Pluralistic: SoCal Gas spent millions on astroturf ops to fight climate rules (19 August 2023)


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A wood-panelled public meeting room with a full gallery. A marionette stands at a mic, testifying. On the wall is the logo for SoCal Gas.

SoCal Gas spent millions on astroturf ops to fight climate rules (permalink)

It's a breathtaking fraud: SoCal Gas, the largest gas company in America, spent millions secretly paying people to oppose California environmental regulations, then illegally stuck its customers with the bill. We Californians were forced to pay to lobby against our own survival:

https://www.sacbee.com/news/politics-government/capitol-alert/article277266828.html

The criminal scheme is spelled out in eye-watering detail in a superb investigative report by Joe Rubin and Ari Plachta for the Sacramento Bee, which names the law firms and individual lawyers involved in the scam.

Here's the situation: SoCal Gas is California's private, regulated gas monopoly. They are allowed to lobby, but are legally required to charge their lobbying activities to their shareholders, and are prohibited from raising customer rates to pay for lobbying.

The company spent years secretly violating this rule, in the sleaziest way possible: working with corporate cartels like the California Restaurant Association and BizFed, the monopoly paid BigLaw white-shoe firms to procure people who posed as concerned citizens in order to oppose climate regulations that are essential to the state's very survival.

The bill topped $36 million – and it was illegally charged to its customers, the Californians whose immediate health and long-term survival these efforts opposed. SoCal Gas refuses to disclose the full extent of the spending, as do its lawyer-procurers, who cite legal confidentiality and a First Amendment right to secretly seek to influence policy in their refusal to disclose their profits from this illegal conduct.

The law firms involved are a who's-who of California's most prominent corporate fixers, including Reichman Jorgensen and Holland & Knight. The partners involved have a long rap sheet for anti-climate dirty tricking, most notably Jennifer Hernandez, notorious in climate justice history for an incident where activists claim she posed as one of them, infiltrating a campaign to force corporate despoilers to clean up their pollution in order to sabotage it, while secretly on a wealthy, prominent landowner's payroll.

Hernandez claims to care about the environment and says that her longstanding, corporate-funded, extensive campaigns and lawsuits against state environmental regulations are motivated by concern over their impact on working people. Her firm, Holland & Knight, denies serving SoCal Gas in opposing gas regulations, but it received $594k in ratepayer dollars, and submitted comments opposing the rules on its own behalf. Those comments were nearly identical to the comments submitted by SoCal Gas.

Hernandez also represents an obscure organization called The Two Hundred for Home Ownership in "a flurry of lawsuits" over California Air Resources Board rules on pollution, seeking to overturn the state's landmark climate change regulations.

Two Hundred for Home Ownership was founded by Robert Apodaca, who told the Bee that Hernandez's work for him is pro bono and not funded by SoCal Gas, but his entry into the fray occurred just as SoCalGas was founding an astroturf group called Californians for Fair and Balanced Energy (C4BES), which pretended to be an independent organization, disguising its relationship with SoCal Gas.

Apodaca is also founder of United Latinos Vote, an organization that had been largely dormant for seven years, not receiving any donations, until 2018, when the California Building Industry Association gave it $99k. The CBIA is a large-dollar recipient of donations from SoCal Gas, and its CEO insists that it was not acting on SoCal Gas's behalf when it made its unpredented donation to Apodaca.

The CBIA donation to United Latinos Vote was forerunner to a flood of corporate donations from the likes of Chevron, Marathon and Phillips 66. Shortly after receiving this cash, United Latinos Vote ran a full page ad in the LA Times, accusing the Sierra Club of pushing for anti-gas appliance rules that would harm working class Latino families.

This ad, in turn, featured prominently in advocacy by the SoCal Gas front group C4BES, funded with $29.1m in ratepayer money, which it then spent seeking to link clean appliance rules with anti-Latino racism. A quarter of California's carbon emissions come from home gas use.

SoCal Gas is regulated by the California Public Utility Commission (CPUC), which tolerated this mounting illegal conduct for many years, even as the company circulated internal memos as early as 2015 discussing its plans to oppose electrification in the state on the basis that it constituted "a significant risk to our business."

But last year, CPUC fined SoCal Gas $10m. Now, CPUC's Public Advocate office has filed a damning, extensive report on SoCal Gas's unlawful conduct, seeking $80m in rate cuts to compensate Californians for the funds misappropriated to protect the company's shareholder interests:

https://docs.cpuc.ca.gov/PublishedDocs/Efile/G000/M517/K407/517407314.PDF

Additionally, the Public Advocate is demanding $233m in fines for the company's refusal to allow investigators to audit its books and discover the full extent of the fraud.

SoCal Gas is the nation's largest utility, but (incredibly), it's not the dirtiest. That prize goes to Ohio's FirstEnergy, which handed $60m in ratepayer dollars to state politicians in illegal bribes in exchange for coal and nuclear subsidies and cancellation of state climate rules. That scandal led to GOP speaker of the Ohio House Larry Householder being sentenced to 20 years in prison:

https://en.wikipedia.org/wiki/Ohio_nuclear_bribery_scandal

There is something extraordinarily sleazy about using ratepayers' own money to lobby against their interests. SoCal Gas and its Big Law enablers have funneled millions in Californian's money into campaigns to poison us and boil us alive, and they did it while using workers and racialized people as human shields.

(Image: Maryland GovPics, https://www.flickr.com/photos/79874304@N00/197532792 CC BY 2.0, modified)

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Colophon (permalink)

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