Due to the inability to access the Internet this morning I will try to send out an afternoon edition of California Issues.

Thank you,

Davis-Burton feud swirls over Edison bailout 
Sacramento Bee, Sept. 18, 2001

Davis adviser's memo stirs a furor: A threat to quickly expose certain Riordan donors is called extortion.
Sacramento Bee, Sept. 18, 2001

Burton: No special session necessary for energy issues 
San Diego Union Tribune, Sept, 17, 2001

State power regulators to investigate Edison's safety record 
San Diego Union Tribune, Sept, 17, 2001

Group to Defend Ads Criticizing Davis
LA Times, September 18, 2001



Davis-Burton feud swirls over Edison bailout 
By Kevin Yamamura
Bee Capitol Bureau
(Published Sept. 18, 2001) 
The legislative session ended Friday with a dramatic standoff between two of the state's most powerful Democrats. 
The feud between Gov. Gray Davis and Senate President Pro Tem John Burton remained the talk of the Capitol on Monday. How they resolve the intraparty dispute will have a significant effect on whether California saves the state's second-largest utility from bankruptcy. 
Both the governor and Burton said they intend to negotiate before they bring lawmakers back sometime in early October. Otherwise, Burton said, "it might be incumbent upon people to show up on the first day and recess." 
For now, the relationship between the state Senate and the governor is strained, owing partly to what some lawmakers perceived as an insult from Davis at the end of the session. 
At issue is Davis' plan to have the state help Southern California Edison reduce its debt. The Senate opposes the governor's plan, fearing that it would punish too many small customers. 
"We passed a bill, it was a lot cleaner bill and a better bill for the people of the state of California than the one that was sent back to us that the administration wanted us to vote for," Burton said Monday. 
Davis, meanwhile, has portrayed his plan as the only way to remove the state from the power-buying business and prevent a second utility bankruptcy. His spokesman, Steven Maviglio, said the governor is risking political capital to pass a deal. 
"This is an extremely unpopular bill," Maviglio said. "Sometimes you've got to do what's right and not what's popular." 
Over the weekend, Burton said repeatedly that the Davis plan only had seven Senate votes out of the 21 required. In a week marked by the national tragedy of terrorist attacks on the East Coast, the governor's last-minute lobbying was not enough. 
Sen. John Vasconcellos, D-Santa Clara, said he received calls from Edison International Chairman John Bryson, Davis energy adviser Michael Peevey and former Secretary of State Warren Christopher on behalf of the Edison plan, all on Friday. 
"I'm not going to come back (in session) to twiddle my thumbs if people are going to jam me," Vasconcellos said. 
With the Edison plan doomed in the Senate, Davis Saturday told legislators that he would call them back in two weeks. 
In a statement, Davis said he was "proud of the work done by the Assembly," but "unfortunately the Senate has not gotten the job done." 
Some Senate lawmakers perceived that as an insult to their work, particularly since the governor's statement came at the end of a 15-hour workday. Burton called those remarks a "shameful thing." 
Maviglio pointed to two Senate actions that upset the governor. In one instance Friday, Davis met with Burton but was rebuffed. 
"(The governor) made a personal appeal to him and said, 'I need this,' " Maviglio said. "And that was rejected." 
Meanwhile, Davis was particularly incensed that the Senate passed a resolution that would have ended California's "state of emergency" and the governor's emergency powers. 
Burton said Monday that some senators were concerned that Davis would use his "sweeping powers" when lawmakers were out of town. The Assembly eventually killed the resolution. 
Caught unaware, the governor took it as an affront. 
"You know, they spit in our eye," Maviglio said. "It's not surprising that the governor said the simple fact that the Senate failed to act."




Davis adviser's memo stirs a furor: A threat to quickly expose certain Riordan donors is called extortion.
By Emily Bazar
Bee Capitol Bureau
(Published Sept. 18, 2001) 
Gov. Gray Davis' top political adviser has sent an unusual memo to 2,000 of the governor's major contributors, warning that any large donations they make to Republican challenger Richard Riordan will be disclosed during the coming weeks under new campaign finance rules. 
The letter, which was written by Garry South and mailed last week, has triggered allegations of abuse of power and blackmail from Davis' GOP opponents. 
The letter has also provided voters a brief glimpse of the political mudslinging they can expect should Riordan, the former mayor of Los Angeles, officially declare his candidacy for the governor's job. 
Riordan, who has been campaigning informally for the last few months, is expected to announce his gubernatorial bid in mid- to late October. 
"Exactly one month from today, the whole world will know who has contributed to Riordan in the last three months, and how much," says the letter dated Sept. 10. "Contrary to the impression being left with some potential donors, the Riordan campaign's fund raising is going to be instantly transparent." 
South argues that the one-page letter was intended to inform donors that the Riordan campaign -- which may have tried to solicit money from them -- has given out incorrect information about campaign finance disclosure deadlines. 
"We had been getting reports back that Riordan was calling our major donors ... trying to raise money," South said. "Some were being led to believe that if they made contributions, nobody would know about it for months." 
Addressing the letter to "friends and supporters of Governor Davis," South told them that the early primary election on March 5 has accelerated the deadlines for campaign finance disclosure statements. This year, he wrote, the next disclosure report will be due Oct. 10. In past years, when primaries were held at a later date, Jan. 31 was the deadline. 
The letter also explains that a recent bill signed by Davis, SB 34, requires statewide candidates and ballot measure committees to disclose within 10 days contributions of at least $5,000 received more than 90 days before an election. 
Officials from Riordan's campaign, however, don't believe South's motives were pure. Riordan spokesman Dan Schnur said the letter is an abuse of power. 
"It's clearly a not-very-veiled threat designed to prevent past Davis donors from giving money to Riordan," he said. 
Because Davis is considered a pro-business Democrat who raises money in the business community, some of the donors interested in supporting Riordan likely have also given money to Davis, Schnur said. 
"We have heard from several donors and potential donors who have received the letter," he said. "They're outraged." 
Campaign officials for Secretary of State Bill Jones, another Republican gubernatorial hopeful, also spoke out against the letter. 
Jones spokeswoman Beth Miller labeled the memo "blackmail and intimidation." She said the letter seems to imply that the governor will take revenge on anyone who gives to Riordan. 
The timing of the letter is particularly important, she said. It was sent just before Davis entered the intense monthlong bill-signing period that ends Oct. 14. 
"It's fair to say it borders on extortion," Miller said. "The language of this letter is blackmail. 'Do it and you'll pay the consequences.' ... It's especially astounding that it comes during bill-signing." 
Miller said Jones probably will ask the Fair Political Practices Commission to review the letter. 
South denied the allegations of blackmail, saying the letter was not a threat. He added, however, that it's his job to run the governor's campaign and to dissuade donors from giving to other candidates. 
"If someone gets that memo and says, 'I'm not going to give Riordan $100,000 because it's going to show up on a report 10 days later,' more power to me," South said. 
Robert Stern, president of the Center for Governmental Studies, said the letter is typical of South, who "plays hardball," but isn't illegal. 
In fact, Stern noted, Davis is going to be affected by the same upcoming campaign finance deadlines that will force Riordan to disclose his contributions. 
"It's transparent for everybody," Stern said. 
Indeed, both Riordan and Davis have had to disclose recent contributions of more than $5,000, as required by SB 34. 
Among Riordan's contributors was Stockton developer Alex Spanos, who gave $100,000 on Sept. 4. Among those who gave to Davis was the Twenty-nine Palms Band of Mission Indians, which donated $10,000 on Sept. 12.




Burton: No special session necessary for energy issues 
By Jennifer Coleman
ASSOCIATED PRESS 
September 17, 2001 
SACRAMENTO - Consumer groups and the Senate's top Democrat said Monday there's no need for an extra legislative attempt to save beleaguered Southern California Edison from bankruptcy. 
Although the Assembly voted to let Edison sell $2.9 billion in bonds to pay off part of its $3.9 billion debt, Senate Leader John Burton said he didn't bring it up for a vote in his house as the Legislature prepared to adjourn because not enough senators would vote for it. 
Gov. Gray Davis promptly announced he would call the year's third extraordinary legislative session so the Legislature could again attempt to craft a rescue plan for Edison. 
"There's no reason to come back and stay through a third, fourth, fifth or sixth special session unless there's a deal," Burton said Monday. "People aren't going to vote for something that they think is morally wrong and politically dangerous for them." 
Several senators tried to write a less-generous version of the Assembly plan, but Edison officials said that wouldn't help them, said Burton, a San Francisco Democrat. "Members felt that they didn't want to vote for a bill that helped Edison that Edison didn't want." 
The utility amassed $3.9 billion in debt from high wholesale prices last year. Without a state-backed rescue, the company says it will have no choice but to follow Pacific Gas and Electric Co. into bankruptcy. Davis announced in April that he had negotiated a plan with Edison to buy the utility's transmission lines and let the company issue revenue bonds, backed by consumers, to pay its debts. 
Lawmakers worked on several incarnations of the deal since then, but couldn't reconcile the different versions that passed each house. 
The third legislative session would deal exclusively with Edison, said Davis spokesman Steve Maviglio. Assembly and Senate leaders would set the date for the session to start. 
An Edison-only session, Maviglio said, will force the Senate to focus on only that issue. "The bottom line is that it has to be legislation that gets the state out of the power business and gets Edison solvent." 
Because the Assembly didn't adjourn the second extraordinary session on energy, the governor would have to call a third session to compel lawmakers to return to the capital. 
If the governor does that, Burton says he'll immediately adjourn it. 
"I don't know what the Legislature can do. Whatever we want to do, the Edison people say it isn't enough. It isn't enough. They want a flat bailout," Burton said. 
The Assembly approved a drastically changed version of the Senate bill, adding $400 million to the utility's bonding limit and including provisions to encourage renewable energy and limit cash transfers from the utility to the parent company. 
"We sent a bill to the Senate, one to accomplish one of the objectives of the legislation, which is to put the utility back on its feet," said Paul Hefner, spokesman for Assembly Speaker Bob Hertzberg, D-Van Nuys. "I don't know what more there is for us to do at this point." 
Edison officials declined to comment Monday. The company had opposed the Senate's plan to let Edison sell $2.5 billion in bonds, saying that wouldn't keep them from bankruptcy. 
Consumer advocate Harvey Rosenfield said Edison has "cried wolf" to lawmakers five times since January, setting deadlines by which it said it would file for bankruptcy 
"Now, of course, they said that they can wait until Oct. 15. I don't think Edison has much credibility with the legislators at this point," said Rosenfield, executive director of the Foundation for Taxpayer and Consumer Rights. 
His organization has promised a ballot measure to overturn any legislation that helps the utility. 



State power regulators to investigate Edison's safety record 
By Karen Gaudette
ASSOCIATED PRESS 
September 17, 2001 
SAN FRANCISCO - California power regulators are launching an investigation into Southern California Edison's safety record, citing 4,721 safety violations over three years. 
The Public Utilities Commission's consumer services division has linked 37 accidents to these alleged violations, tracked between 1998 and 2000. Five of which resulted in deaths, the PUC announced late Monday. 
The PUC will look into Edison's compliance with state Public Utilities Code provisions and commission orders on construction, operation and maintenance for electric lines and facilities. 
"Safety in the provision of utility service is a top priority for the commission," said PUC Commissioner Carl Wood in a written statement. "The public expects PUC safety requirements to be rigorously enforced, and we will meet that expectation." 
In a written statement Monday evening, Edison said it has begun a comprehensive review and analysis of the allegations. 
"We continue to believe that our program is one of the best in the indudstry and with respect to reliability of service and to the safety of our customers and employees," the company said. 
The PUC's consumer services division wrote that it had sent notices to Edison about their alleged violations. The division's report suggests there may have been a significant number of injuries and fatalities that might have been prevented by compliance with safety standards. 
The announcement comes just days after the state Senate refused to pass a plan backed by Gov. Gray Davis to let Edison sell several billion dollars in bonds to help settle its debts. Davis called the year's third extraordinary legislative session so lawmakers again could try to craft a rescue plan for Edison. 
Steve Maviglio, a Davis spokesman, said Monday that the investigation should not adversely affect Edison's chances of receiving financial help from the state. 
Edison, along with Pacific Gas and Electric Co., has struggled with debt since last summer, when electricity and natural gas prices shot up. A rate freeze prevented them from recovering the extra costs from customers. 




Group to Defend Ads Criticizing Davis
By ALEXA HAUSSLER
Associated Press Writer

September 18 2001, 12:14 AM PDT

SACRAMENTO, Calif. -- A Washington, D.C.-based taxpayer group that criticized Gov. Gray Davis' handling of the statewide energy crisis is now finding itself on the defensive.

A judge ruled on Monday that the American Taxpayers Alliance, which ran television ads criticizing the governor, must register as a political committee and identify its financial backers.

"Basically American Taxpayers Alliance has to play by the same rules that everybody else has to play by," said James Harrison, a San Francisco-based attorney representing Davis' re-election committee.

James Bopp, an Indiana-based attorney for the taxpayer group, said Monday it will appeal the ruling. He said the group is not a political committee.

"The First Amendment fully protects the right of citizens to praise or criticize the conduct of public officials while in office," Bopp said. "This ruling strikes at the heart of that right."

The group ran the ads for three weeks starting June 18. The ads ended with the phrase "Grayouts from Gray Davis," referring to the state's rolling blackouts.

The alliance is headed by Scott Reed, a Republican strategist, and the commercials were produced by consultants who helped produce ads for President Bush's presidential campaign.

Davis and other Democrats say the alliance's contributors include electric power generators that have been accused of overcharging the state.

Davis sued in July, claiming the group violated the state's Political Reform Act by failing to register with the California secretary of state. He argued that any group advocating for or against candidates must register.

But Bopp accused Davis of intending to "punish, harass or intimidate people who criticize him."

Davis is up for re-election in November 2002. His popularity slipped to its lowest point in the spring, when state officials were predicting a serious summer power shortage. But mild weather, long-term contracts with energy suppliers and other conditions led to a blackout-free summer, and Davis' approval rating is rebounding.

Still, the energy crisis -- which forced the state's largest utility into bankruptcy proceedings and caused an electricity rate increase and rolling blackouts earlier in the year -- is likely to be a key issue in next year's race.