegal ex-parte communications between PG&E and the CPUC, played a role in this mishap. Attorneys for San Bruno have filed a public records request to determine whether PG&E officials spoke directly with CPUC leadership to arrange for the fine that PG&E paid – and later tried using to reduce their overall penalty.

In December, the CPUC fined PG&E $14 million for failing to disclose faulty pipeline records in San Carlos to both the CPUC, the public and the City of San Carlos for nearly a year, creating a possibly dangerous public safety issue that one of its own engineers likened to possibly “another San Bruno situation” in an internal email to PG&E executives.

San Bruno officials say this latest attempt to undercut its obligation to the public further underscores the need for an Independent Pipeline Safety Monitor to serve as a vigilant third-party watchdog over both PG&E and its regulator, the CPUC.

“The Commission lacks the resources to effectively comprehend and oversee PG&E’s compliance,” said the city’s filling. “An Independent Monitor would partner with and provide additional resources to the Commission in order to have more robust regulatory oversight necessary to protect the safety of the public.”

The San Bruno filing came on the same day as the announcement that CPUC Commissioner Mark Farron will be resigning from the Commission to concentrate on beating prostate cancer.

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San Francisco Christmas Eve Day Toy Drive for Children at Handlery Hotel by Firefighters is a Success

 

San Francisco Firefighters Union Local 798 held a successful toy drive to make sure no child went without a toy in San Francisco this Christmas, thanks to Jon Handlery and his family’s landmark San Francisco hotel.

 

Dressed as Santa Claus, San Francisco Firefighter Bob Cuff and costumed characters accompanied by off-duty firefighters were in front of the Handlery Union Square Hotel, 351 Geary (between Powell and Mason), San Francisco from 9 a.m. to midnight on Christmas Eve day.

 

Beloved hotel owner Jon Handlery and Handlery hotel staff served as “Santa’s Helpers” and assisted with the collection of thousands of toys for needy San Francisco kids.

 

The Handlery Hotel has raised $3,500 and donated two barrels of toys to the drive this year to ensure no kid were without a Holiday present.

 

Firefighters Union Local 798 asked people to bring unwrapped toys which were collected in front of the Handlery Hotel. Everyone who brought a toy got free pictures with Santa and many children brought their lists of Christmas wishes to Santa in person.

 

An additional toy drive was held just next door to the hotel at Lefty O’Doul’s bar and pub, a property which is also owned by the Handlery family.

 

SF Firefighters Local 798 Toy Program

 

The Local 798 San Francisco Firefighters Toy Program is celebrating its 64th year of providing toys to San Francisco children in need during the holidays.  The San Francisco Firefighter’s Toy Program is San Francisco’s largest and the nation’s oldest program of its kind.  Since 1949 it has evolved from a few firefighters repairing broken toys and bikes for 15 families to, in 2012, 300 firefighters and friends volunteering their time to distribute over 200,000 toys to more than 40,000 disadvantaged children.

 

Besides helping individual families in need, the Toy Program serves many community organizations, including shelters for abused women and children, inner-city schools, children’s cancer wards, and pediatric AIDS units.

 

The Toy Program is made possible through public donations and the efforts and contributions of Local 798 members.

 

Firefighters Union Local 798 wishes to thank Jon Handlery & the staff of the Handlery Union Square hotel for welcoming the Toy Program at their property.

 

 

The Handlery Union Square Hotel

 

Located at Union Square, the Handlery Union Square Hotel offers the perfect San Francisco lodging for vacationers and business travelers.  As a fourth generation family-owned hotel, the Handlery has created great experiences for guests by offering personal service, beautifully appointed rooms, and a warm atmosphere.  Ideally located right next to the world famous Powell Street cable car line, the Handlery Union Square Hotel is a beloved San Francisco institution.

 

 

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Canvasback Missions Takes a Major Step in the Fight Against Diabetes in the Marshall Islands

By Alexander Hirata

Canvasback Missions has spent years working to reverse the diabetes epidemic in the Marshall Islands. They’ve brought specialty medical care to the islands for over 30 years, and have run the Diabetes Wellness Center on Majuro since 2006. Now, Canvasback is working to reverse the epidemic of diabetes in the Marshall Islands by preventing the onset of the disease before it begins.

 

Made possible by a generous grant from the World Diabetes Foundation, Canvasback is working with Antonia Demas, Ph.D., and Marshall Islands health officials to bring health education into the classroom. Dr. Demas has visited the Marshall Islands twice so far, traveling last with Canvasback co-founder Jacque Spence and employee Jaylene Chung to implement trials of the new food education curriculum in the public schools on Majuro and Ebeye in October. The team trained instructors how to teach from the curriculum, which involves special hands-on activities to engage children and make food education fun.

 

Dr. Antonia Demas studied education, nutrition, and anthropology at Cornell University. She has developed food-based curricula for schools for over 40 years, successfully implementing her “Food is Elementary” program in over 3,000 schools. Demas is also the founder and president of the New York-based Food Studies Institute, a not-for-profit created to improve children’s health through food education.

 

One of Demas’ key beliefs is that the food we eat directly affects our health. Processed foods have replaced natural ones, and chemical preservatives are now a regular part of our diets. Demas believes that children are the ideal group to teach food literacy to: they don’t have established diets that are difficult to change; they are open to new ideas, especially if taught using sensory (taste, touch, and visual) methods; and healthy habits now would prevent illnesses later.

 

Canvasback is proud to work with Demas, because both know that food education is essential to reverse diabetes in the Marshall Islands. It is cost-efficient, slipping into the existing educational system, yet its effects will last for a lifetime. And once established, local schools and teachers will be in full control of the program. The most difficult part of the program won’t be getting kids interested in healthy eating–it will be waiting years to see how well it pays off.

 

To learn more about the work of Canvasback Missions, contact them at: 940 Adams St., Suite R, Benicia, Calif. 94510. Phone: 800-793-7245 or email them at info@canvasback.org

 

 

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California PUC to Consider Historic Fine Against PG&E and Orrick Herrington Law Firm Attorney in Faulty Gas Line Case

Joseph M. Malkin

PG&E and its Orrick Herrington Attorney are Facing Historic Fines and Legal Sanctions for Misleading the California Public Utilities Commission

The California Public Utilities Commission will vote on historic sanctions and a fine of up to $17 million against the Pacific Gas & Electric Corp. Thursday, Dec. 19 for failing to disclose faulty pipeline records in San Carlos to both the CPUC, the public and the City of San Carlos for nearly a year, creating a possibly dangerous public safety issue that one of its own engineers likened to possibly “another San Bruno situation” in an internal email to PG&E executives.

PG&E and its attorney Joseph M. Malkin of Orrick Herrington & Sutcliffe LLP law firm are facing a fine of up to $17 million for violating CPUC rules and discreetly filing an “errata” – the legal term for a minor correction – on the status of two pipelines, located in San Carlos and Millbrae, nearly a year after a gas leak unexpectedly revealed faulty records for those pipelines.

Pipelines listed as “seamless,” as in the case of the line that ruptured in San Bruno, were in fact a 1929 vintage welded and reconditioned gas pipe with a strength test less than records showed. The legal correction was made quietly on the afternoon of July 3, 2013, a day before the CPUC took off for the July Fourth holiday, disclosing the fact that PG&E had relied on faulty records to determine the specifications for those pipelines to handle gas at high pressure.

The Commission will make this decision three weeks after PG&E CEO and Chairman Tony Earley made a special presentation before the CPUC in an attempt to convince commissioners and the public of the company’s renewed commitment to safety. Earley was met with a skeptical commission, which challenged PG&E’s credibility in the face of mounting recordkeeping errors and threats to public safety. “We find ourselves here today with a public that doesn’t believe you and in many respects doesn’t believe us,” Commissioner Mike Florio said to Earley at the hearing.

City of San Bruno officials have agreed with the proposed fine against PG&E and are calling on the CPUC to uphold proposed sanctions against PG&E for deliberately covering up the facts after it used faulty records to determine that two Bay Area pipelines could safely operate – a decision demonstrating the continued problem with PG&E record keeping practices. Bad record keeping was one of the causes of the 2010 PG&E disaster in San Bruno and continues to threaten public safety.

Calling the July 3 PG&E filing a “brazen and calculated act of damage control,” San Bruno attorneys say PG&E’s legal maneuver illustrates PG&E’s ongoing attempts to cover its tracks as it continues to use natural gas pipelines at inappropriate operating pressures, without accurate records and with the same flawed materials that caused a tragic explosion and fire in San Bruno that killed eight, destroyed 38 homes and damaged scores more.

City officials were shocked to discover that, after gross negligence and bad recordkeeping by PG&E resulted in the fatal tragedy in San Bruno, PG&E paid its legal team to perpetuate their deception at the risk of public safety. They are now calling on the CPUC to issue sanctions and send the strong message that such behavior will not be tolerated. Officials question how many communities must endure tragedy before PG&E and our state utility regulators wake up and put safety first.

Faulty recordkeeping was found to be a major contributor to the explosion and fire in San Bruno after federal and state investigators found that PG&E had maintained bad or nonexistent pipeline safety records for much of its 1,000+ miles of urban natural gas transmission lines. As a result, state regulators required PG&E to lower pressure on its other Peninsula gas pipelines until safety records could be verified.

In 2011, PG&E declared that the pipeline construction records were accurate for both Line 101, which runs from Milpitas to San Francisco, and Line 147, which runs in the San Carlos area. Based on PG&E’s representations, the CPUC allowed PG&E to increase the pressure back to pre-explosion levels.

In reality, PG&E’s pipelines were not rated to operate at higher pressure, as revealed after an October 2012 corrosion-related leak in San Carlos revealed seams in the pipeline previously not thought to exist. Yet, it took nine months for the company to admit – by way of the subtle “errata” filing — that the records it had relied on to make that determination were faulty.

At previous CPUC hearings, regulators pressed PG&E over the “profoundly troubling” oversight, which occurred despite “the expenditure of hundreds of millions of dollars for record review and validation.” PG&E now faces fines of up to $17 million, on top of a possible $2.25 billion penalty and fine stemming from the fatal 2010 explosion and fire in San Bruno.

San Bruno officials say this is just the latest example of PG&E expending millions on top attorneys – more than $120 million by PG&E’s own admission – to subvert the truth and put profits over people.

 

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CPUC Should Fine PG&E, Orrick Law Firm Millions for Gas Pipeline Safety Cover-Up Says City of San Bruno

CPUC Should Sanction and Fine PG&E and its law firm Orrick Herrington & Sutcliffe and Attorney Joseph M. Malkin in Public Gas Line Safety Cover-up

San Francisco, Calif. – City of San Bruno officials this week called on the California Public Utilities Commission to sanction Pacific Gas & Electric’s legal team for deliberately covering up for PG&E after it used faulty records to determine that two Bay Area pipelines could safely operate – a decision demonstrating the continued problem with PG&E record keeping practices. Bad record keeping was one of the causes of the 2010 PG&E disaster in San Bruno and continues to threaten public safety.

In a filing late Sept. 26 with the CPUC in response to an order to “Show Cause Why It Should Not Be Sanctioned,” San Bruno asked that PG&E’s legal team, including top attorney Joseph M. Malkin of Orrick, Herrington & Sutcliffe, be sanctioned for discreetly filing an “errata” – the legal term for a minor correction – on the status of two pipelines, located in San Carlos and Millbrae, nine months after a gas leaked revealed those pipelines. The legal correction was made quietly on the afternoon of on July 3, 2013, a day before the CPUC took off for the July Fourth holiday, as a strategy to hide the fact that PG&E had relied on faulty records to determine the specifications for those pipelines to handle gas at high pressure.

Calling the July 3 filing by Malkin a “brazen and calculated act of damage control,” San Bruno attorneys say PG&E’s latest legal maneuver illustrates PG&E’s ongoing attempts to cover its tracks as it continues to use natural gas pipelines at inappropriate operating pressures, without accurate records and with the same flawed materials that caused a tragic explosion and fire in San Bruno that killed eight, destroyed 38 homes and damaged scores more.

“Gross negligence and bad recordkeeping by PG&E resulted in a fatal tragedy in our community, and now we’re discovering that PG&E is paying its legal team to perpetuate their deception at the risk of public safety,” said San Bruno Mayor Jim Ruane. “PG&E and its lawyers continue to play Russian roulette with people’s lives, and we are calling on the CPUC to issue sanctions and send the strong message that this behavior will not be tolerated. How many communities must endure tragedy before PG&E and our state utility regulators wake up and put safety first?”

Faulty recordkeeping was found to be a major contributor to the explosion and fire in San Bruno after federal and state investigators found that PG&E had maintained bad or nonexistent pipeline safety records for much of its 1,000+ miles of urban natural gas transmission lines. As a result, state regulators required PG&E to lower pressure on its other Peninsula gas pipelines until safety records could be verified.

In 2011, PG&E declared that the pipeline construction records were accurate for both Line 101, which runs from Milpitas to San Francisco, and Line 147, which runs in the San Carlos area. Based on PG&E’s representations, the CPUC allowed PG&E to increase the pressure back to pre-explosion levels.

In reality, PG&E’s pipelines were not rated to operate at higher pressure, as revealed after an October 2012 corrosion-related leak in San Carlos revealed seams in the pipeline previously not thought to exist. Yet, it took nine months for company attorneys to admit – by way of the subtle errata filing — that the records it had relied on to make that determination were faulty.

At a Sept. 6 hearing at the CPUC, state regulators pressed PG&E attorney Joseph Malkin over the “profoundly troubling” oversight, which occurred despite “the expenditure of hundreds of millions of dollars for record review and validation.” PG&E now faces fines of up to $250,000 for its mistake, on top of a possible $2.25 billion penalty and fine stemming from the fatal 2010 explosion and fire in San Bruno.

San Bruno officials say this is just the latest example of PG&E expending millions on top attorneys – more than $120 million by PG&E’s own admission – to subvert the truth and put profits over people.

At the Sept. 6 hearing, the PG&E legal team was selectively unresponsive to questions posed by the CPUC’s administrative law judges, invoking “attorney-client privilege,” which allowed them to dodge tough questions. Attorneys for San Bruno are asking that the CPUC conclude that PG&E waived its attorney-client privilege.

“Enough is enough. San Bruno will not sit by and watch PG&E willingly take advantage of public trust any longer,” Ruane said. “Three years after tragedy struck our community, we will continue to serve as a vigilant watch dog for public safety so that what happened in our community never happens again anywhere.”

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America’s Cup: Is Emirates New Zealand Team Celebrating America’s Cup Jury Decision Too Soon?

America’s Cup: Jury Rigged?

The level of glee by the Emirates New Zealand  team and news media over foibles of Oracle Team USA has taken such a decidedly nasty turn that members of the International Jury have delayed their decision over what penalties, if any, should be given to defending America’s Cup champion team in the “weighting scandal.”

Clearly, Oracle Team USA made a serious mistake. Who in Hell puts weights on a ship to make it go faster? And, who in Hell does it in “pre-season” matches when it doesn’t matter in scoring America’s Cup races?

It was a stupid move by someone/s on Team USA, but it shouldn’t impact the most sought after silver trophy in the World, The America’s Cup.

But the New Zealand team, and the media down-under, have gone “John Bull Mad” over the alleged scandal and created such an ugly scene they have brought disrepute on themselves as much as Team USA. It’s embarrassing to read the ‘homer” news copy from the Kiwis.

The N.Z. media’s fawning stories about the “cheating scandal” and how it has harmed the sport are hogwash.  The America’s Cup is always controversial and the Kiwi’s namby-pamby media patter has made the entire sport look amateurish, low-class and soft.

The jury should make its decision and it should be fair and square–something that has not been so far with leaks from the Jury and other questionable allegations making their way into the media.

The Jury’s pending decision should not be delayed any longer and the decision must be commensurate with the alleged wrong doing: if no harm and no impact was had on the America’s Cup race itself, why should any of the sailors or Team USA be penalized? Really?

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Did PG&E CEO Tony Earley Lie to Bloomberg News on Bankruptcy Statement on CPUC San Bruno Fine?

 

Did PG&E CEO and Chairman Tony Earley Knowingly Mislead Bloomberg News and Wall Street?

 

Pacific Gas & Electric Company CEO Tony Earley’s statement to Bloomberg News this week has landed the utility executive between a rock and hard place.

The City of San Bruno today criticized statements by the top executive of Pacific Gas & Electric Company who told Bloomberg News on Tuesday that a proposed penalty and fine by the California Public Utility Commission (CPUC) for the deadly 2010 PG&E gas pipeline explosion in San Bruno could force the utility into bankruptcy – statements that contradict the sworn legal testimony of PG&E’s own finance expert.

PG&E Chairman and Chief Executive Officer Tony Earley told Bloomberg in a news interview the proposed $2.25 billion penalty and fine for the Sept. 9, 2010 explosion in San Bruno that killed eight, destroyed 38 homes and damaged the community could not be funded with equity alone. He told the news service the penalty would require PG&E shareholders to sell billions in additional stock and, if shares failed to sell, could land PG&E in bankruptcy.

San Bruno city officials said these comments contradict the findings of multiple experts, including PG&E’s own paid finance consultant.

“Mr. Earley’s comments are inconsistent with the company’s own sworn testimony made before the CPUC on March 5 this year,” said San Bruno Mayor Jim Ruane. “PG&E’s own expert said the company has the financial capability to withstand a penalty of this magnitude. We are deeply concerned that these comments could mislead the market, shareholders, and the public, and we hope these were not made in a deliberate attempt to influence the outcome of the ongoing penalty process.”

Earlier this year, PG&E’s paid expert, Eric O. Fornell of Wells Fargo Securities, said during a penalty proceeding under oath that it was “doable” for PG&E to issue equity or raise enough capital to cover a $2 billion penalty. His statements followed a separate, impartial report by Overland Consulting, independently commissioned by the CPUC in 2012, which similarly found that PG&E would be able to afford a $2.25 billion penalty without hurting its creditworthiness.

Meanwhile, PG&E stock prices remain strong. PG&E Corp.’s second-quarter earnings rose 39 percent as the utility reported stronger revenue and lower charges related to its natural-gas pipeline efforts, among other items.

The company’s solid financial footing and multiple expert findings are partly what guided the $2.25 billion recommendation of the CPUC’s safety division, which issued its revised penalty proposal in July. The proposed $2.25 billion penalty would fund ongoing safety improvements and include a $300 million fine to PG&E shareholders, which is not tax deductible and would be paid directly to the State of California’s general fund. In addition, the proposal also curtails PG&E’s ability to deduct “credits” for safety repairs made since the 2010 explosion and fire – a provision San Bruno has advocated strongly for.

San Bruno officials said they support elements of the CPUC’s proposed penalty, but given the scope and magnitude of PG&E’s misconduct, they are pushing for a penalty of $3.8 billion, which would amount to $2.45 billion in after-tax dollars. This penalty would also fund ongoing safety improvements and give no credits for past expenses. San Bruno based its recommendation on the Overland report, which determined that PG&E could bear a maximum financial consequence of $2.45 billion and remain solvent.

San Bruno said it will also continue pushing the CPUC to direct PG&E to adopt and fund a series of remedial measures that will ensure systemic regulatory change in the future. These include $5 million per year for a “California Pipeline Safety Trust,” an Independent Monitor to make sure PG&E follows its own safety plan in the face of possible lax enforcement and the installation of lifesaving Automated Shutoff Valves.

The CPUC’s five-member commission is expected to issue its final recommendation in coming months.

“As we approach the three-year anniversary of this devastating tragedy, we remain firm in our belief that the only way to prevent future accidents is by penalizing PG&E to the maximum,” Mayor Ruane said. “The independent experts – even PG&E’s – have agreed that PG&E is financially able to weather a penalty of this magnitude—and then some. We are now looking to the CPUC to do the right thing and penalize PG&E in order to send a strong message that public safety cannot be compromised by the bottom line.”

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Centerplate and Teamsters Reach Agreement for Employees at AT&T Park, Other SF Venues: New Pressure on Local 2 UNITE HERE to Bargain in Good Faith

San Francisco—Centerplate, one of the largest hospitality and concession companies in North America, and San Francisco’s Teamsters Local 853 recently announced the ratification of a collective bargaining agreement for 200 retail and food service employees working at AT&T Park, Candlestick, and the Cow Palace. The agreement, which extends through March 31, 2016, includes an immediate wage increase, a signing bonus and excellent health and welfare benefits.

The announcement comes as Local 2 Unite Here refuses to respond to Centerplate’s proposals for a wage increase and bonus for food service workers at AT&T Park and Candlestick. Rather than negotiating a fair deal with Centerplate, Local 2′s Union boss, Mike Casey, has stated for months he will not agree to Centerplate’s economic proposal while at the same time refusing to provide a counter proposal.

“Centerplate would like to thank the Teamsters for working with us to achieve a deal for our employees and provide our team with the wages and benefits they deserve,” said Sam Singer, spokesperson for Centerplate. “It is bizarre to us that we can come to terms with the Teamsters in a matter of hours for an agreement that provides for improved wages, while Local 2 continues to focus on irrelevant issues. We invite Local 2 to return to the table with a renewed sense of urgency to accept our proposal that immediately puts money in the pockets of our employees—their members,” said Singer.

The agreement reached between Centerplate and the Teamsters took a total of 6 hours and includes the following terms:

1)      An immediate $1.50 per hour increase and a minimum of a $.40 per hour increase in years 2 and 3 of the contract for Food Service workers;

2)      A $500 signing bonus for Food Service workers who worked at least 40 events last year;

3)      An immediate $1.40 per hour increase and a $.30 per hour increase for years 2 and 3 of the contract for Merchandise workers;

4)      A $100 signing bonus for Merchandise workers who worked at least 40 events last year; and

5)      A $5,000 increase in pension contributions per year, raising Centerplate’s annual pension contribution to $20,000 per year.

Last month, Local 2 union leaders walked out on contract negotiations with Centerplate and a Federal Mediator, once again failing to make an economic counter proposal, thereby denying, for the time being, Centerplate’s employees at AT&T Park and Candlestick the economic benefits that would flow from a new contract.

“We hope this sends a clear message to Unite Here’s labor boss, Mike Casey, that it’s possible that we can reach a fair and reasonable deal, but that doing so requires both parties to focus on the best outcome for Centerplate’s employees, not on third parties,” said Singer. “These past few months, Mike Casey has spent almost as much time picketing and demonstrating as he has sitting at the negotiation table where a fair deal awaits Centerplate employees. Ultimately, it’s the employees who are paying the price. Centerplate’s deal with the Teamsters demonstrates again that we are willing to deliver bonuses, salary increases, and the health and welfare security that our employees deserve,” said Singer.

Under Union boss Casey, Local 2 continues to make non-economic demands outside of the concessionaire’s control and has threatened years of potential labor strife and demonstrations. In May, Local 2 was sued by Centerplate for attempting to illegally force the San Francisco Giants into signing a “successor addendum” that would bind the baseball team, and any future concessionaire at AT&T Park, to the same terms Local 2 negotiates with Centerplate. This action is illegal under federal labor law, Centerplate officials said, because the foodservice employees at AT&T Park are employed by Centerplate and not the San Francisco Giants, who are being unfairly dragged into a fight that is not theirs to have.

As a seasonal, part-time labor force, Centerplate’s employees currently earn the highest wages in the nation, making an average of approximately $15 to $20 per hour. These part-time employees also receive some of the best benefits, with fully paid healthcare individually and for their families. Most of these workers do not work enough hours to qualify for health benefits under Obamacare, but Centerplate has provided it to them all along.

To ensure seamless exceptional service for fans, Centerplate has made an offer than includes:

  • A ratification bonus of approximately 4.5 percent—$500—for those who worked more than 40 games in 2012;
  • A 1.7 percent annual wage increase on top of what already is the best compensation package in the industry;
  • Increased contribution of 9.2 percent to the Unite Here benefit plans; and
  • Employer paid health care for employees and their families.

For months, Centerplate has been in negotiations over a new contract. Local 2 delayed requesting negotiations for nearly two years and, even after it first offered to bargain, Local 2 dragged its feet and delayed negotiations. Throughout this time, Centerplate has been encouraging Local 2 to move quickly to find a solution.

“Nothing is more important to Centerplate than our employee partners and the customer service experience we provide guests. Local 2’s actions and demands are an attack on our guests and the community groups we partner with at AT&T Park and Candlestick. It is time for Local 2 to come back to the table and focus on a realistic agreement,” Singer said.

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San Bruno Commends Improved CPUC Recommendation to Punish PG&E, Demands Even Tougher Remedies from Regulators

San Francisco—The City of San Bruno today commended the latest legal filing by the California Public Utilities Commission’s safety division and called the improved penalty and fine proposal of $2.25 billion against Pacific Gas & Electric Company “a step in the right direction” to punish the utility for its gross negligence that caused the Sept. 9, 2010 San Bruno explosion and fire.

 

San Bruno officials have long demanded that PG&E pay the maximum for the tragic explosion and fire that took eight lives, destroyed 38 homes, and damaged scores more.  The City today said it will continue its push for additional remedies, including lifesaving fully automated safety shutoff valves and an independent safety monitor to serve as a watch dog for the completion of required system safety improvements.

 

San Bruno is also asking that the CPUC mandate that PG&E fund a Pipeline Safety Trust in California, an independent group that would advocate for pipeline safety and would serve as a legacy to the tragic explosion.  San Bruno has until Aug. 1 to file its formal response to the CPUC.

 

“The latest penalty proposal is a long-awaited step in the right direction for public safety, and we commend the attorneys within the CPUC’s safety division for exhibiting the courage to significantly strengthen the division’s previous, and inadequate, penalty recommendation,” said San Bruno Mayor Jim Ruane. “While we wholeheartedly support the tougher penalty and fine, the City of San Bruno will continue to fight for additional and ongoing safeguards to protect the public and help us ensure that what happened in San Bruno never happens again, anywhere.”

 

The City cautioned that it just received the CPUC safety division filing this morning and needs to review it thoroughly before fully commenting on the revised proposal.

 

The CPUC’s revised $2.25 billion penalty and fine proposal replaces the CPUC’s original — and now discredited — recommendation announced with much hype by Jack Hagan, director of the CPUC’s safety division, in May but which was soon revealed to be 100 percent tax-deductible and littered with credits and perks to benefit PG&E, amounting in a net penalty of almost nothing for the utility.

 

Not one of the CPUC safety division’s senior attorneys agreed to sign the original penalty recommendation, calling it “unlawful” and “contrary to what our team had worked to accomplish in the last two and a half years.” Those attorneys were reassigned off the investigation as a result of their protest.

 

The shocking internal turmoil at the CPUC led San Bruno to call for an investigation by the California Attorney General and the State Legislature and, ultimately, forced the recusal of the CPUC’s chief counsel and the lead attorney on the case, Frank Lindh, a former PG&E attorney.

 

The formerly reassigned attorneys returned to the investigation and last week they requested to withdraw the old filing and “correct certain inaccuracies,” characterizing the events as “unorthodox.”

 

The amended filing not only imposes a tough penalty of about $2.25 billion that will fund ongoing safety improvements but it also incorporates a $300 million fine to PG&E shareholders, which is not tax deductible and would be diverted into the State of California’s general fund. In addition, the proposal also curtails PG&E’s ability to deduct “credits” for safety repairs made since the 2010 explosion and fire – a provision San Bruno has advocated strongly for in the past.

 

And while city officials say they generally support the monetary component of the CPUC’s revised proposal, given the widespread dysfunction at the CPUC, they will continue to push for PG&E to adopt and fund a series of remedial measures to ensure systemic regulatory change in the future. These include funding for a California Pipeline Safety Trust advocacy organization, an Independent Monitor to make sure PG&E follows its own safety plan in the face of possible lax enforcement, and the installation of lifesaving fully Automatic Shutoff Valves.   The City also opposes the proposed $435 million credit to PG&E shareholders which effectively reduces the  penalty against PG&E to $1.815 billion.

 

“While we continue to applaud those CPUC attorneys who displayed exceptional courage in their effort to uphold justice for the people and victims of San Bruno, we believe the level of chaos and disarray at the CPUC is proof that additional, going-forward remedies are needed, specifically an Independent Monitor to oversee the CPUC’s activities and correct the overly cozy relationship with the CPUC,” Ruane said. “We will continue to fight for additional safeguards so that, as the legacy of the City’s involvement in this process, we can feel confident that the state’s regulatory and public utility systems are changed for the better.”

 

 

Contact: Connie Jackson, City Manager

Phone: (650) 616-7056

Sam Singer, Singer Associates

Office: (415) 227-9700

 

 

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America’s Cup Shocker in San Francisco: Louis Vuitton Wants its Money Back for Race Sponsorship

One of the most prestigious and longest running sponsors of the America’s Cup wants some of its money back, according to the San Francisco Business Times.

Louis Vuitton, the posh French retailer that has been a primary financial backer of the competition, wants $3 million refunded because so few teams have entered.

Louis Vuitton’s initial sponsorship was for $10 million, according to an America’s Cup source. Its contract was based on at least eight teams taking part in the Louis Vuitton Cup, a round-robin playoff to determine which team will ultimately sail against Oracle Team USA in the America’s Cup championship.

There are three teams entered in the Louis Vuitton Cup: Italy’s Luna Rossa, Sweden’s Artemis Racing and Emirates Team New Zealand.

Since the 1980s, there have been anywhere from 7 to 13 teams taking part in the competition. Several potential challengers — from Korea, France, Australia, Spain and Italy — pulled out of the America’s Cup, many citing the financial burden of competing at sailing’s highest level.

Louis Vuitton can get a $1 million rebate for each team less than six that participate, the Cup source said. That would mean the company is entitled to get $3 million back.

Should any of the remaining teams pull out of the competition — which they have hinted they might do — Louis Vuitton would be entitled to even more money back.

A spokesman for the America’s Cup, which began this week and runs until September, was not immediately available for comment.

A Louis Vuitton spokesman was not immediately available for comment. But a Louis Vuitton representative told a New Zealand newspaper that the company was “not happy” with the Louis Vuitton Cup so far.

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Audubon Society Accused of Fraudulent Land Grab By Ranchers: How Audubon Society Used “White Out” To Change Boundries

MAYACAMAS MOUNTAINS, Calif. — A group of California families are accusing the National Audubon Society of whiting out parts of maps to swindle them out of their best land. This is property that in some cases has been in the families’ hands since the 1920s.

The Cervieres brothers, immigrants from France, came to California in 1895. By 1924 they had money to buy beautiful plots of land high up in the Mayacamas Mountains, towering over Sonoma wine country in northern California.

They wanted a place of retreat and refuge for what they hoped would someday be a large and extended family of Cervieres. Their descendants became five families who bought even more land in the Pine Flat area of these mountains.

And they did form a tradition across the decades of enjoying almost every major family occasion, summers and holidays in this mountain paradise. They built five homes they collectively dubbed “the ranch.”

“The ranch was like the lifeblood, the glue that held the family together,” said Lea Raynal, now one of the extended family’s matriarchs.

But a fire swept through in 2004 and burned down three of the houses.

“Torched this whole thing,” Lea’s son Mike Raynal said, looking up at a bare chimney that’s all that’s left of one home.  “We lost everything.”

Family members felt horrible but fanned hope by deciding to rebuild as quickly as possible.

Another Blow

Then came another devastating blow from a surprising source. A neighbor had bequeathed thousands of acres next door to the National Audubon Society, best known for its love of birds and conservation.

To rebuild, the families would need to upgrade the roads leading across Audubon land to accommodate their heavy construction equipment.

But after decades of everyone sharing these roads, Audubon said no and then hit the families with yet another bombshell: It said it had proof their very best acres, the flat ones where their houses had been, were actually Audubon land.

“It was like being hit in the stomach, the wind knocked out of you,” Lea recalled.

Audubon representatives showed the family survey maps that appeared to bolster Audubon’s claim, maps that years later family members would find had parts whited out by Audubon.

According to the family’s lawyer Peter Prows, the reps gave them an ultimatum:  “We’re not going to let you rebuild your homes unless you agree to the boundary as we’re claiming it to be on our drawings.”

Mike’s brother, Phil Raynal, said that would have pushed family members’ new houses “approximately 300 yards up the hill, way up in an upper meadow – virtually impossible to build on.”

“This is the only flat area,” he said, pointing to the area around him where their houses had been.

Prows said Audubon then informed the families, “If you don’t agree, we’re going to go out and build a fence on that line, and if you try to interfere, we’re going to call the police.”

Legal Battle Begins

In court documents later, Audubon insisted it believed its claim that it truly owned the best acres of its next-door neighbors.

And since it was legally bound to preserve the wilderness acres bequeathed it, the company said it couldn’t just hand those acres back to the families if it really owned them.

Audubon said it held meetings and bent over backwards to work out a deal with the families.

But here’s what Phil heard from an Audubon representative at one of those meetings: “This property has never, ever been yours. Get over it.”

“That haunts me. I tell you what, that haunts me every day,” he said.

Phil and his family accuse Audubon of simply coveting their land.

“It really bothers me that they’d come up here and try to take something that’s ours,” Phil’s young son Ryan said.

So the families decided to fight, with Mike and Phil Raynal leading the way. They threw themselves into a years-long effort to prove the ancient boundaries were correct and their land was indeed theirs, not Audubon’s.

A Costly Fight

Their efforts cost them and their families hundreds of thousands of dollars across several years, and much more than just money but “thousands and thousands and countless hours,” Phil said, shaking his head.

The brothers for years cut their way through rugged brush to find the original surveyors’ landmarks, facing rattlesnakes, ticks, poison ivy, and exhaustion.

They both already had full-time jobs. This fight became another one. Mike’s daughter Danielle feels it cost her her father.

“I’ve lost a father pretty much,” she said. “Me and my dad were very close, and it’s been hard. We’ve all drifted apart.”

Some family members were not only spending every spare hour fighting to prove Audubon wrong. But while all this was working its way through the legal system, the families couldn’t rebuild and were cut off from their piece of paradise and all those family gatherings like they’d had for decades.

“You have family reunions. You’re always having holidays,” Danielle remembered as she recalled how the five families would spend months of each year together on the ranch.

“And then it’s just an abrupt stop,” she said.

“Everybody getting together. It was just absolutely amazing,” Danielle’s mother Carin Raynal recalled. “And this whole debacle has just torn all of it apart.”

Another family member, Bruce Young, testified in a sworn declaration.

“There’s no doubt in my mind whatsoever that the emotional stress and aggravation to which Audubon subjected me is the cause and underlying reason for the three strokes I have suffered and survived,” he said.

‘White Out’ Gate

Then another stunning surprise in 2010 after years of legal wrangling: Audubon caved and said it would accept the original property lines and let the families use the roads unimpeded.

“They completely capitulated,” Prows stated.

No one outside of Audubon knows why this capitulation, but one more shock was ahead. In 2012, the families’ lawyers discovered with a subpoena that at the start of all this, Audubon had held back from family members some of the surveying maps it had commissioned.

They had also altered the maps they presented to prove Audubon’s claim.

“Audubon had actually doctored the drawings that it showed to our clients,” Prows said. “It took white out, and we have emails from Audubon’s very top people talking about putting white-out on the maps – removing the lines that its surveyors had put on the maps that Audubon didn’t like, showing that the boundary really was in the right place all along.”

This screamed lies and coverup to the families.

“We actually call it ‘White Out Gate’ now,” Phil said.

He still gets mad thinking of those thousands of hours he and Mike spent researching, gathering documents, combing through the thick brush on their land.

“Really what sunk in was all those years – seven, eight years of hard work when they knew from day one this was never their property. Ever! They knew it,” Phil fumed.

“I couldn’t believe anybody would do that,” Mike Raynal said. “I wouldn’t do that to another human being, period.”

A Bid for Restitution

Now the families are suing for fraud. Audubon admitted in court documents it didn’t give them all the surveyor’s maps but said that was because not all were relevant. It said it did white out lines on the maps but only lines it said were extraneous.

Audubon calls this lawsuit frivolous, demanding the families pay its legal bills.

Family members refuse to give an inch because all these years of legal war have certainly cost them.

“It’s affected everybody mentally, physically, emotionally,” Carin Raynal said.

When CBN News asked repeatedly for an interview or written comments, Audubon suggested researching the court documents and would only give the following mission statement:

“Audubon is fully committed to its mission as a non-profit organization dedicated to faithful care of the earth. We believe that every person on earth is a steward of land, air, water and wildlife. We believe that safeguarding America’s great natural heritage builds a better world for future generations, preserves our shared quality of life, and fosters a healthier environment for all of us.”

Lea Raynal summed up her family’s feelings about Audubon: “They came in and stirred up all this mess, and we’re left with nothing.”

From a CBN News Report

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Top CPUC Attorney Calls upon Attorney General Kamala Harris to Investigate Charges Against Him of Unethical Action in PG&E San Bruno Explosion Case

This evening there is a growing firestorm in the California Public Utilities Commission legal department as attorneys are openly questioning the ethical behavior of the CPUC’s General Counsel Frank Lindh in removing attorneys from the penalty phase against PG&E for its gross negligence in the San Bruno explosion and fire.

The top public safety division attorneys quit the case this past week after spending nearly three years of their careers attempting to bring Pacific Gas & Electric Co. to justice for the death and destruction caused by its failure to maintain its pipeline in the center of the City of San Bruno.

The safety division attorneys rebelled and had refused to put their names to a CPUC document because they told the CPUC General Counsel Frank Lindh of its illegality.  Insiders say the overwhelming majority of attorneys in the CPUC are now lining up against Lindh and in support of their colleagues.  They are privately raising issues of conflict of interest between CPUC President Michael Peevey, PG&E and Frank Lindh, who formerly was a PG&E employee prior to joining the CPUC.

A number of news stories by the San Francisco Chronicle’s Jaxon Van Derbeken, NBC 11 investigative reporters Tony Kovaleski and Liz Wagner, Mercury News Reporter Joshua Melvin and editorials in the Merc News and Sacramento Bee have shed light on CPUC conflicts and now the State agency appears to be spinning out of control.

Last night a special investigative report by NBC 11 reporters Kovaleski and Wagner showed CPUC President Peevey at a PG&E employee union event honoring him for his ‘leadership in safety’ which raises questions about conflict of interest as well as video footage that shows his possibly illegal ex-parte contact with CPUC safety division director Jack Hagen.

There is a growing revolt and more news and action is expected this week from attorneys inside the CPUC as well as parties in the case against PG&E, which includes its own Division of Ratepayer Advocates,  consumer advocate TURN, the City and County of San Francisco’s City Attorney Dennis Herrera, and the City of San Bruno, which has called upon attorney General Kamala Harris—followed by the same call from Lindh—to investigate the CPUC immediately.

The conflict has broken out into an open dispute this week when Lindh found he was talking to an unfriendly forum—his own staff—when he gave the keynote speech Monday at a legal conference his agency is hosting, according to a report first published by The Recorder reporters Max Taves and Cheryl Miller yesterday and picked up today in the American Bar Association Journal and Law.Com.

Attendees from around the country watched as top in-house CPUC lawyer Frank Lindh was heckled during his speech about staff attorneys at a “hypothetical” utility regulator who lacked judgment and loyalty, the Recorder reports.

Specifically, his speech discussed what duty of loyalty is owed by a staff lawyer who strongly disagrees with a client’s legally permissible position on a rate-setting proposal.

“My solution in this circumstance would be to ask for a reassignment, but also to take steps to make sure I am not leaving my client in the lurch by withdrawing at the last minute,” said Lindh. “In the end, it all comes back to loyalty.

Under the canons of ethics, I simply cannot be disloyal to my client, even in the circumstance where I disagree strongly with my client’s wishes.”

His comments at the National Conference of Regulatory Attorneys conference in San Francisco were apparently relevant to the recent reported reassignment of an entire team of CPUC lawyers. They were responsible for handling litigation over Pacific Gas and Electric Co.’s culpability in a 2010 natural gas explosion and fire that killed eight people and destroyed 38 homes.

The four-lawyer team had taken a position that supported the city of San Bruno’s call for more than $2 billion in fines to be imposed on the gas company, and the city asked earlier this month for the state attorney general and lawmakers to look into the lawyers’ reassignment.

In a Friday interview, Lindh also said the AG should investigate—to set the record straight—and said he “begged the attorneys to stay on the case,” the Bay Area News Group reported in an article published by the San Mateo County Times.

They withdrew from the case,” Lindh said, “and they left me with the obligation to fill in behind them.”

However, in an email to Lindh leaked to the newspaper that was also sent Friday, assistant CPUC general counsel Harvey Morris said the team had not sought reassignment. He said they had refused to sign a brief they believed to be unethical, apparently over concerns that it made unlawful recommendations about the penalties that should be assessed against the gas company in the San Bruno case, according to the Bay Area News Group article and other media reports.

Because you did nothing to resolve our ethical concerns, one attorney asked to be taken off the case, and then you claimed that all of us asked to be reassigned,” Morris wrote.

Frank Lindh, CPUC General Counsel Accused of Conflicts with PG&E, calls upon California Attorney General to Investigate Him, CPUC Actions

 

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California Center for Sustainable Energy Rolls Out Plug in Vehicle Presentation in San Francisco

San Francisco residents learned about recent advancements in the electric vehicle revolution sweeping across California this week at a presentation by California Center for Sustainable Energy.  The event featured presentations and an owner panel discussion on plug-in electric vehicles (PEVs) as well as test-drives of some of the newest models for 2013.

“The Future is Electric: Plug In and Get There” was sponsored by the California Center for Sustainable Energy, SF Environment and San Francisco Clean Cities Coalition.

California is the nation’s largest PEV market with roughly 35 percent of the U.S. total. During the fourth quarter 2012, sales of PEVs in California reached a record-setting 2.5 percent of all new cars purchased or leased in the state.

During the workshop, Colin Santulli a CCSE transportation program manager outlined the financial and environmental benefits of PEV ownership and the currently available incentives. CCSE administers the statewide Clean Vehicle Rebate Project, a program of the California Air Resources Board. Since 2010, CCSE has issued more than $42 million in vehicle incentives and helped to educate Californians on the availability and benefits of zero-emission vehicles.

“By making the switch to cleaner, more efficient plug-in electric vehicles, individuals can reduce their use of petroleum and help create cleaner air for all of us,” Santulli said. “This workshop was a great opportunity for people to learn about the first-hand experiences of their neighbors who already own PEVs.”

Representatives from Pacific Gas & Electric and ICF International gave presentations aimed at consumers considering making the switch to a PEV. After the presentations, a PEV fair on Fulton Street included vehicle displays and test-drives and exhibit booths featuring PEV technologies, car-sharing and alternative transportation. Cars available included the Chevy Volt, Nissan Leaf, BMW ActiveE and Ford Focus.

The California Center for Sustainable Energy (CCSE) is an independent, nonprofit organization that accelerates the adoption of clean and efficient energy solutions including administration of the statewide Clean Vehicle Rebate Project for the California Air Resources Board. For more information and workshop listings, visit www.energycenter.org or call 858-244-1177.

 

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Santa Clara Supervisor Candidate Teresa Alvarado Lobbied for PG&E—Now Advocates Reform, but in the Past She Lobbied for 37% Energy Rate Hikes

Currently promoting herself as ‘the candidate for reform,’ District 2 Santa Clara County Board of Supervisors candidate Teresa Alvarado was once a lobbyist for Pacific Gas & Electric Co., where her job was to defend residential and commercial utility price increases of up to 37 percent for Bay Area residents, records show.

Today, Alvarado likes to position her role at PG&E as an advocate for solar energy, but records show she was also a government relations lobbyist for the monopoly utility. One of her jobs was to advocate for rate hikes and urge consumers to reduce energy consumption to decrease utility bills.

Just months before PG&E would announce that it was declaring bankruptcy, records from the Los Altos City Council meeting of Feb. 27, 2001, note that “Teresa Alvarado, Public Affairs Representative from Pacific Gas and Electric, provided the Council with a history of deregulation in the industry and identified one of the major reasons for the electric and gas shortages and increased costs as supply and demand, noting that energy demands have grown faster than anticipated. She distributed and summarized a pamphlet entitled “An Important Energy-Saving Message from Pacific Gas and Electric Company” as well as an outline of her comments, as well as an outline of her comments, dated February 27, 2001, which were incorporated into the record.”

The Los Altos Town Crier newspaper reported that when Alvarado was a lobbyist for PG&E, PG&E had a program called “Riding out Summer 2001,” where she explained rate increases PG&E sought from the State of California.  At that time, the California Public Utilities Commission set new electric rates which increased small commercial users’ bills an average of 37 percent. Residential customers saw an average increase of 7 to 37 percent depending on usage.

“This is not a pleasant discussion,” said Teresa Alvarado, PG&E representative told the The Los Altos Town Crier in its May 23, 2001 edition. “We have a crisis this summer and you can make a difference by reducing 10 percent of your energy use.”

These days, Alvarado, a candidate for Santa Clara County Board of Supervisors District 2 in a run-off election with Cindy Chavez, to succeed disgraced former Santa Clara County District 2 Supervisor George Shirakawa Jr., is running to reform county government that she said allowed Shirakawa’s secretive ways to thrive, while Chavez is running on her accomplishments as a two-term San Jose City councilwoman.

One of Alvarado’s first direct mail pieces to voters in District 2 says one of her platforms to move half the Supervisor’s meetings from the daytime until after 6 p.m. “when community members can attend—not just paid lobbyists.”

Alvarado’s mailer positions her as “The Reformer We Need.”  Whether she is a reformer or a lobbyist cloaking herself in reformer’s clothing remains to be seen.

 

The Many Faces of Theresa Alvarado

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Pentagon Has No Idea What 108,000 Contractors Are Doing

The number of contractors working in Afghanistan now vastly outnumbers American troops stationed there, according to a Congressional Research Service report. CRS, along with the Government Accountability Office, also determined that the Pentagon is unable to properly document the work these contractors are doing. And the information DOD is receiving is often unreliable and inaccurate.

According to CRS, there are now 108,000 private workers in Afghanistan, a workforce that dwarfs the 65,700 American troops still stationed there. That means there are 1.6 contractors for every American soldier in Afghanistan. This is an increase from last month, when The Fiscal Timesreported that there were 1.4 contractors per American soldier.

Given the size of the private forces, it’s not surprising that CRS found that in recent years, the Defense Department spent more than any other agency to support contractor work.

“Over the last six fiscal years, DOD obligations for contracts performed in the Iraq and Afghanistan areas of operation were approximately $160 billion and exceeded total contract obligations of any other U.S. federal agency,” CRS found.

The CRS report comes in the wake of a recent GAO report that the United States spent $195 billion for contractor services in 2010, or twice what it spent on contractors in 2001, before the start of the war in Afghanistan.

The increase in the contractors to troop ration is yet another indication that although the vast majority of troops are leaving Afghanistan, a private army will remain in the country for years.

But the CRS and GAO reports did more than simply document how much was being spent on contractors. They also explored contractor oversight and DOD’s ability to track contractor work.

Taken together, they amount to yet another indictment of how the Pentagon deals with private workers. CRS found that the Pentagon lacked the ability to document the work each contractor is performing. It also found even when the government has information on contractors, it’s often inaccurate and doesn’t reflect the actual work being done. This leaves the Pentagon unable to determine if the hundreds of billions it’s spending are leading to effective results.

GAO found a number of faults with DOD’s contracting process, beginning with their inability to account for work being done in each branch. It attributes this problem to one that has hamstrung the Pentagon’s financial auditing process: Different branches of the military use different systems to track contractor work.

“DOD components used various methods and data sources, including their inventories of contracted services, to estimate contractor [full-time equivalents] for budget submissions, but GAO’s analysis found that the contractor [full-time equivalents] estimates have significant limitations and do not accurately reflect the number of contractors providing services to DOD.”

Each report found that the inability to track contractor work makes it nearly impossible for DOD to budget in an effective way. But they also made clear that failures to properly monitor contractors ultimately hurt readiness on the battlefield.

“Given current concerns over the reliability of contracting data, the information in the central database may not be sufficiently reliable for decision making at the strategic level. This lack of data makes it difficult to determine to what extent the billions of dollars spent … have contributed to achieving the mission,” CRS found.

DAVID FRANCIS, The Fiscal Times

 

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Strike by Concession Workers at AT&T Park Will Not Impact Fans, Centerplate Says of Unite Here Local 2 One Day Strike at San Francisco Giants Game

San Francisco—AT&T Park concessionaire Centerplate said a strike at today’s baseball game by Local 2 Unite Here will not interrupt service to fans at the ballpark.

“Centerplate is prepared with senior managers and additional staff to ensure fans enjoy today’s baseball game and can get hotdogs, garlic fries, beer, soft drinks and other foods as they normally would,” said Centerplate spokesman Sam Singer.

Centerplate believes “this labor action by Local 2 is unnecessary, unfortunate and illegal.  The timing of the strike, coming as it does on Memorial Day Weekend, continues a disturbing pattern of disrespect for the military, veterans and servicemen and servicewomen by the UNITE HERE leaders.  Remember this is the same union whose President previously made derogatory remarks against veterans and veteran’s organizations during negotiations,” Singer said.

“Centerplate values our employees. That is why they are already the highest paid staff in the concession business, earning between $15 and $20 an hour, receiving full healthcare and other benefits for their part time work,” he added.

Centerplate has bargained in good faith and offered union members:

  • A 4.5 percent ratification bonus for those who worked more than 40 games in 2012
  • A 1.7 percent annual wage increase on top of the best compensation package in the industry
  • Increased contribution of 9.2 percent to the Unite Here benefit plans
  • Employer paid health care for employees and their families

Centerplate this week filed a lawsuit against Local 2 Unite Here for attempting to illegally mandate the signing of a “successor addendum” that would bind any future concessionaire at AT&T Park to the same terms Local 2 negotiates with Centerplate. This action is illegal under the federal labor laws, Centerplate officials said.

The lawsuit says Local 2 President Michael Casey seeks to end Centerplate’s relationship with nonprofit organizations, forcing out such groups as St. Teresa Music and Arts, Leukemia Lymphoma Society, Athletes Committed to Academics, Berkeley Youth Alternatives, the United States Navy, and other nonprofits, from working at the stadium to raise money for their charitable works.

“Local 2’s President scoffed at the value of the (nonprofit) program, stating that the U.S. Navy did not need to work a stand at the ballpark to pay for prosthetic limbs for wounded Veterans,” the lawsuit states. “Casey also quipped about the Marines, “‘Why don’t you have them man a boat and they can sell hot dogs on the water,’” according the Centerplate lawsuit against Local 2.

The nonprofits make hundreds of thousands of dollars a year through partnering with Centerplate at baseball games by staffing concession stands and earning commissions based upon sales for their charitable work. Local 2 is now demanding Centerplate pay a penalty of $200 for each volunteer used for charitable work, which would eliminate Centerplate’s ability to partner with nonprofits.

“Local 2 has overstepped the bounds of the law and of humanity,” said spokesman Singer. This past week, Local 2 union leaders walked out on contract negotiations with Centerplate and a Federal Mediator, refusing to accept or to even make an economic counter proposal and thereby denying, for the time being, Centerplate’s employees at AT&T Park the economic benefits that would flow from a new contract.

Centerplate, which manages concessions at 300 ballparks and arenas, said its current contract as well as its new offer keeps AT&T Park employees the highest paid in the concession business.

Local 2 Unite Here publically acknowledged that Centerplate’s employees are already the highest paid workers in the concession industry. In a YouTube video posted on May 12, the union spokesperson is quoted saying, “so what if they’re (the employees) the best paid…that doesn’t mean anything.”

Centerplate said it wanted to make clear that this strike is a dispute between Local 2 Unite Here and Centerplate and not the San Francisco Giants.

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Local 2 UNITE HERE Union Leader Mike Casey Denigrates Navy, Marines, Disabled Veterans: Sued by Centerplate For Violation of Federal Labor Law, Attempt to Eliminate Nonprofits In San Francisco AT&T Park Labor Dispute

 Local 2 UNITE HERE President Mike Casey: No Need for Military Veterans to Have Prosthetic Limbs

San Francisco– Centerplate, the concessionaire at AT&T Park today filed a dynamic lawsuit against Local 2 Unite Here union for violations of national labor laws and for attempting to block charity groups and nonprofits from raising money at the ballpark.

Centerplate said Local 2 is attempting to illegally force the San Francisco Giants into signing a “successor addendum” that would bind the baseball team, and any future concessionaire at AT&T Park, to the same terms Local 2 negotiates with Centerplate. This action is illegal under the federal labor laws, Centerplate officials said.

Normally, the legal charges as Centerplate made today are filed with the National Labor Relations Board, but Centerplate said immediate action is necessary by the legal system to protect the Giants, Centerplate and nonprofits from Local 2’s illegal activities, which could harm all the parties. The lawsuit was filed in U.S. District Court in San Francisco and seeks damages and declaratory relief.

Furthermore, the lawsuit says Local 2 President Michael Casey seeks to end Centerplate’s relationship with nonprofit organizations, forcing out such groups as St. Teresa Music and Arts, Leukemia Lymphoma Society, Athletes Committed to Academics, Berkeley Youth Alternatives, the United States Navy, and others nonprofits, from working at the stadium to raise money for their charitable works.

“Local 2’s President scoffed at the value of the (nonprofit) program at one point stating that the U.S. Navy did not need to work a stand at the ballpark to pay for prosthetic limbs for wounded Veterans,” the lawsuit states. “Casey also quipped about the Marines, “Why don’t you have them man a boat and they can sell hot dogs on the water,” according the lawsuit against Local 2.

The nonprofits make hundreds of thousands of dollars a year through partnering with Centerplate at Giants games by staffing concession stands and earning commissions based upon sales for their charitable work. Local 2 is now demanding Centerplate pay a penalty of $200 for each volunteer used for charitable work, which would eliminate Centerplate’s ability to partner with nonprofits.

“Local 2 has overstepped the bounds of the law and of humanity,” said a spokesman for Centerplate.  “They are illegally attempting to force the Giants into a labor dispute between Centerplate and the union and wrongly trying to harm the many nonprofits that rely upon income from their charitable work at AT&T Park. We are going to fight to win this battle for Centerplate, our employees, our customers and the charitable causes which we support.”

This past week, Local 2 union leaders walked out on contract negotiations with Centerplate and a Federal Mediator, refusing to accept or to even make an economic counter proposal and thereby denying, for the time being, Centerplate’s employees at AT&T Park the economic benefits that would flow from a new contract.

Local 2 Unite Here publically acknowledged that Centerplate’s employees are already the highest paid workers in the concession industry. In a YouTube video posted on May 12, the union spokesperson is quoted saying “so what if they’re (the employees) the best paid…that doesn’t mean anything.”

As a seasonal, part-time labor force, Centerplate’s employees currently earn the highest wages in the nation, making an average of approximately $15 to $20 per hour. These part time employees also receive some of the best benefits, with fully paid healthcare individually and for their families. To ensure seamless exceptional service for fans, Centerplate has made an offer than includes:

  • A 4.5 percent ratification bonus for those who worked more than 40 games in 2012
  • A 1.7 percent annual wage increase on top of the best compensation package in the industry
  • Increased contribution of 9.2 percent to the Unite Here benefit plans
  • Employer paid health care for employees and their families

Since early this year, Centerplate has been in negotiations over a new contract. The previous one expired in 2010 but was continued from year to year when Unite Here failed to request new negotiations. Even after it sought to make changes to the existing agreement, Local 2 dragged its feet and delayed negotiations for months. Throughout this time, Centerplate has been encouraging Local 2 to move quickly to find a solution.

“Nothing is more important to Centerplate than our employee partners and the customer service experience we provide guests. Local 2’s threats are an attack against our guests and the community groups we partner with at AT&T Park. It is time for Local 2 to come back to the table and focus on a realistic agreement,” spokesman Sam Singer said.

Centerplate said in the unfortunate event of a strike by Local 2 that “protecting the guest experience at AT&T Park is paramount and it will not be disrupted as the company has contingency plans in place in the event of a labor action.”

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San Francisco Giants AT&T Ballpark Union Local 2 Refuses to Negotiate, Walks Out on Centerplate, Federal Mediator

Unite Here Local 2 union leaders have walked out on contract negotiations, refusing to accept or to even make an economic counter proposal and thereby denying, for the time being, Centerplate’s employees at AT&T Park the economic benefits that would flow from a new contract.

The union unilaterally left negotiations with Centerplate and a federal mediator last Thursday, refusing to make a counter offer to Centerplate’s economic package, which improves upon the industry leading compensation already received by Centerplate’s employees.

Local 2 Unite Here has acknowledged AT&T Park employees are already the highest paid workers in the concession industry. In a YouTube video posted on May 12, the union spokesperson is quoted saying “so what if they’re (the employees) the best paid…that doesn’t mean anything.”

For AT&T Park’s seasonal, part-time labor force, Centerplate’s employees currently earn the highest wages in the nation, making an average of approximately $15 to $20 per hour. These part time employees also receive some of the best benefits, with fully paid healthcare individually and for their families. To ensure seamless exceptional service for fans, Centerplate has made an offer than includes:

  • A 4.5 percent ratification bonus for those who worked more than 40 games in 2012
  • A 1.7 percent annual wage increase on top of the best compensation package in the industry
  • Increased contribution of 9.2 percent to the Unite Here benefit plans
  • Employer paid health care for employees and their families

Since early this year, Centerplate has been in negotiations over a new contract. The previous one expired in 2010 but was continued from year to year when Unite Here failed to request new negotiations. Even after it sought to make changes to the existing agreement, Local 2 dragged its feet and delayed negotiations for months. Throughout this time, Centerplate has been encouraging Local 2 to move quickly to find a solution.

“Nothing is more important to Centerplate than our employee partners and the customer service experience we provide guests. It is time for Local 2 to come back to the table and focus on a realistic agreement,” spokesman Sam Singer said.

Centerplate said in the unfortunate event of a strike by Local 2 that “protecting the guest experience at AT&T is paramount and it will not be disrupted as the company has contingency plans in place in the event of a labor action.”

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Patton Boggs Law Firm Sued by Chevron for Fraud and Deceit in Ecuador Lawsuit: Did Patton Boggs Know of ‘Ghostwriting’ of Fraudulent Ecuador Judgement?

Since late 2010, Washington, D.C. law firm Patton Boggs has been poking a sleeping tiger. It has filed three peculiar federal lawsuits — in its own name, not on behalf of any client — against Chevron, the third-largest corporation in the United States. These cases have fared poorly; two were quickly dismissed, and a federal magistrate judge recommended tossing the third in March.

 

On Friday, the tiger awoke. Chevron (CVX) sought a federal judge’s permission to bring counterclaims against the 455-lawyer firm for alleged fraud and deceit for its conduct in representing the Amazon Defense Front, which obtained a $19 billion environmental judgment against the oil giant in Lago Agrio, Ecuador, in February 2011. Chevron also seeks to charge the firm with “malicious prosecution” for having pursued its three lawsuits in bad faith. Chevron seeks to hold the law firm liable for any damages Chevron suffers from the Front’s allegedly fraud-infested litigation, plus punitive and treble damages.

 

In a statement, Patton Boggs wrote: “Chevron’s proposed complaint against Patton Boggs is perhaps the starkest example yet of how Chevron will use its limitless resources to intimidate and harass anyone that dares to help the Ecuadorian Plaintiffs in their 20-year battle for justice … Patton Boggs has acted conscientiously, ethically and in good faith at all times since becoming involved in this case in 2010, and will not be intimidated by Chevron’s scare tactics.” (See the full document here.)

 

Patton Boggs began representing the Front in February 2010. The firm is being paid on a partial contingency fee basis, under an agreement that gives it a 2.4% stake in the Ecuadorian judgment, according to earlier filings by Chevron. Thus, the law firm theoretically stands to make about $450 million if the Ecuadorian judgment can ever be collected. (Chevron has virtually no assets in Ecuador.)

 

Patton Boggs’s team working on the Lago Agrio case has been led by James Tyrrell, Jr., a regional managing partner of the firm’s New York and New Jersey offices and a member of its executive committee.

 

At the time Patton Boggs got involved in the matter, Chevron’s lawyers had just begun filing a series of U.S. court proceedings, known as Section 1782 actions, to attempt to expose fraud, fabrication of evidence, and other chicanery that Chevron claims the Front engaged in to obtain the Ecuadorian judgment. Patton Boggs’s task was, among other things, to assist the Front in resisting Chevron’s efforts to unearth such evidence.

 

Notwithstanding the Front’s and Patton Boggs’s efforts, Chevron eventually did obtain much of the evidence it sought, and in February 2011 it filed a civil Racketeer Influenced and Corrupt Organizations Act (RICO) case in Manhattan against the Front’s leaders, including its top U.S. lawyer and strategist, Steve Donziger. Last July, in a ruling on a partial summary judgment motion in that case, U.S. District Judge Lewis Kaplan found that the March 2011 Ecuadorian judgment was, in fact, “unquestionably … tainted” by fraud. More recently, in a discovery order in March 2013, he also found that there was “probable cause” to believe that Front representatives “bribed the Ecuadorian judge to obtain the result they wanted and, as part of the deal, wrote the judgment to which the judge put his name.”

 

(The Front has repeatedly and unsuccessfully sought to remove Judge Kaplan from the case, accusing him of bias in strident and borderline contemptuous terms.)

 

One of the reasons Judge Kaplan found it likely that the Ecuadorian judgment was ghostwritten by the Front’s lawyers is that it incorporates large passages that appear to have been lifted verbatim from internal Front legal memoranda that were never introduced into the Ecuadorian court record. In the proposed complaint, Chevron alleges that at least one of the lifted passages incorporates Patton Boggs’s own work product.

 

Thus, it alleges, “Patton Boggs either knew in advance of the ghostwriting of the judgment against Chevron or must have become quickly aware of it once Chevron began to make the evidence known, and yet Patton Boggs continued to further the fraudulent scheme … Despite the uncontradicted evidence to the contrary, Patton Boggs has falsely asserted in the U.S. that this judgment is legitimate and not the product of a corrupt process in which Patton Boggs and/or its co-counsel colluded with the Ecuadorian court or court experts.”

 

Another focus of Chevron’s proposed complaint is Patton Boggs’s alleged role in “direct[ing] the creation of a declaration” signed by Front lawyer Pablo Fajardo that was filed in a Section 1782 action in Denver federal court in May 2010.

 

In his March 2013 ruling, Judge Kaplan called the Fajardo declaration “a seriously misleading account of what had happened” and, again, found “probable cause” to believe that “at least some” of the Front’s representatives “had committed mail and/or wire fraud and obstructed justice … by formulating and filing” it. The Front later filed the Fajardo declaration in at least eight other U.S. courts around the nation, including Kaplan’s.

 

Also in dispute is a strategy Patton Boggs allegedly “orchestrated” of hastily seeking testimony from seven newly hired experts — known internally at Patton Boggs as the “cleansing” experts — and introducing their written testimony into the Ecuadorian court record in late 2010 in an effort to give the Ecuadorian court something to base its opinion upon other than a court-appointed expert’s report that Chevron alleges (and appears to have proven) was secretly ghostwritten by the plaintiffs lawyers.

 

Chevron alleges that the cleansing experts in fact simply relied on the fraud-tainted report and that Patton Boggs’s lawyers tried to conceal that fact.

 

Chevron also takes issue with Patton Boggs’s continuing attempts to enforce the Ecuadorian judgment in foreign courts, including, so far, those of Canada, Argentina, and Brazil, “despite overwhelming and un-rebutted evidence that the Ecuadorian judgment itself, and the [court-appointed expert's report] upon which it is based, were fraudulently ghostwritten by the LAPs’ own team.”

 

Finally, Chevron faults Patton Boggs for having helped the Front secure funding for its allegedly fraud-tainted litigation by allegedly misleading the investment fund Burford Capital, which specializes in litigation finance. Burford has since renounced its interest in the case and has accused both the Front’s leaders and Patton Boggs’s Tyrrell of having made false representations to lure it into the case. (Patton Boggs has responded in the past that it is “fully confident that it has acted appropriately and ethically.”)

 

Chevron’s proposed complaint is based on documents already in its possession that relate to Patton Boggs’s role in the case, but it is already in the process of trying to obtain many more documents from the firm. In March Judge Kaplan ordered Patton Boggs to begin turning over millions of pages of files in the case, finding that any attorney-client privilege was pierced by the so-called crime-fraud exception. He wrote: “PB participated heavily in certain critical activities that make it likely that it is an important and, in many respects, unique source of evidence of the alleged fraud that is available nowhere else and that at least some of the materials in its possession or control were in furtherance of crimes or frauds regardless of whether PB was aware of them.”

 

Chevron’s new proposed claims against Patton Boggs are not being leveled in the RICO case itself, which is scheduled to go to trial in October, but rather as a counterclaim in a case Patton Boggs itself brought against Chevron in Newark last year, which was transferred to Manhattan earlier this year.

 

That case is the third of Patton Boggs’s suits against Chevron, which are the subject of Chevron’s “malicious prosecution” allegation against the firm. The string of Patton Boggs suits began in November 2010, when it sued Chevron seeking a preemptive declaration that Patton Boggs had no conflict of interest in representing the Front — though Chevron had not moved to disqualify it. (The potential conflict related to Patton Boggs’s July 2010 acquisition of the Breaux Lott Leadership Group, a lobbying firm that Chevron says was representing it with respect to its Ecuador litigation between 2008 and 2010.)

 

Patton Boggs later added Chevron’s main outside counsel, Gibson Dunn & Crutcher, as a defendant, and also accused Chevron of “tortious interference with contract” for having allegedly interfered with the Front’s ability to find financing with which to pay Patton Boggs. U.S. District Judge Henry Kennedy, Jr., dismissed this and a second, nearly identical Patton Boggs suit against Chevron in April, July, and August of 2011, and an appeals court unanimously affirmed both dismissals in June 2012.

 

By then, Patton Boggs had filed the third suit against Chevron in Newark. This one had to do with a $21.8 million appeal bond that Judge Kaplan had required Chevron to post when, in March 2011, he granted a preliminary injunction barring the Front from trying to enforce the Ecuadorian judgment outside Ecuador. After the injunction was vacated by an appeals court in January 2012, Chevron asked Judge Kaplan to release the bond — i.e., give Chevron back the money it had posted.

 

Patton Boggs opposed Chevron’s motion, but instead of simply doing so in a motion before Judge Kaplan on the Front’s behalf, it filed an entirely new lawsuit in Newark on Patton Boggs’s own behalf. Later Patton Boggs added a “malicious prosecution” claim against Chevron for its having identified Patton Boggs as a “co-conspirator” (though not a defendant) in its RICO suit. In December 2012, Newark federal judge Esther Salas transferred the case to Judge Kaplan in Manhattan, criticizing Patton Boggs’s “jurisdictional maneuvering.” (Judge Kaplan released the bond in April 2012, and Patton Boggs has appealed that order.)

 

In March 2013, Magistrate Judge James C. Francis IV in Manhattan recommended dismissal of Patton Boggs’s third suit, and Patton Boggs has appealed to Judge Kaplan. Chevron’s new claims against Patton Boggs for fraud and deceit, filed today, come as counterclaims in that case.

 

It seems likely that Patton Boggs was already losing money from its representation of the Front — that was an underlying premise for all three of its lawsuits against Chevron — and the counterclaim against it by Chevron cannot help its situation. Patton Boggs did not respond to a request for comment on whether the Front was in arrears on payments owed to it.

 

Last week another of the Front’s U.S. law firms, Houston’s, Smyser Veselka & Kaplan, asked to withdraw from the RICO case, saying it was owed almost $1.8 million in fees. At the same time, Donziger’s law firm in that case, Keker & Van Nest — which the Front had also been paying, under the terms of its retainer agreement with Donziger — also asked to withdraw, saying it was owed more than $1.4 million in fees.

 

According to the Wall Street Journal, Patton Boggs laid off 65 lawyers and staff in late February, after a decline in profits. Its annual revenues were down 6.5% in 2012, the article said, while its profits fell 14%.

 

By Roger Parloff-Fortune, May 13, 2013

 

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CPUC President Michael Peevey Caught in The Act: He Ducks California Senate Hearing for Napa Valley Drinks with PG&E Executives

The embattled president of the California Public Utilities Commission recently ignored the call to answer tough questions by state senators in Sacramento and instead decided to attend a conference at an exclusive Napa resort and a reception at an upscale winery in St. Helena, both of which were captured on hidden camera by the NBC Bay Area Investigative Unit, headed by reporter Tony Kovaleski. See the shocking story that most likely will cost Peevey his job as head of the CPUC after Governor Jerry Brown sees this news video: http://www.nbcbayarea.com/investigations/LEGALPeeveys-Priority–205838301.html

Michael Peevey was asked to appear before the Senate Budget and Fiscal Review subcommittee on April 25 to justify keeping the job he has held for the past decade. The senate hearing was in response to growing conflict over a confidential report, uncovered by the Investigative Unit, which raises questions about the CPUC’s commitment to safety and its relationship with utility companies the agency regulates.

“The governor needs to replace the president of the Public Utilities Commission,” Sen. Jerry Hill said in an interview with NBC Bay Area last month. “The current president has been there for many years and he has had a very cozy relationship with the utilities, which this report indicates.”

Hill’s call for change at the CPUC was recently echoed by two lawmakers.

“I think the question is, who should be leading this organization so the people of California are safe,” San Jose assemblywoman Nora Campos said at a recent legislative hearing.

At that same hearing Los Altos assemblyman Richard Gordon added, “I have come to the point where we need serious change in the leadership of the PUC to bring change.”

After calling for his job two weeks ago, Hill wrote Peevey a letter formally requesting his presence at the subcommittee hearing. The letter states, “For all the shortcomings under your leadership at the CPUC over the last ten years as documented by independent reports… it’s critical that you testify…to justify your continued appointment as the president of the California Public Utilities Commission.”

Instead of addressing the conflict, Peevey kept a prior engagement at the Silverado Resort and Spa in the heart of Napa. According to the agenda, the conference was about clean energy, and Peevey was scheduled to give a short five to seven minute presentation for the non-profit organization, California Foundation for the Environment and the Economy (CFEE).

Before the conference started, at around 11 a.m.—the same time he was expected in Sacramento—NBC Bay Area’s hidden cameras spotted Peevey mingling with guests in the resort conference center.  The day officially started at noon, with a catered lunch after invited guests such as a representative from Pacific Gas & Electric and, somewhat ironically, more than two dozen Sacramento lawmakers, checked in at the event. Peevey gave his presentation at 1:30 p.m.—two and a half hours after he was scheduled to speak in Sacramento.

After four hours of conference sessions Peevey boarded a luxury bus and drove through the Napa Valley to the next event on the agenda—a reception and dinner at St. Helena’s exclusive Merryvalewinery. For more than three hours, Peevey ended his day inside the facility along with more than 100 guests.

Following the reception, NBC Bay Area’s Chief Investigative Reporter Tony Kovaleski met Peevey outside the winery to ask questions about his priorities, and the confidential report. Below is a transcript of a part of the conversation:

Tony Kovaleski: You were asked to speak to senators today about the safety of your PUC. Instead you spent your day here in Napa.

Michael Peevey: No, that’s not true.

Kovaleski: What is the message you sent by coming here to Napa instead of going to speak to the senate?

Peevey: You are very antagonistic you know. You are reading a script.

Kovaleski: Sir, I am not reading a script. I want to give you an opportunity to respond.

Peevey: But your questions are the wrong questions.

Kovaleski: You spent time here with the utilities you are paid to regulate.

Peevey: There’s no utilities here that I know of.

Kovaleski: PG&E was here. We saw them on the list.

Peevey: Oh, there may have been one person, I don’t know.

Kovaleski: That report said your agency is too cozy with utilities. Is that true?

Peevey: No. Stop. That’s one person who said that. That’s not what the report said. There was no conclusion in the report. It was an interview with various individual employees of the Public Utilities Commission.

Kovaleski: Sir, you have been asked by lawmakers to step down. Lawmakers have said you should be fired. Should you be fired, sir?

Man with Peevey: No, he shouldn’t be fired. They don’t have the authority.

(Peevey starts to walk away).

Peevey: You poor son of a b****. You have a job to do. It’s pathetic what you are doing. It’s pathetic.

(Peevey gets into a car).

Kovaleski: Sir, should you answer to lawmakers when they ask to speak with you? What’s the message you sent tonight by coming here?

(Car drives away).

NBC Bay Area asked to speak with Peevey about the confidential report prior to the conference in Napa, but did not receive a response to that request from the CPUC. The CPUC did provide a written statement about the report:

The CPUC has made safety an underlying principle in all its actions. As we work to instill a corporate culture in our regulated utilities that embraces safety as a tool and an enhancement to their mission, we must ensure we do the same at the CPUC. We have hired consultants to help us in our process of culture change across all the industries we regulate. As part of these efforts, our consultants conducted an informal survey of internal employees to see what they think safety means, how they see their role in safety, and how they think we can do better as an agency. The report is the result of the informal survey; it is not an analysis of our safety culture or conclusions by our consultants, but a reporting-back of what some employees said in informal focus groups. As the report says, “This report is not an evaluation of the objective truth of those views and perceptions.”  We will use the results of the report to help us define what we need to change, develop strategies and actions to implement the changes, and ensure accountability as the process continues.

This is not the first time Peevey has snubbed lawmakers for an all-expense paid event. He was asked to speak at an assembly committee meeting in 2011, but reports indicate he accepted a free trip to Sweden that was funded by the Swedish government and the California nonprofit, The Energy Coalition.

When asked by reporters in April about his confidence in the leadership of the CPUC, Gov. Jerry Brown said Peevey is “well-experienced.”

“He’s flawed like everyone else in this building,” Brown said, “but he has a lot of knowledge and he has great commitment.”

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Executive Recruiter David Nosal of Nosal Partners Convicted of All Charges in FBI Investigation and Federal Grand Jury Trial

SAN FRANCISCO—David Nosal, an executive recruiter based in San Francisco, was convicted of all charges in a six-count indictment by a federal jury today, United States Attorney Melinda Haag announced. Nosal is founder and president of Nosal Partners, a member of NGS Global.

The jury found that Nosal had conspired to gain unauthorized access to the computer system of his former employer, the executive search firm Korn/Ferry International, and to illegally obtain trade secrets belonging to Korn/Ferry. The jury also found Nosal guilty of three substantive computer intrusions in April and July 2005 and two substantives trade secret offenses that occurred in April 2005. The guilty verdict followed a two-week jury trial before U.S. District Court Judge Edward M. Chen.

Evidence at trial showed that Nosal, 55, of Danville, entered into an agreement with other Korn/Ferry employees in 2004 to take confidential and proprietary materials from Korn/Ferry’s computer system to be used in a new business that Nosal intended to establish with those individuals after he left Korn/Ferry’s employment in late 2004. The evidence showed that two of those employees downloaded large numbers of “source lists” (essentially, targeted lists of candidates developed by Korn/Ferry for the purpose of filling particular positions at particular client-companies) prior to their own departures from Korn/Ferry. Thereafter, those two employees used the Korn/Ferry login credentials of another conspirator who was still employed at Korn/Ferry to download additional source lists and other information from Korn/Ferry’s computer system in April and July 2005 for use in Nosal’s new business.

The trial in this case occurred after remand from the Ninth Circuit Court of Appeals, which had affirmed then-District Court Judge Marilyn H. Patel’s pre-trial dismissal of several computer intrusion counts.

Nosal was initially indicted by a federal grand jury on April 10, 2008. The government obtained superseding indictments on June 26, 2008 and February 28, 2013. In the most recent superseding indictment, Nosal was charged with one count of conspiracy, three counts of unauthorized access to a computer used in interstate or foreign commerce or communication, one count of unauthorized downloading and copying of trade secrets, and one count of unauthorized receipt and possession of stolen trade secrets. Nosal was found guilty on all six counts of this indictment.

The sentencing of Nosal is scheduled for September 4, 2013, before Judge Edward M. Chen in San Francisco. The maximum statutory penalty for the conspiracy charge in violation of Title 18, United States Code, Section 371 and the unauthorized access charges in violation of Title 18, United States Code, Section 1030(a)(4), is five years’ imprisonment and a fine of $250,000, plus restitution if appropriate. The maximum statutory penalty for the trade secret charges is 10 years’ imprisonment and a fine of $250,000, plus restitution if appropriate. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.

Assistant United States Attorneys Kyle F. Waldinger and Matthew A. Parrella and U.S. Department of Justice Trial Attorney Jenny C. Ellickson are the attorneys who are prosecuting the case with the assistance of Rayneisha Booth, Elise Etter, Beth Margen, and Hui Chen. The prosecution is the result of an investigation by the Federal Bureau of Investigation.

 

David Nosal of Nosal Partners

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California Public Utilities Commission President and Commissioner Must Recuse Themselves, City of San Bruno Says in Legal Filing Over CPUC Ex-Parte Discussions with PG&E

CPUC President Peevey Must Recuse Himself

San Francisco—The City of San Bruno today filed a legal motion demanding CPUC President Michael Peevey and Commissioner Michel Florio recuse themselves from an upcoming “safety” event featuring PG&E executives, noting it is illegal and unethical for the regulatory agency to participate when it will stand in judgment of the utility and fine it for the Sept. 9, 2010 explosion and fire in San Bruno that killed eight, injured 60, destroyed 38 homes and damaged scores more. The safety symposium will focus on the same subject matter that is at issue in the CPUC investigations: natural gas safety and emergency response.

 

The California Public Utilities Commission Safety Symposium featuring PG&E is scheduled for May 7-8 in San Francisco to “explore solutions to safety within California’s utility services and infrastructure sectors” and “will focus on natural gas safety issues,” according to the invitation.

 

Among the scheduled speakers and panelists are PG&E President Chris Johns, PG&E SVP of Gas Operations Nick Stavropoulos, CPUC President Michael Peevey, CPUC Commissioner Michel Florio, CPUC Executive Director Paul Clanon, and CPUC Safety Director Jack Hagan.

 

“This is like the defendant in a criminal case taking the judge to play golf together before the judge rules on his case and his penalty,” said attorney Steven Meyers of the Meyers Nave law firm, representing the City of San Bruno.

 

The legal filing cites the symposium for being an illegal ‘ex-parte’ contact between the regulator (CPUC) and defendant (PG&E) at a critical time in the CPUC hearing process in the San Bruno explosion and fire case. The filing says “the participation of the defendant and the judges… (is) a violation of the law” and calls it “unethical and inappropriate.”

 

“On its face, the PG&E-CPUC Safety Symposium appears to be a step forward in promoting natural gas safety,” San Bruno’s filing says.

 

“However, upon further scrutiny, this Safety Symposium is nothing but a forum for PG&E to put on a dog and pony show in front of two out of the five Commission decision-makers charged with determining the fines and penalties warranted by PG&E’s past misconduct, right in the middle of unprecedented and high-profile CPUC investigations into PG&E’s deficient management and operation of its natural gas system.”

 

In conclusion, the filing says “San Bruno urges the CPUC to demonstrate to the intervenors in these proceedings, the residents of San Bruno, and to the public at large that its commitment to accountability is more than mere posturing, and to do so in these cases that are gravely important to the residents of San Bruno and the ratepayers of the State of California.  San Bruno has a strong and vested interest in a CPUC process that follows the rules.   San Bruno has participated in these proceedings in good faith for over two years in reliance on the belief that a just, transparent, reasonable outcome which is in the public interest can be achieved.  San Bruno cannot achieve this outcome when the very decision-makers that are determining PG&E’s fate will be in the same room with PG&E discussing natural gas safety in a forum other than the courtroom.”

 

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Chevron Ecuador: Ecuador Environmental Plaintiffs In Trouble as Environmental Consulting Firms Disavows Work for Steven Donziger, Luis Yanza, Pablo Fajardo


Steven Donziger, once the toast of the environmental plaintiffs’ bar, is in deep trouble.

The New York lawyer made history in February 2011 when he engineered what’s grown into a $19 billion verdict against Chevron (CVX) related to oil pollution in the rainforest of eastern Ecuador.

Chevron, which has no assets to speak of in Ecuador, vowed it would never pay a dime. The oil company has claimed that Donziger 
masterminded
 a vast fraud with the assistance of lawyers and judges in Ecuador. Chevron filed a countersuit against Donziger in federal court in New York, alleging he had fabricated evidence, threatened an Ecuadorian judge, and arranged for the ghostwriting of a supposedly independent scientific report, as well as the ultimate judgment.

Donziger, who said he represented some 30,000 indigenous rainforest villagers and farmers, has denied all of the allegations, saying that Chevron simply wanted to deflect attention from its enormous liability.

Now the San Ramon-based company has reached an important settlement with the environmental consulting firm that served as Donziger’s main source of data and analysis in the long-running Ecuador case. Stratus Consulting, based in Boulder, Colo., said in a press release today that it “was misled” by Donziger. Stratus went on to say that the plaintiffs’ legal team used its extensive research as the basis of a 4,000-page report filed with the court in Lago Agrio, Ecuador. The report was supposed to be neutral and independent, but it was not, Stratus said. The consulting firm described a court process in Ecuador that “was tainted by Donziger and the Lago Agrio plaintiffs representatives’ behind-the-scenes activities.”

Chevron had named Stratus as a co-defendant with Donziger in the New York lawsuit. In its press release, Stratus said the damages assessment to which it contributed, as well as other evidence filed in court in Ecuador by the plaintiffs, “were fatally tainted and are not reliable.” The consulting firm disavowed its work and said it would “cooperate fully” with Chevron and “provide testimony about the Ecuador litigation.” Stratus added that it “deeply regrets its involvement in the Ecuador litigation.” Separate court filings indicate that Stratus has not agreed to pay any money to settle Chevron’s claims against it.

Donziger did not immediately respond to an e-mail seeking comment.

Chevron is expected to file more specific declarations from Stratus principals in federal court in New York in coming days. Judge Lewis Kaplan, who’s presiding over Chevron’s civil racketeering suit against Donziger, has scheduled a hearing for April 16.

Donziger’s reversal of fortune over the past two years has been nothing short of breathtaking. Heralded by Amazon Watch and other environmentalists, praised in a highly regarded 2009 documentary film, and heroized by CBS’s (CBS60 Minutes, Donziger now faces the second-largest oil company in the U.S. without the scientists who once backed his pioneering case. His financing has dried up, his public-relations consultant recently left the case, and his room to maneuver appears to be diminishing quickly.

 

From Business Week. Author Paul Barrett, an assistant managing editor and senior writer at Bloomberg Businessweek, is author, most recently, of 
GLOCK: The Rise of America’s Gun
.

 

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America’s Cup Refuses to Pay Workers: Will This Impact Upcoming America’s Cup Finals in San Francisco This Year?

by Zennie Abraham

America’s Cup stiffs San Francisco Workers? Read on…

America’s Cup, SF. If you’re as excited about the event being here in San Francisco and the SF Bay Area as I am, then you expect the organization to get everything right, and maintain good relationships with everyone.

And if you’re as excited about the America’s Cup as I am, then you’re going to be as disappointed in America’s CUP CEO Stephen Barclay as I am after you read my blog post.

According to numerous reports and SF City Hall sources, America’s Cup CEO Stephen Barclay has not authorized the San Francisco America’s Cup organization to pay full contracted union wages to San Francisco-based businesses – in particular, Hartmann Studios.

Hartmann Studios is under contract with America’s Cup Event Authority to set up events related to and help stage the races at the center of what’s called “America’s Cup.” San Francisco ChronicleColumnists Matier and Ross reported today that the America’s Cup Event Authority owes Hartmann Studios almost half-a-million, or $400,000 in unpaid not including the $56,000 in administrative costs the City and County of San Francisco has incurred to date. That’s a total of $456,000.

Matier and Ross quote America’s CUP CEO Stephen Barclay as saying “I’m absolutely unaware of this. I’m staggered.”

Really?

Not according to an extensive email letter dated Sep 25, 2012, and titled “Budget Discussion.” The email specifically mentioned the contracted union wages, or “prevailing wages” that the America’s Cup Event Authority has to pay San Francisco organizations like Hartmann Studios.

The email was from Hartmann Studios President Mark Guelfi, and to Mirko Groeschner, the person’s who’s name is on a number of America’s Cup communications and is Marketing Director of BMW ORACLE Racing, and it was copied for Rosie Spaulding, who manages events for America’s Cup, and for Sam Hollis, America’s Cup Event Authority General Counsel (he’s their lawyer who previously worked on London’s 2012 Olympics Bid before then working for the America’s Cup).

Given that the “Budget Discussion” was with three top America’s Cup executives, and that they all report to and work with America’s CUP CEO Stephen Barclay, for Mr. Barclay to tell Matier and Ross that he’s “absolutely unaware of this” and that he’s “staggered” stretches the imagination.

Indeed, read on and you’ll see the smoking gun that points to this blogger’s assertion that Barclay did know about the prevailing wage costs and the monies owed both Hartmann Studios and The City and County of San Francisco.

Here’s the email, with the email addresses removed:

From: Mark Guelfi 
Date: Tue, Sep 25, 2012 at 6:37 AM
Subject: Re: Budget discussion
To: Mirko Groeschner
Cc: Keith Lovitt, Rosie Spaulding , Sam Hollis , *Matt Guelfi Guelfi , *Mike Guelfi Guelfi

Mirko -

Thanks for sending. I am always happy to discuss budgets and hope I was able to clear up some of your questions on our call Sunday morning. I circled back with Keith yesterday and reviewed the budget. Please see below for responses to your questions.

Shipping – These numbers come directly from our vendors to transport product to and from the venue. There is a significant amount of product ordered, which requires tractor trailer transporting. With fuel prices increasing these numbers are becoming significant costs to all of our budgets. We ask our vendors to break out their proposals by equipment, staff, labor and trucking/shipping so we can see and better analyze the detail.

Hartmann Production Staff – With regards to your call-out of Ian’s days onsite, I had the same question. Keith explained that Ian will be managing the load-out of the Yacht Club Peninsula Hospitality, which is planned to extend to October 15th. All of our pre-production time are estimates based on the scope of the project and will be billed as actuals once the project is complete although I don’t expect any surprises.

Hotel Nights/Per Diem/Travel – We normally use 100 percent local staff — both full time and those on our extended project team — however, there is nobody “left standing” in the Bay Area that is available. The city is extremely busy during the next ACWS race with Fleet Week, Blue Grass Festival, the 49ers Game, Giants Playoff Game, North Beach Festival not to mention Oracle OpenWorld. We would have had to book production staff 6 to 8 months ago in order to hire locally. Hotel costs are also significantly higher due to demand during this time period. Oracle OpenWorld alone sells out the entire city and much of the Bay Area. August costs in comparison were about half of what we are paying in October.

Parking Attendants – This was a request from Rosie via the city back in August, encouraging a “friendly face” assisting your security team in directing traffic. The request was made again for the October event.

Daily Maintenance – This was a carry over from August for litter pick-up/general cleaning for all tents on a daily basis. Rosie has since requested that this role is folded under the “greeners” that ACEA is hiring and will be removed on the budget revision.

Audio Labor – This is for the peninsula audio system, which runs the entire length of the peninsula…Nearly a mile, which requires running cable that distance. The 20k number is actually for the install, onsite crew to run the system for the entire week, and to strike the equipment post event. Labor is billed on per day basis, which is why you see a qty of 9…(1 day install, 7 day show (includes rehearsal day), 1 day strike. With the technical aspects of the requests, you have to have crew onsite managing the equipment/show.

Power – The significant portion of this cost, is again labor. Running cable, installing, onsite techs adds up quickly. Fuel is also factored in and with the economic climate this has a significant impact on costs. John Briggs with Race Management has worked directly with our technical director to ensure we are as efficient as possible when spec’ing this equipment.

As I mentioned, labor is a significant part of all event budgets, especially when there are Union Requirements and Prevailing Wage implications. Hartmann’s model is to pass along our costs directly to our clients, plus our management fee (at Oracle discount rate) and we work hard to create relationships with vendors to reduce these costs as much as possible for our clients. I agree with you. We do need to find a way to come up with a plan much further in advance so that we can minimize these costs for future events.

I will follow up, as promised, and send a separate note to you, Sam, Rosie, Keith and I will probably copy Stephen in regards to my concerns about the prevailing wage language in your contract with the City of San Francisco and the Port. The cost of labor is going to skyrocket. A laborer that we are currently paying $12 to $15 to $18 per hour is going to get paid somewhere between $50 and $85 per hour.

As you know, we are responding to the City’s Labor Standards Department’s investigation of labor rates that were paid by my company and by our subcontractors at the August race. We sent a very large stack of payroll records and copies of cancelled payroll checks to the department last week. We have since confirmed that they have received. This department has also been in touch directly with our subcontractors and they have all agreed to supply the same information. We expect the Labor Standards Department to come back to us and identify what the prevailing rate are for each discipline i.e. tenting, staging, janitorial, etc.

We will certainly have a significant amount of of back pay that we will need to send to most of the people that worked on the August project and on the upcoming October project. We are not able to pay prevailing wage at the next race since the Labor Standards Department has not yet given us the prevailing wage rates. We will provide them with our records after the race and wait for them to come back to us. This is a very time consuming process to say the least.

We will not have liability in regards to any theatrical/stagehand work since we gave all of this work to the local stagehand union, IATSE Local 16. Additionally, Hartmann Staff and any vendor staff that performed theatrical work and was not a member of the local, was paid at prevailing rates so we are covered on this front. No back pay will be required.

Please know that the final budgets that we submitted for the August events and the proposed budgets that we have prepared for the October events do not completely reflect prevailing wage. We will submit a invoice in October or November for the balance due based on the direction that we get from the City.

I hope this helps. I am available to discuss today if you have some time to discuss. I can be reached on cell.

Best Regards,
Mark Guelfi

In his response to Mark Guelfi’s email two things become obvious: first, that it becomes clear that Mirko Groeschner has issues with the union wages, and was already seeking a way to lower costs for the America’s Cup event, and second, that he was going to tell Mr. Barclay about it – he refers to him as “Stephen” – as well as Mr. Hollis, or “Sam,” the general counsel. Here’s Mirko Groeschner’s response email:

Hi Mark,

thanks for being available this morning to talk.

Looked more intensively at the budget again. Below are a few points where I would question some of the items or at least – I am not sure I understand fully the reasoning.

Perhaps we have a chance to talk towards the beginning of the week again.

Shipping: 21.400 USD. Do we need that much?
Hartmann Production Staff: as we discussed, pls have a look at the quantities again
Hotel nights, per diem and travel for crew: this is 44.000 USD, can we not have local crew that goes home each day?
Parking Attendant: Do we need that? Almost 6.500 USD
Daily Maintenance: 22.000 USD (what are these guys doing?)
Audio Labor: it says 1 day installation but still there are 20.000 USD – is that ok?
Power: when I add all costs for Labour, generators, shipping, electrician etc. I arrive at an amount of almost 100k USD….

Secondly, I will send to Stephen and Sam a note considering labour costs.

For labour in some areas it looks that we pay about 180.000 EUR. In more detail there is:

Stage Labour: 83.000 USD
Power distribution Labour: 55.100 USD
Audio Labour: 20.000 USD
Daily Maintenance: 22.000 USD

We need to find a way to plan all that a little more in advance and reduce some of these costs to make our events affordable.

Best, Mirko

So from this, it’s clear that America’s CUP CEO Stephen Barclay either wasn’t forthcoming with Matier and Ross or his deputy Mirko Groeschner withheld the information from him – neither direction is a good one, but I’m not believing that Mirko failed to tell Stephen about this issue . Again, the email exchange happened seven months ago – that’s ample time for Mr. Barclay to have known about the wage cost issue, and have done something about it.

As of this writing, it appears the something was to pay nothing to either Hartmann Productions or the City and County of San Francisco.

Stay tuned.

Originally published at: http://www.zennie62blog.com/

 

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