Ethical Short Circuit

“I invested in a growing California company,” said the governor’s spokesman, Steve Maviglio, defending his May 31 purchase of $12,000 worth of stock in Calpine, a giant electric power generating company. Let’s count what’s wrong with that defense. May 31 was still at the height of the energy crisis, the state was buying billions of dollars worth of energy from Calpine and the company had just cleared the way to build a state-approved plant in San Jose. Gov. Gray Davis and Maviglio, his press secretary and acting director of communications, had frequently touted Calpine as the rare good corporate citizen at a time when companies had gouged the state of an alleged $9 billion.

What does it take in the Davis administration to see conflict of interest?

Maviglio says it’s not a crime to buy energy stock. No, but in this case it shows an appalling lack of judgment. Sadly, Maviglio should resign immediately. Sadly, because he has been a bright, even-tempered gubernatorial spokesman without the arrogance of his recent predecessors. But his ill-timed stock purchase is incomprehensible and unforgivable. If he won’t quit, the governor must fire him.

Davis has no choice if he wants to retain a shred of credibility in this murky business of the state becoming the buyer of electric power for its utilities, to the tune of $50 billion. First he hired two former Clinton administration fixers at $30,000 a month to develop energy communications strategies, even though they were working for Southern California Edison at the time. After the news media exposed the conflict, they quit and agreed not to charge for their services. Then the state had to fire five energy trading consultants for conflict or apparent conflict of interest in their ownership of energy stocks. A sixth quit. The Securities and Exchange Commission is investigating.

Davis has shrouded the state’s power-buying in secrecy, the excuse being to protect the state from manipulation by power gougers. But crisis does not justify ignoring ethical rules in public business.

The governor, who has spent perhaps too much time raising $30 million in reelection funds, has a crisis of his own now, in credibility. He sets the tone of the Capitol, and it is his job to clean up an atmosphere that may have allowed disregard for what’s right to flourish.