$32K Fine for Ex-Utilities Commissioner Lobbying Colleagues

SACRAMENTO, Calif. (AP) — California’s campaign watchdog announced Monday that it is fining a former public utilities commissioner $32,500 for failing to disclose that she was lobbying her former colleagues on behalf of ride-hailing and water companies.

The Fair Political Practices Commission announced the settlement with Susan Kennedy, who previously held top jobs with both Democratic governor Gray Davis and Republican governor Arnold Schwarzenegger.

Kennedy now agrees that she qualified as a lobbyist for Lyft Inc. and San Gabriel Valley Water Company, according to the settlement.

They paid her $201,500 as she attempted to influence commissioners and employees of the troubled California Public Utilities Commission, but she failed to register as a lobbyist or file lobbying reports from 2012 through 2014.

Kennedy was Davis’ deputy chief of staff and cabinet secretary before serving on the Public Utilities Commission from 2003 to 2006. She was Schwarzenegger’s chief of staff from 2007 to 2011 before becoming a consultant for clients with business before the commission as well as other state and federal agencies.

Her attorney and spokesman, James Harrison, said in a statement that Kennedy acted immediately to correct the problem once it was identified because “integrity and character are hallmark principles in how Ms. Kennedy conducts herself in business.”

Lyft paid her $15,000 a month starting in November 2012 while Lyft and similar ride-hailing companies were sparring with the commission. The commission in August 2012 ordered Lyft to stop operating because it lacked the commission’s approval, and the company paid a $20,000 fine.

But Kennedy contacted then-commission president Michael Peevey, the commission’s executive director and other employees, arguing that the commission should work with the ride-hailing companies instead of shutting them down.

The commission in December 2012 starting drafting regulations including requiring the use of licensed drivers, liability insurance, driver background checks, driver training programs and vehicle inspections. Kennedy contacted commission employees during the nine months the rules were being crafted and persuaded the commission to adopt many of Lyft’s suggestions, according to the FPPC complaint.

Her contract described her as a consultant, not a lobbyist, and neither she nor Lyft filed lobbying reports. But the complaint said her contacts with the FPPC qualified her as a lobbyist who should have registered.

Similarly, the water company began paying Kennedy $25,000 a month in December 2013 while it sought higher water rates over the objections of the city of Fontana and the Fontana School District.

Kennedy met with Peevey, commissioner Michael Picker and commission employees, but in May the commission sided with Fontana and the school district. In November, commissioners approved a settlement with a modified rate increase agreed to by all the parties.

Picker is now president of the utilities commission after Peevey stepped down in 2014 amid accusations of back-channel dealings with utilities. Gov. Jerry Brown named Picker, his former adviser on renewable energy and a former utility board member.

The settlement with Kennedy will be considered by the FPPC at its Feb. 15 meeting. Her two former clients did not immediately respond to email and phone messages from The Associated Press seeking comment.

Kennedy said she has been working fulltime since 2014 on developing an energy storage business, Advanced Microgrid Solutions, and no longer is a paid consultant.

Schwarzenegger also appointed Kennedy to the five-member Health Benefits Exchange, the Covered California board that designed the state’s health insurance market as part of national health reform. She remains on that unpaid board.

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