Legal action against a just-retired state regulator, Henry Duque, ended last week when the California Supreme Court refused to take an appeal by the former commissioner’s opponents, but the court roadblock prompted a powerful state legislator to propose a new law that in the future would automatically toss out a regulator caught voluntarily buying stock in a company that he or she regulated.

The proposed new law is SB 118, a generic energy bill that state Sen. Debra Bowen, Senate energy committee chairperson, is proposing to use to immediately to remove members of the California Public Utilities Commission found to have a conflict of interest. A Santa Monica, CA-based consumer group, the Foundation for Taxpayer and Consumer Rights, which brought a lawsuit two years ago against Duque, is now pushing the Bowen bill in the state legislature.

At issue is a $70,000 investment Duque had in a telecommunications company, Nextel, when he was voting on cases involving the company before the CPUC. The state Supreme Court last Wednesday refused to review an appellate court decision in the former CPUC commissioner’s favor.

Currently the law covering the CPUC doesn’t make the stock ownership a conflict of interest if the appointee buys it voluntarily, which Duque did in the case of the Nextel stock. The prohibition only covers “involuntary” stock acquisition, such as inheritances or gifts.

The taxpayer/consumer foundation that sued Duque is now urging the state’s Fair Political Practices Commission to look at the case, although Duque’s six-year term expired the end of last year.

SB 118 would make any conflict of interest grounds for immediately removing a CPUC commissioner. The consumer group and state lawmaker had held back on the new state law while the case was pending before the state Supreme Court. Now that court recourse has been exhausted, the group is pushing for the law to close the legal loophole for CPUC commissioners, and it is also seeking to have the current CPUC members terminate a consulting contract that Duque holds with the state regulatory commission.

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