FYI.  This is THE story out here today.  Given the repugnant things that 
Maviglio has said about Enron over the past several months, it will be very 
interesting to see whether he'll be able to withstand the fact that all the 
time that he was saying those things, he owned our stock.  Gee, couldn't 
happen to a nicer guy.

Best,
Jeff

In addition, all this buzz about conflicts with traders and Calpine could put 
in jeopardy the state's contracts with Calpine, which may, in the end, be a 
very good thing for Direct Access.
Davis spokesman under fire for stock 
By Amy Chance and Dale Kasler
Bee Staff Writers
(Published July 31, 2001) 
Davis administration spokesman Steve Maviglio acknowledged Monday that he 
bought stock in Calpine Corp. in June, at a time when the company was 
announcing a breakthrough in its bid to build a controversial San Jose power 
plant. 
His disclosure came several days after Gov. Gray Davis dismissed five state 
power purchasers for owning stock in the company and drew new complaints that 
Davis administration officials may have improperly mixed their private 
finances and their public roles. 
Maviglio, now acting as interim communications director for the 
administration, said he put in an "open" order for Calpine stock May 31, 
agreeing to buy 300 shares once the stock hit a certain price. 
He said that threshold was met June 20, the day after an action by the 
Federal Energy Regulatory Commission brought down "all energy stock prices 
across the board." 
Maviglio said he bought the stock for his individual retirement account, and 
it has since declined in value. Under terms of the open order, he said, he 
had no control over the exact date of purchase. 
Maviglio touted the company in his role as spokesman to the governor in a 
story published June 27 in The Bee. He said Monday that he was simply 
responding to a reporter's question about the company's positive reputation. 
"They have made a clear commitment to invest in California's future," 
Maviglio said at the time. "Their pricing has been far more reasonable than 
any other generator." 
In the interview, Maviglio also contrasted Calpine and Texas-based 
generators. He said Calpine "took a different tack from the Joe Bobs of the 
world," an apparent reference to Joe Bob Perkins, a senior executive with 
Reliant Energy Inc. of Houston. 
Maviglio acknowledged the stock ownership several days after the 
administration ended its relationship with several energy consultants who 
held stock in energy companies, including Calpine. 
Under pressure from Secretary of State Bill Jones, a Republican who hopes to 
challenge Davis for governor next year, the Davis administration has spent 
several weeks scrambling to answer questions about the stock holdings and 
potential conflicts of its consultants and energy traders. 
Jones said Monday that Maviglio should be fired. 
"These actions are unethical, unconscionable, unacceptable, and heads should 
roll," he said in a statement. He said the Democratic governor should direct 
all of his staff to immediately file updated conflict-of-interest statements 
to reflect current holdings. 
Jones, who last week asked the Securities and Exchange Commission to 
investigate administration consultants for insider trading, also said the 
probe should be expanded "to include all of the governor's staff." 
Federal law and SEC regulations forbid anyone from trading stocks while 
possessing "insider information" -- relevant facts not available to the 
public, according to the SEC. Violations can bring lawsuits and criminal 
prosecution. 
Michael Prozan, a Menlo Park lawyer and expert on insider trading, said the 
prohibition against it originally focused on halting company executives from 
profiting from news before it was disclosed publicly. 
But the laws have been broadened to include others besides company employees. 
Investment bankers, lawyers and journalists have been snared by 
insider-trading crackdowns. 
Davis' office was instrumental earlier this year in paving the way for 
removing barriers to construction of a Calpine plant in San Jose. On May 30, 
after opposing the project for years, San Jose Mayor Ron Gonzales announced 
he had negotiated an agreement addressing his concerns and agreed to support 
construction. 
His action came after Davis in April endorsed the plant's construction and as 
the state Energy Commission threatened to approve it over local objections. 
On June 20, the company announced it had won tentative state approval to 
build the plant. 
Maviglio said he buys many stocks and that Enron Corp. and Calpine are the 
only energy generators among them. He owns 100 shares of Enron stock, which 
he purchased in 1996. 
"I deal with hundreds of California companies just about every day, and this 
was one that I saw that looked like a good investment based on public 
knowledge," he said. "I read six newspapers a day or more, and I know what's 
going on in the world. If there's a standard that I can't invest in something 
that I have general public knowledge of, then I wouldn't have any stocks at 
all." 
Maviglio said that the "open" order he placed meant that he could not have 
used inside information to make his stock purchase. 
"Had I had specific knowledge about a contract being signed or what actually 
happened in the office of the mayor of San Jose ... that would have been 
unrelated," Maviglio said. "There was no timing-based sequence to it." 
Calpine stock, despite the company's considerable success, has slipped in 
recent weeks because of general investor anxiety about the California energy 
crisis. 
The stock, which trades on the New York Stock Exchange, closed at $49.30 on 
May 31, the day Maviglio says he placed the purchase order. The order was 
executed as the stock dipped below $40 on June 20, closing that day at 
$39.85. 
The day before, the Federal Energy Regulatory Commission announced a 
price-control plan that investors believed was damaging to generators' 
profits. On Monday, the stock closed at $37.13. 
Last week, the Davis administration stopped doing business with five energy 
traders under contract with the administration after Maviglio said 
administration lawyers "came to the determination that there are possible 
violations of the law or close to it." 
"It's not a crime to own energy stock," Maviglio said Monday. "The difference 
with these traders is they're making governmental decisions. They're 
committing the state's resources by spending money to buy power." 
Jim Knox, director of California Common Cause, said he believes the 
Governor's Office made critical errors while hiring staff to purchase energy 
for the state. 
"Had the Governor's Office gone to the trouble to have these people fill 
statements of economic interest, as they were required to do by law, they 
should have known this before they were hired and they shouldn't have been 
hired," Knox said. 


The Bee's Amy Chance can be reached at (916) 326-5535 or achance@sacbee.com 
<mailto:achance@sacbee.com>. 
Emily Bazar of The Bee Capitol Bureau contributed to this report.