Dept of Finance Complaint PRA 2019 2 47 PM PDF
Dept of Finance Complaint PRA 2019 2 47 PM PDF
Dept of Finance Complaint PRA 2019 2 47 PM PDF
, SBN 173967
AGUIRRE & SEVERSON, LLP
2 501 West Broadway, Suite 1050
San Diego, CA 92101
3 Telephone: (619) 876-5364
Facsimile: (619) 876-5368
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Attorneys for Petitioner and Plaintiff
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Michael J. Aguirre, Petitioner and Plaintiff, seeks a writ of mandamus requiring
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Respondent to adhere to its duty to provide public records requested pursuant to the California
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Public Records Act and Art. I, Sec. 3 of the California Constitution.
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INTRODUCTION
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By this verified petition and complaint, Petitioner and Plaintiff alleges:
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1. On 12 July 2019, the California Legislature voted to pass, and the Governor signed
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into law, a bill that will shift billions of dollars of investor-owned electric utility (IOU)
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companies’ uninsured wildfire costs per year from the blameworthy utilities to blameless utility
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ratepayers and Californian taxpayers. Assembly Bill (AB) 1054 authorized the California
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Department of Water Resources (DWR) to issue as many bonds as necessary to capitalize a fund
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PETITION AND COMPLAINT FOR DECLARATORY RELIEF
1 to pay IOU liabilities – an unlawful gift of public funds to the IOUs – while the California Public
2 Utilities Commission (CPUC) is empowered to order any electricity rate increases necessary for
4 2. The IOUs – most notably convicted corporate felon Pacific Gas & Electric
5 Company (PG&E) – ensured the passage of such a favorable law by spending millions upon
6 millions to curry favor with members of the California Legislature and the Governor’s office.
7 Such extensive campaign contributions and lobbying expenditures during the 2017-18 election
8 cycle by PG&E were used to induce those politicians to pass AB 1054. PG&E spent:
9 (1) $550,000 to sitting legislators, $1.32 million to state-level and local Democratic and
Republican parties of California, and $208,400 to Governor Gavin Newsom,1
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11 (2) $10 million worth of lobbying in 2018 alone.2 An ABC 10 investigative report revealed
PG&E in fact “spent almost $12 million lobbying the state government and another $14
12 million lobbying Congress in Washington, D.C.”3
13 3. Relative to other bills, let alone one of such magnitude and with such far-reaching
14 effects on the people of California, the general public was offered little time and few
16 (1) introduced on 27 June 2019 through the gut-and-amend procedure, chosen specifically
to bypass legislative deadlines and public review processes;
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(2) received significant amendments on 5 July 2019 which introduced new problems, failed
18 to address underlying problems, and ballooned the bill to a staggering 57 pages in length;
19 (3) packaged with two additional bills which would provide funding and oversight for the
processes laid out in AB 1054, further frustrating the ability of members of the Legislature,
20 let alone members of the public, to understand what the bill would authorize;
21 (4) passed all Senate committees and floor on 8 July 2019, on the first business day
following its substantial amendments;
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(5) passed the Assembly committees and floor on 11 July 2019, only three days after the
23 Senate voted, throughout which many Assemblymembers revealed their support for AB
24 1
See generally California Secretary of State, Cal-Access Campaign Finance Database entry for
PG&E Corporation and Affiliated Entities, Election Cycle for 2017 through 2018, http://cal-
25 access.sos.ca.gov/Campaign/Committees/Detail.aspx?id=1007836&view=contributions&session
=2017
26 2
See e.g. Thomas Fuller and Ivan Penn, “The Political Playbook of a Bankrupt California
Utility,” The New York Times (Feb. 23, 2019), https://www.nytimes.com/2019/02/23/us/pge-
27 california-politics.html
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See Brandon Rittiman, “FIRE – POWER – MONEY, Episode 3 of 3,” ABC 10 (July 10, 2019),
28 timestamp 00:14:12 to 00:14:40, https://www.abc10.com/firepowermoney
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PETITION AND COMPLAINT FOR DECLARATORY RELIEF
1 1054 was made difficult by them having few opportunities to read, let alone understand, the
57-page bill, and
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(6) became law through the Governor’s signature only six days after being substantially
3 amended.
4 4. Compounding all the above, the California Department of Finance (DOF) was
5 required to issue a fiscal impact report stating how much AB 1054 would cost the State and the
6 people of California, and various other records which would enable members of the public to
8 5. On 5 July 2019, plaintiff requested the DOF provide any documents and analyses
9 regarding AB 1054, including fiscal impact reports. On 6 July 2019, plaintiff clarified his request
10 for a fiscal impact report for AB 1054. There was a compelling public interest in a timely and
11 immediate production of those records because the Governor imposed a deadline of 12 July for
12 the passage of AB 1054, only seven days from when AB 1054’s authors substantially rewrote the
13 57-page bill.
15 hearing of 9 July 2019, Petitioner again requested the report from DOF staffers, only to be told
16 that while such a report had been prepared, the report was not yet ready for members of the
17 public. Petitioner explained to the DOF staffers that the finished report needed to be made public
19 7. Instead of providing its AB 1054 file in time to facilitate public participation in the
20 legislative process, the DOF delayed production until after AB 1054 was adopted. Despite
21 plaintiff’s numerous and repeated requests for the requested writings in time to inform the public
22 discussion around AB 1054, the DOF stonewalled production — providing only one document on
23 12 July 2019, hours after AB 1054 was signed into law by Governor Newsom. As for another set
24 of documents, the DOF delayed production until 29 July 2019. The DOF continues to conceal a
25 third set of relevant documents. The instant petition seeks production of these withheld writings.
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PETITION AND COMPLAINT FOR DECLARATORY RELIEF
1 PARTIES
3 California Department of Finance produce the public records sought in this proceeding under Art.
4 I, Sec. 3 of the California State Constitution and the California Public Records Act.
7 the records sought by Petitioner through blanket assertions of various exemptions, despite his
9 10. The true names and capacities of those Respondents sued herein as DOES 1
10 through 50, inclusive, whether individual, corporate, associate or otherwise, are unknown to
11 Petitioner, who sue those Respondents by such fictitious names. When the DOE parties’ true
12 names and capacities and their actual involvement in the matters alleged herein are ascertained,
14 11. Petitioner is informed and believes, and thereon alleges, that each of the factiously
15 named defendants designated hereunder as a DOE is responsible in some manner for the
16 occurrences alleged herein, and that Petitioner’s damages as herein alleged were proximately
18 12. Petitioner is informed and believes, and thereon alleges, that at all relevant times
19 herein, each of the Respondents was the agent, employee, partners, joint venture, alter ego, and/or
20 co-conspirator of one or more of the remaining Respondents and in doing the acts alleged herein,
21 was acting within the purpose, course and scope of such agency, employment joint venture or
22 conspiracy, and with the consent, permission or ratification of one or more remaining Petitioner.
24 13. Jurisdiction is pursuant to Cal. Code Civ. Proc. § 410.10 and Cal. Const. Art. VI, §
25 10, which confers upon superior courts original jurisdiction over applications for mandamus,
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PETITION AND COMPLAINT FOR DECLARATORY RELIEF
1 14. Venue in Sacramento County is proper under Gov. Code, § 6259, subd. (a).
2 because some or all the public records sought are at the Department’s office in the County of
3 Sacramento.
4 BACKGROUND
6 15. On 5 July 2019, Petitioner issued the following records request to the DOF:
7 Please provide under the California Public Records Act and Art. I Sec. 3 of the
California Constitution any (1) communications relating to AB 1054, and (2) any other
8 writings relating to AB 1054, including (but not limited to) bill analyses.
9 My request is for documents relating to AB 1054 as amended on June 27, 2018, which
is the wildfire bailout bill, and for any versions thereafter (as AB 1054 is likely to be
10 amended continuously). I am not seeking documents for the previous version of AB
1054, which was gutted and replaced to become the wildfire bailout bill.
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12 16. On 6 July 2019, Petitioner clarified his request to specifically include AB 1054’s
13 fiscal impact report as it relates to six provisions of the bill. Petitioner quoted the six provisions in
14 full to ensure the DOF understood exactly what the DOF needed to disclose to the public:
27 With respect to certain documents, Finance also cites Government Code section
6254(l) to not provide correspondence of and to the Governor or employees of the
28 Governor’s Office, and the attorney-client privilege, incorporated into the Public
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PETITION AND COMPLAINT FOR DECLARATORY RELIEF
1 Records Act by Government Code section 6254(k). For two documents, Finance
cites Government Code section 6254(c) to remove a personal e-mail address, the
2 disclosure of which would constitute an unwarranted invasion of personal privacy.
3 In response to your request, Finance provided you its bill analysis of AB 1054 on
July 15, 2019. Attached are additional responsive documents. We estimate we will
4 provide you any additional documents by August 2, 2019.
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II. CONTEXT IN WHICH CLAIMS ARISE
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20. In August 2017, following a trial held in early 2017, two administrative law judges
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at the California Public Utilities Commission (CPUC) ruled that investor-owned electric utility
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San Diego Gas & Electric Company (SDG&E) had been imprudent when its equipment and
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actions caused the 2007 San Diego wildfires, thus denying SDG&E’s request to force utility
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customers pay SDG&E’s $370 million in uninsured wildfire costs. The CPUC judges found
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SDG&E was imprudent based in part on the fact that SDG&E violated state-level fire safety
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standards for electric transmission equipment, known collectively as General Order 95.
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21. In a two-year period spanning 2017 and 2018, SCE equipment caused catastrophic
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wildfires in Ventura and Los Angeles counties. In the same time period, PG&E equipment
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caused a series of catastrophic wildfires in Northern California. Collectively, these fires led to the
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deaths of over a hundred people and tens of billion dollars in uninsured wildfire costs. The 2018
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Camp Fire alone caused $16 billion in damages and killed 85 people.
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22. PG&E and SCE management and shareholders believed their respective IOUs
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caused those 2017 and 2018 fires while being in violation of General Order 95. Indeed, the
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California Department of Forestry and Fire (Cal Fire) has confirmed IOUs to be responsible for
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causing these catastrophic wildfires, including those which caused billions in damage over the
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last two years.4
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See e.g. Cal Fire and CPUC Safety and Enforcement Division archive for their investigatory
reports into the 2017 Northern California wildfires, ftp://ftp.cpuc.ca.gov/I19-06-015/I.19-06-
25 015%20October%202017%20NorCal%20Fires/; See also CPUC Safety and Enforcement
Division, “Report on October 2017 Fire Siege,” dated June 13, 2019, page 4 (“SED found PG&E
26 violated several General Order (GO) rules… and also failed to follow industry best practices.”);
Ventura County Fire Department, “VCFD Determines Cause of the Thomas Fire,” press release,
27 https://vcfd.org/news/335-vcfd-determines-cause-of-the-thomas-fire; Cal Fire, “CAL FIRE
Investigators Determine Cause of the Camp Fire,” press release dated May 15, 2019,
28 https://fire.ca.gov/media/5038/campfire_cause.pdf
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PETITION AND COMPLAINT FOR DECLARATORY RELIEF
1 23. PG&E declared bankruptcy on 29 January 2019, citing $30 billion in wildfire-
3 two separate media outlets have revealed PG&E spent millions lobbying the California
4 Legislature in the last year. PG&E also issued billions in dividends to its shareholders over the
5 past few years instead of overhauling electric power lines the company knew in advance were
7 24. Indeed, PG&E turned to Governor Newsom, to whom it had made over $208,000
8 in campaign contributions, and requested that the Governor change the fire safety rules so that
9 PG&E did not have to show it complied with General Order 95 when its equipment and
10 operations caused the 2017 and 2018 fires. SCE, knowing PG&E had made substantial campaign
11 contributions to the Governor, joined PG&E’s effort to secure a legislative reprieve from the
13 25. In turn, the Governor employed Paul Rosenstiel, a board member of the California
14 State Teachers’ Retirement System (CalSTRS), to be his special advisor. Records disclosed by
15 the Department of Finance on 29 July 2019 reveal a flurry of correspondence between Rosenstiel,
16 other key individuals in Governor Newsom’s administration, and outside consultants. The
17 content of their communications reveal they sought to determine how the State of California
18 could use its taxpayer money to capitalize a fund through which bonds would be raised, after
19 which utility ratepayer money would be used to pay for the bonds. Meanwhile, the money raised
20 by the bonds would go to the IOUs to pay off any wildfire liabilities. In short, the Governor put
21 together a team of financial experts to determine how to redirect taxpayer and utility ratepayer
24 treasurer office Bill Dowell: “Can you tell me how much is held in the SMIF? Do you have June
25 30 numbers, or whatever is most recent would be great. Thanks.” Rosenstiel’s question about the
26 SMIF is in fact a reference to the Surplus Money Investment Fund. Dowell wrote back: “Total
27 5
Katherine Blunt, Russell Gold, “PG&E Knew for Years Its Lines Could Spark Wildfires, and
Didn’t Fix Them,” Wall Street Journal (July 10, 2019), https://www.wsj.com/articles/pg-e-knew-
28 for-years-its-lines-could-spark-wildfires-and-didnt-fix-them-11562768885
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PETITION AND COMPLAINT FOR DECLARATORY RELIEF
1 SMIF balance of $48,043,746,000.” Rosenstiel requested this information in order to determine
2 how much public money could be used to capitalize the scheme by which state bond money
3 would be turned over to PG&E and SCE to pay their uninsured wildfire costs.
4 27. As revealed by a 5 July 2019 email from Holly Vocal of the Bank of
5 America/Merrill Lynch (BAML) public finance investment banking team to Rosenstiel, BAML
7 1054 as well as related bank and market capacity information.” BAML approved of AB 1054’s
8 bond-issuance mechanism: “Overall, we thought that the legislation looked good from a
9 security/credit perspective: financing order establishing property right, true-up mechanism, etc…
12 1064 that provided; “From a credit and marketing standpoint, AB-1054 presents an attractive
13 security structure for the funding a portion of the Wildfire Victim Fund with a securitization of
14 IOU ratepayer contributions… BANA anticipates there will be broad bank market support for the
15 proposed Wildfire Bonds on either a traditional or direct purchase basis.” The presentation also
16 included a page captioned, “Legal Strengths of Proposed Bond Structure;” such strengths
22 – the day before AB 1054 was gutted-and-amended to be the vehicle for Governor Newsom’s
23 IOU wildfire bailout. On or before 8 May 2019, the Governor retained Filsinger to perform such
25 30. As revealed by Bloomberg on 8 May 2019, Filsinger reported a wildfire fund sized
26 at $10 billion had a 98% chance of being depleted by 2030.6 However, the 26 June 2019
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Mark Chediak, “A $10 Billion Fund for California Fire Costs May Dry Up by 2030,”
Bloomberg (May 8, 2019), https://www.bloomberg.com/news/articles/2019-05-09/a-10-billion-
28 fund-for-california-fire-costs-may-dry-up-by-2030
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PETITION AND COMPLAINT FOR DECLARATORY RELIEF
1 Filsinger report disclosed to Petitioner concluded a $22 billion fund – the fund size adopted by
2 AB 1054 – had only a 22% chance of being depleted by 2035. It appears the 26 June 2019
3 Filsinger conclusion was materially inconsistent with the 10 May 2019 report.
7 forth herein.
8 2. Respondents have a clear, present and sacrosanct duty to comply with the
9 Constitution of the State of California. (Gov. Code § 6250 et seq.) Petitioner has performed all
10 conditions precedent to filing this petition. There are no administrative exhaustion requirements
11 under Gov. Code § 6250 et seq. Petitioner has no plain, speedy, and adequate remedy in the
12 ordinary course of law other than the relief sought in this petition.
14 withheld and/or redacted in its July 29, 2019, response to Petitioner’s records request because the
17 question in every case is whether the disclosure of materials would expose an agency’s decision-
18 making process in such a way as to discourage candid discussion within the agency and thereby
19 undermine the agency’s ability to perform its functions.” Times Mirror Co. v. Superior Court
20 (1991) 53 Cal. 3d 1325, 1342. To assert the deliberative process privilege, a public agency must
21 provide specific facts showing, or otherwise identify, which exempted, and/or redacted records
22 reflect “deliberative or policy-making processes on the one hand,” as opposed to “purely factual,
24 5. In the DOF’s July 29 response to Petitioner, the DOF claimed it withheld records
25 “that were part of the Governor’s and Director of Finance’s deliberative process privilege as it
26 relates to the deliberations of the Governor’s Office and Finance regarding the content of AB
27 1054 and deliberations within Finance regarding the content of the bill analysis for AB 1054” on
28 the basis that “the public interest served by not disclosing these documents clearly outweighs the
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PETITION AND COMPLAINT FOR DECLARATORY RELIEF
1 public interest served by their disclosure.” The blanket assertion of the deliberative process
2 privilege, followed by the content of the records narrated above which shows the Governor’s
3 office pieced together a scheme with the support of various consultants to transfer taxpayer and
4 ratepayer money to IOU wildfire liabilities, indicates there may be many more records of
7 lingering question nevertheless remains whether the public interest in nondisclosure clearly
8 outweighs the public interest in disclosure.” Times Mirror Co. v. Superior Court, 53 Cal. 3d at
9 1344. The weight of the public interest “is proportionate to the gravity of the governmental tasks
10 sought to be illuminated and the directness with which the disclosure will serve to illuminate.”
11 Los Angeles Unified School Dist. v. Sup. Ct. (2014) 228 Cal. App. 4th 222, 242. In assigning
12 weight to the public interest in disclosure, “courts must look not only to the nature of the
13 information requested, but also how directly the disclosure of that information contributes to the
15 7. The weight of the public interest in disclosure here is significant. The public
16 deserves to know to what extent the investor-owned utilities and their investors have unduly
17 influenced the Department of Finance and other key players in the state government against the
18 interests of ratepayers and more generally, the people of California. It is well understood the
19 investor-owned electric utilities, not their ratepayers, have caused wildfire after wildfire because
20 of their lackadaisical attitude towards safety compliance. Yet, AB 1054 includes a ratepayer-
21 funded bailout of the utilities’ wildfire liabilities.
23 needed to determine to what extent AB 1054 is the result of utility lobbying instead of the
2 Respondents concerning their respective rights and duties as to Petitioner's right to receive
3 records.
4 11. Petitioner requests the court issue a declaration affirming Petitioner's right to be
6 PRAYER
8 1. For a declaration that the records requested are required to be produced under the
9 Public Records Act, and Art I, Sec 3 of the California State Constitution;
10 2. In the alternative, for the issuance of an order to Respondent to show cause why
13 California Department of Finance to expeditiously disclose any withheld and redacted writings
15 4. For a declaration that, to the extent the deliberative process exemptions are found
16 to be present, the public interest in disclosure clearly outweighs the public interest in
17 concealment;
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PETITION AND COMPLAINT FOR DECLARATORY RELIEF