California
Elias: California utilities panel’s conflicts of interest must be prevented
One of the more interesting statements in a recent news story about the just-arrived $34.50-per-month average increase in household bills from California’s largest utility, Pacific Gas & Electric, came from Carla Peterman, a top PG&E executive.
The money that PG&E (soon to be matched by its south state counterparts, Southern California Gas and San Diego Gas & Electric) will receive in this new $414-per-year average levy on each of its customers will be used to make the electric system safer and more renewable, Peterman claimed.
That’s pious talk typical of major utility executives, who usually take home high salaries and have never been held personally accountable for their professional actions and failings. One example: When PG&E was criminally convicted and fined hundreds of millions of dollars for causing multiple fatalities with disasters like a natural gas explosion and the wildfire destruction of virtually an entire town, no executive suffered any legal consequence.
No one has even asked executives to speak under oath about why they didn’t make their system safer long before the many disasters of the last seven years. Peterman turns out to have had a major role in all this. Now an executive vice president and major representative for PG&E, she was not long ago one of the five state regulators who consistently neglected to hold utility executives responsible for their actions. Was this part of a plan or a deal?
From December 2012 until December 2018, Peterman was one of the virtually untouchable members of the California Public Utilities Commission, holding an appointive job from which she could not be fired, not even by the governor who put her there, Jerry Brown.
This sequence leads to questions about whose interests Peterman really pursued while a utility regulator — those of the mass of Californians who are utility customers or those of the utility company whose ranks she would later join. There could also be reasonable questions about whether her votes on the commission were motivated at least in part by promises of a high-paying future job.
No one but Peterman and the folks who put her where she now is can know for sure about that. However, if she had held a federal regulatory job with policy-making power similar to the post she occupied for six years, she at least could not have joined any company under her old job’s purview until five years after leaving the government post.
Peterman is not unique. A similar apparent conflict of interest was the case with Michael Peevey, a former president of SoCal Edison, for all 14 years that he was a PUC member, serving as its president most of that time before resigning in disgrace in 2014. Peevey was implicated in an apparent conspiracy with Edison executives over whether customers or the company would pay most costs of the Edison blunder that wrecked the San Onofre Nuclear Generating Station.
Peevey was first appointed a commissioner by Democratic Gov. Gray Davis, then reappointed by Republican Arnold Schwarzenegger and again by Democrat Brown. The Peevey conflict of interest was in the opposite sequence of Peterman’s, as he ruled repeatedly on rates for the company he formerly ran.
Meanwhile, the sequence for John Bryson was almost identical to Peterman’s. Bryson, a 1970s-era Brown appointee as commission president, became SoCal Edison’s president soon after his six years on the PUC were up, later becoming U.S. Secretary of Commerce under President Barack Obama.
These are just three examples of the kind of conflicts of interest spawned by a system in which the five PUC commissioners are essentially immune from public pressure during their terms. There has often been speculation about whether some had secret understandings with regulated companies involving high-paying positions in exchange for favors done.
What’s known right now is that as PG&E bills begin arriving in the mailboxes and on the computers of private individuals and businesses of all sizes, costs for everything from food to roofing to appliances will rise. Plus, the $34.50 rate hike itself will mean less food, less heat and less flexibility for myriad Californians.
If that’s not a loud call for state legislators to take action to preclude future conflicts of interest, it’s hard to see what could be.
Email Thomas Elias at tdelias@aol.com, and read more of his columns online at californiafocus.net.
Redwood Valley, Calif. — A 5.6 magnitude earthquake shook Northern California on Wednesday morning, according to the U.S. Geological Survey.
The quake was centered 7 miles north of Redwood Valley in Mendocino County, north of Ukiah, and east of Highway 101. It had a depth of 5.0 miles.
A ShakeAlert notification went off on many people’s phones moments before the earthquake hit at 8:10 a.m., initially forecasted as a 6.1 magnitude quake by the U.S. Geological Survey (USGS) and downgraded moments later.
People across Northern California felt the quake. Reports came in from as far away as Eureka, Redding, Sacramento, and the Bay Area. Most people reported light to moderate rolling and shaking.
Since the initial quake, several aftershocks have hit the same area. Three smaller quakes between 2.6-2.7 magnitude were detected in the same area between 8:17 a.m. and 9:06 a.m., and are expected to continue.
So far, there have not been any reports of major damage or injuries.
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California
DOJ charges 10 Southern California defendants in largest federal healthcare fraud crackdown in US history
Laura Ingraham: Fraudsters beware!
The Department of Justice announces the largest healthcare fraud takedown in U.S. history, charging 455 defendants across 45 states. They allegedly stole $6.5 billion from Medicare and Medicaid through wound care schemes and other fraudulent claims. Some funds were used for luxury homes and vehicles like a $135,000 Maserati.
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Federal authorities on Tuesday charged 10 Southern California defendants in a series of healthcare fraud schemes, including one case involving nearly $270 million in fraudulent Medi-Cal claims and another that allegedly defrauded Medicare out of approximately $27 million.
The charges were part of the Justice Department’s broader “2026 National Health Care Fraud Takedown,” which resulted in charges against 455 defendants nationwide in schemes involving more than $6.5 billion in alleged fraud.
Acting Attorney General Todd Blanche described the operation as “the greatest combined federal and state effort in combating healthcare fraud in history.”
“Fraudsters can no longer rip off American taxpayers,” Blanche said during a news conference announcing the initiative. “If you seek to harm or cheat Americans, we will find you, seize any assets and prosecute you to the fullest extent of the law.”
FBI ADDS 2 FUGITIVES TO ‘MOST WANTED FRAUDSTERS’ LIST AMID HISTORIC $6.5B HEALTHCARE TAKEDOWN: PATEL
Acting Attorney General Todd Blanche speaks during a news conference announcing what federal officials described as the largest healthcare fraud takedown in U.S. history, resulting in charges against 455 defendants nationwide. (Ken Cedeno / AFP via Getty Images)
In the Central District of California, federal prosecutors brought criminal charges against 10 defendants accused of defrauding government-funded healthcare programs or abusing their positions as medical professionals to illegally prescribe controlled substances.
The U.S. Attorney’s Office for the Central District of California said five individuals were arrested in the greater Los Angeles area for allegedly participating in a scheme that involved submitting nearly $270 million in fraudulent claims to Medi-Cal for expensive prescription drugs.
Among those charged was Christina Mareik, 61, also known as Christina Marie Sanchez Hernandez, of Whittier.
HOSPICE FRAUD USES STOLEN IDENTITIES FOR FAKE PATIENTS
The Justice Department announced charges against 10 Southern California defendants in connection with multiple healthcare fraud schemes. (Department of Justice)
Prosecutors allege Mareik helped facilitate fraudulent prescriptions that generated nearly $270 million in claims to Medi-Cal, which ultimately paid out more than $178 million.
According to prosecutors, the claims involved expensive drugs containing low-cost generic ingredients that were either not medically necessary or were never provided to the purported recipients.
Authorities said Mareik also sent thousands of fraudulent prescriptions to a co-conspirator and caused the submission of fraudulent prescriptions under her own name.
LOS ANGELES HOSPICE FRAUD REACHES BILLIONS AS MEDICARE PROVIDERS SCAM FEDERAL SYSTEM WITH FAKE COMPANIES
Federal prosecutors allege Southern California defendants participated in schemes that defrauded Medicare and Medi-Cal of hundreds of millions of dollars. (Department of Justice)
Mareik was arrested June 17 and charged with healthcare fraud.
The charges also include a San Fernando Valley man accused of operating hospice care companies that fraudulently billed Medicare approximately $27 million, according to prosecutors.
Prosecutors also charged Oren David Shachar, 59, of Van Nuys; Abraham Shin, 66, of Corona; and Jeannie Choi, 57, of Torrance.
The three defendants face a 16-count indictment alleging they conspired to defraud Medicare out of approximately $27 million.
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The charges include conspiracy to commit healthcare fraud, healthcare fraud, aggravated identity theft, monetary transactions involving criminally derived property exceeding $10,000, and violations of the Anti-Kickback Statute.
Fox News Digital’s Alexandra Koch contributed to this report.
The IPOs of SpaceX, OpenAI and Anthropic could deliver billions of dollars to California’s coffers.
We’ve seen this movie before.
In 2022, California recorded a nearly $100 billion surplus, saved just $10 billion in its rainy day fund and then spent the rest. Two years later, a $56 billion deficit loomed.
Now, with the state facing ongoing operating deficits of more than $10 billion, we’re back in familiar territory.
The coming IPO windfall is a rare second chance. But we’ll only benefit from it if we first fix the structural flaw that’s caused us to squander every previous boom — a budget reserve that isn’t built to hold what we put in it.
The stakes this time are higher than ever. The war in Iran raised recession risk, and the federal government is systematically dismantling the funding streams California has depended on for decades.
When Washington retreats, Sacramento has to choose: cut services, raise taxes or have enough saved to bridge the gap. Right now, we don’t have enough saved.
We’re not outside observers wringing our hands. We helped shape the fiscal architecture the state is now straining against, and we’re here to say: It needs to be rebuilt.
As California state controller, one of us campaigned alongside Gov. Arnold Schwarzenegger to pass Proposition 58 in 2004 — creating California’s first Budget Stabilization Account. The other authored the Assembly Constitutional Amendment that became Proposition 2 in 2014 — the stronger, harder-to-raid replacement that voters approved with 69% support.
California’s tax system is the envy of progressive states and the nightmare of budget directors. We tax the wealthy at high rates, capture enormous capital gains revenue in boom years and then discover — every single time — that the peak doesn’t last.
If California treats the IPO windfall from SpaceX, Anthropic and OpenAI as permanent revenue, our state would repeat exactly the mistake we made four years ago.
Gov. Gavin Newsom and Assemblymember Avelino Valencia have each proposed important reforms to strengthen the fund. First, they call for requiring the state to make deposits until the fund reaches 20% of the general fund total, rather than the current 10%. Second, they propose changing an arcane accounting rule that treats saving for future downturns as spending.
We see one additional opportunity to make the rainy day fund even stronger.
If we want a larger budget reserve, we have to do more than merely allow it — we need to require it. Proposition 58 taught us everything we need to know on this front: Between 2004 and 2014, with that proposition fund in place, only two deposits were made. If we want consistent deposits during the boom times, they can’t be optional.
These reforms should be a win-win for the California Legislature. A larger reserve is the most durable protection that public sector workers, social service recipients and education advocates have against the kind of emergency cuts that have repeatedly gutted programs during downturns.
It’s also the strongest argument against tax increases in a recession because you don’t need to raise taxes if you actually save during the booms.
Building a stronger rainy day fund isn’t the cautious choice. It’s the visionary one — the closest thing we have to investing in the next generation of Californians.
We built the last rainy day fund because we’d lived through the consequences of not having one. We’re making the same argument again, for the same reason except now the stakes are higher. This time, the federal backstop is weaker, and the next storm is closer than it looks.
Fix the fund this year. The next generation of Californians will thank us for it.
Mike Gatto served in the state Assembly between 2010 and 2016, and he authored the measure that created California’s current rainy day fund. Steve Westly served as state controller between 2003 and 2007, and he co-championed Proposition 58, California’s original rainy day fund. Westly chairs the 21st Century Alliance, a nonpartisan organization focused on solutions to the state’s most pressing challenges.
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