Subject: Fw: Calif Power Consultant Failed To Reveal Energy Co. Stake
From: [email-masked]
To: [email-masked]
Date: Fri, 24 Aug 2001 09:37:08 -0700 (PDT)

----- Original Message ----- 
From: Bill Marcus <mailto:[email-masked]> 
To: 'V. John White' <mailto:[email-masked]> ; 'Don Fields' <mailto:[email-masked]> 
Cc: [email-masked] <mailto:[email-masked]> 
Sent: Friday, August 24, 2001 8:59 AM
Subject: RE: Calif Power Consultant Failed To Reveal Energy Co. Stake

This Klamath Falls Contract wasn't going to make my list, but it's time to gun for it!

-----Original Message-----
From: V. John White [<mailto:[email-masked]>]
Sent: Thursday, August 23, 2001 10:24 PM
To: Don Fields
Cc: [email-masked] <mailto:[email-masked]>
Subject: Fw: Calif Power Consultant Failed To Reveal Energy Co. Stake

 
----- Original Message ----- 
From: John Shahabian <mailto:[email-masked]> 
To: V John White (E-mail) <mailto:[email-masked]> 
Sent: Thursday, August 23, 2001 10:04 PM
Subject: Calif Power Consultant Failed To Reveal Energy Co. Stake

August 23, 2001 

Dow Jones Newswires

Calif Power Consultant Failed To Reveal Energy Co. Stake

By JASON LEOPOLD

   Of DOW JONES NEWSWIRES

LOS ANGELES -- A top energy consultant hired by to negotiate long-term power contracts for the state of California failed to disclose that he held stock in a company with which the state signed a $1 billion power supply pact last month, according to documents obtained Thursday by Dow Jones Newswires.

Vikram Budraja filed an amended financial disclosure form Aug. 13 listing holdings of between $2,000 and $10,000 in stock in ScottishPower (SPI), whose subsidiary PacifiCorp Power Marketing signed a $1 billion, 10-year power contract with the state Department of Water Resources on July 6.

Budraja failed to disclose the information in a form he filed in July, after energy consultants hired by Gov. Gray Davis came under fire for failing to file routine financial disclosure forms.

Budraja's August economic disclosure form states that he sold his ScottishPower shares July 30 on the advice of his lawyer. He purchased the shares "pre-96," according to the form.

Davis's office has sent a copy of Budraja's amended filing to the state's Fair Political Practices Committee for review, said Bill Kissinger, Deputy Legal Affairs adviser for Davis.

The FPPC is conducting an investigation into a handful of the DWR's consultants who held stock in energy companies while working on behalf of the state buying power and negotiating contracts, Kissinger said.

The DWR, which is handling the job of buying power in lieu of California's insolvent utilities, said Budraja didn't negotiate the contract with PacifiCorp. The department disclosed the contract on Aug. 17.

Stephen Kaufman, a lawyer representing the Electric Power Group and Budraja, also said Budraja didn't help negotiate the contract. Kaufman added that Budraja's ScottishPower holdings were tied up in an IRA and that Budraja hadn't even realized he held stock in the company until a review of his financial records was undertaken recently.

"A decision was made upon reviewing all of Mr. Budraja's assets to disclose this to the public given all the activities going on and the press accounts," Kaufman said. "The signing of the contract was of no consequence in deciding whether or not it should be sold. This was a very small holding that was part of an IRA purchased prior to 1996. He did not remember or realize he had this holding until after this situation blew up and took a look at all of his holdings."

     Political Battle Continues

Budraja included the following comment with his renewed filing:

"The information contained in the two previously filed form 700s was provided pursuant to a series of instructions provided by the Department of Water Resources starting on June 15, 2001, that my disclosure should reflect the facts that existed on the date you first began working for the California Energy Resources Scheduling," Budraja wrote, referring to the Department of Water Resources' power-buying arm. "This amended form is filed to list information not previously provided based upon consultation with and advice of legal counsel regarding the disclosure required by the Political Reform Act."

The disclosure is the latest in a battle over possible conflicts of interest waged by Secretary of State Bill Jones, a Republican who hopes to challenge Davis, a Democrat, next year for governor.

Jones began pressing consultants hired by Davis' administration in July to disclose their shareholdings in energy companies. Once they did, Jones asked federal and state regulators to investigate possible insider trading and conflicts of interest.

Budraja, a former Edison International (EIX) vice president, is one of the state's two main power-contract negotiators. Electric Power Group is under contract to plan and execute the DWR's power purchases and to help coordinate between the agency and other state offices. His firm has 10 employees under contract to the DWR. Electric Power Group is to receive $6.2 million for those services through Dec. 31, 2002.

As reported, investigators with the U.S. Securities and Exchange Commission are looking into Budraja's shareholdings. The consultant has confirmed receiving a letter from the SEC informing him of the inquiry and asking him to supply information regarding his investments as of Jan. 1.

In July, Budraja disclosed holding in Edison International and Dynegy Inc. (DYN), both of which he sold after he began working for the state.

The state's contract with PacifiCorp was negotiated by Richard Ferreira, the former Sacramento Municipal Utility District executive, and a representative from Navigant consulting, said DWR spokesman Oscar Hidalgo.

Ferreira was fired in late July because he held stock in Calpine Corp. (CPN) while negotiating long-term contracts with the company, according to Davis' office.

The Republican leadership in the state Legislature has called for oversight hearings into the state's $43 billion in long-term power contracts, as well as its spot-market purchases. The Democratic majority has yet to respond to the request.

-By Jason Leopold, Dow Jones Newswires; 323-658-3874; [email-masked]

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URL for this Article:
http://interactive.wsj.com/archive/retrieve.cgi?id=DI-CO-20010823-007277.djm

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Copyright ? 2001 Dow Jones & Company, Inc. All Rights Reserved.