TCS Daily

Gray Davis' Million-Dollar Consultants 'Invest' for the Future

By Hugh Hewitt - August 1, 2001 12:00 AM

If you do not know the name Chuck Quackenbush, you can be forgiven. Until June 28, 2000, he was the elected Insurance Commissioner of California. Quackenbush resigned that day, following a series of disclosures concerning his management of claims against insurance companies in the aftermath of the 1994 Northridge earthquake. The Los Angeles Times went after Quackenbush with a fury, as did Democrat-led committees in the Democrat-dominated State Senate and Assembly. The key charge was that Quackenbush entered into self-serving settlements with the companies, the proceeds of which were, in the words of the Santa Cruz Sentinel, "funneled into non-profit corporations and doled out for an ad campaign to polish Quackenbush's image as part of his quest to become governor." Media power was fueled by legislator bombast and the assistance of Democrat State Attorney General Bill Lockyer. And Quackenbush was doomed.

So here's the question: What is the difference between Governor Gray Davis and former Insurance Commissioner Chuck Quackenbush?

A. The Los Angeles Times loves Gray Davis.

B. The state legislature is populated by partisans who would never target a fellow Democrat but will hound Republicans like Quackenbush.

C. The Sacramento Bee, the San Francisco Chronicle, and other papers think Texas power companies and national insurance companies are bad and public power socialists like California energy czar David Freeman are good.

D. Gray Davis is an unusally good liar, to paraphrase former Nebraska Sen. Bob Kerrey.

E. All of the above.

The answer, of course, is "E." Poor Quackenbush got run over by a well-oiled Democratic machine that runs in tandem with the state's newspapers. Since the sale last year of the Times to the Tribune Company, watch-dog journalism has been replaced by lap-dog adulation. Sadly, no other paper has filled that void, and so the stories exposing the Davis follies are to be found in the national media, where follow-up is difficult to maintain.

Certainly no Republican could have survived the four revelations concerning our unGovernor that have come out in the past month.

First, a court order obliged Davis to reveal that the stories of the evil Texas energy companies draining away the wealth of California just weren't true. It turns out that the Canadians and the Los Angeles Department of Water and Power were among the worst "gougers" and that Davis had that data at hand throughout his Texas-bashing. This deliberate deception went unremarked in the state's media.

Then came the resale fiasco. That crackerjack Davis team had been buying up all the power it could find at prices averaging $134 per megawatt for July. Cool California temperatures created a power glut, and so the state was obliged to resell the surplus, sometimes for a price as low as $1 a megawatt. This simple lesson in the competencies of public power bureaucracies passed with only an occasional eyebrow raised. The Wall Street Journal reported that the state had lost at least $30 million on such resales in July alone.

Next came word on Friday, July 27 that at least five of the four dozen people and firms hired as consultants by Davis had held stock in the companies from which they purchased power on behalf of the state. Davis sent these five packing, but hasn't taken any questions on the matter. The consulting fees for the Davis team top $25 million, and the conflict-of-interest probe should just be getting underway, though AG Lockyer has yet to be heard from. "Reliable Bill," as Democrats would be justified in calling him, was last heard from when he threatened a Texas energy executive with imprisonment with an amorous cellmate named Spike. That outburst, par for the course for Lockyer, generated chuckles among the Sacramento press corps, but little in the way of follow-up on the question of the ethics of such a tantrum. If the conflict probe depends upon Lockyer's efforts, it's over before it has begun.

And then, on Monday of this week, the Dow Jones Newswires carried the little bomb that Davis spokesman Steve Maviglio had purchased stock in Calpine Corporation on June 20, 2001. The story included Maviglio's assertion that he had based his purchase decision on publicly available information, and he dropped in a quote direct from the unGovernor's standard fare. Calpine is "not attempting to suck every dime out of the state and throw parties in Houston," Maviglio stated. Word has evidently not reached Maviglio that the story line needs reworking now that the secret contracts have slipped out. Also included in this story was the very pregnant statement that "SEC investigators said Sunday that a preliminary investigation has revealed that several employees and consultants working directly with Davis on energy issues have purchased 'significant' shares of Calpine stock between January and July." Now there's a lead. Don't hold your breath waiting for a California newspaper to thoroughly follow up.

To summarize, the worst Governor in state history has gotten a free ride because California lacks even the semblance of an aggressive media. The Times should be working its way towards a Pulitzer, but instead it's busy reporting on the use of ViagraĆ¢ in the adult film industry. (I'm not kidding. That was a column one story in July.) A few years back, when the Times was handed the Orange County bankruptcy story on a platter, it dismissed the notion that the county's Democratic treasurer had gambled the solvency of the county on high risk investments as the work of Republican hacks. It was a Republican candidate who handed the story to the Times who turned out to be right.

Once again the Times and the junior wannabes across the state are having a tough time with a complicated story. The Quackenbush story, now that was easy. The villains were a Republican officeholder and insurance companies. They were easy to spot. And the nice, do-gooding Democrats in the state legislature were eager to help point the way.

The power crisis, though, that's hard. Davis says he's doing his best. And he's appearing in front of all these new plants, right? And no one in the legislature is saying anything bad about him. So all must be well, don't you think?

It's just lucky for us that Quackenbush wasn't a Democrat, or we'd still be seeing his cheesy commercials.


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