UC struggled with Peevey party funds -- Dean of public policy school felt loyalty to utilities boss

Union Tribune (2015-03-26) Jeff Mc Donald

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UC struggled with Peevey party funds

Dean of public policy school felt loyalty to utilities boss

By Jeff McDonald5:49 p.m.March 26, 2015

Related: CPUC judge on Peevey: 'This was inevitable'

Days before he stepped down as the state’s top utility regulator, Michael Peevey called an assistant dean at his alma mater, the University of California, Berkeley, to say that a recognition dinner was being held in his honor, and net proceeds would benefit the Goldman School of Public Policy.

“Mike asks that you join the host committee,” assistant dean Annette Doornbos wrote to her boss, Dean Henry Brady, on Dec. 15. “He would like to know at your earliest convenience.”

The request appears on the first of 327 pages of emails to and from university officials related to the $250-a-plate tribute dinner that was held Feb. 12 at the Julia Morgan Ballroom in San Francisco.

The records show the school struggled with how to react to a barrage of criticism from alumni and supporters, who urged Brady to reject the donations as a public-corruption investigation encircled the utilities commission in general and Peevey specifically.

The university’s emails were obtained by the San Diego advocacy group Citizens Oversight, which sued the school earlier this month claiming that officials had failed to release documents in response to several requests under the California Public Records Act.

They show Brady and others defending their decision to honor Peevey, who not only graduated from the institution but was an important donor and longtime advisory board member.

In an email to one of the school’s strategic communications experts two days before the dinner, Doornbos described what Peevey and his wife, state Sen. Carol Liu, meant to the organization.

“Peevey has been on our board of advisors for six-plus years,” she wrote. “He and Senator Liu are both significant donors to UCB and the Goldman School (they each have a named chair in Economics and GSE respectively).”

The toast to Peevey by industry insiders and stakeholders — whose relationships with Peevey were under scrutiny by criminal investigators — was first reported by U-T San Diego in late January. The story was picked up by Northern California newspapers and wire services days before the tribute. By the day of the event, the school was being inundated with protests.

“You should be ashamed by any association with this individual,” says one email, signed by F.K. Holtzman. “Your sponsoring a dinner for him is totally unacceptable and you should be personally mortified by his actions.”

The dean responded to many of the complaints with a reply that included statements from the event’s organizers, former utilities commissioner Susan Kennedy and public relations professional Don Solem. Both statements said the school did not organize the dinner but was merely designated to receive net proceeds.

Holtzman replied to Brady: “Absolute total nonsense, and you know it.”

State Sen. Jerry Hill, D-San Mateo, wrote to Brady hours before the dinner, as an alumnus, imploring the dean to dissociate himself from Peevey’s party. Brady replied with the same response he gave to other graduates, and was not going to elaborate.

“I have no intention of replying to Sen. Hill,” Brady emailed the university’s government-relations director. “I do not want to get into a battle with him in any way (and anything I send him will be put out on the web).”

Brady turned down multiple interview requests from the media, steering questions to the event organizers. Hours before the dinner, he signed a mass email to faculty and staff trying to assuage their concerns.

“There are lots of misconceptions and false rumors about tonight’s Mike Peevey event,” Brady wrote in the open letter, which explained again that the school was only a beneficiary, not an organizer, of the event.

Outside the Julia Morgan Ballroom, protesters set up a microphone and camera, drawing plenty of media attention.

“Crooks honoring crooks,” one man yelled repeatedly.

The anger did not die down afterward.

“I continue to get irate emails,” Brady wrote to Vice Chancellor Claire Holmes the next day.

On Feb. 14, Brady wrote to a colleague, “Michael Peevey has in fact accomplished a great deal and he is the kind of successful public servant that we hope our students become.”

That same weekend, David Gamson, the chief administrative law judge for the utilities commission, wrote Brady a lengthy note laying out his concerns as a graduate about the way Peevey managed the commission.

“Never a humble man, Mr. Peevey in my opinion grew arrogant over time and saw his role more as ‘benevolent dictator’ than as consensus builder,” Gamson wrote. “This is a recipe for corruption and not surprisingly led to a disregard of fair process, a lack of concern of public perception, a cast of sycophants and an air of untouchability.”

He went on to suggest Brady reject the proceeds from the Peevey gala.

“I was taught to ‘speak truth to power.’ I have tried to do so in my career; it is difficult, and I have not always succeeded," Gamson wrote. "This is an opportunity for the Goldman School to ‘speak truth to power.’ It will be difficult, but you must succeed for the good of the institution.”

On Feb. 17, the San Francisco Chronicle published an editorial criticizing UC’s acceptance of the money as “worse than inexplicable,” and even more complaints tumbled into the school.

“Please get me Michael Peevey’s phone number as fast as possible,” Brady wrote to two assistants the morning it was published.

That evening, Assistant Vice Chancellor Irene Kim wrote to Brady, “As you have probably already heard, Government Affairs asked for our guidance regarding the gift aspect. We advised them that there is no precedent for declining or returning funds in this kinds of situation.”

The next day, Brady wrote to his assistant that newspaper editorials had misrepresented the dinner and the facts, and they should let the issue fade on its own.

“Our best course of action is to simply grin and bear it and leave it the way it is,” he wrote. “My guess is that most of the storm has passed.”

Later that day, Brady wrote to Kim in an email he labeled “confidential.”

“The crucial fact is that we were the victim of events that developed very quickly so that I had to make decisions about whether to abandon a longtime supporter of the school and Cal or to join a chorus of self-righteous indignation about him,” the dean wrote. “I chose loyalty over self-serving indignation. I think that was the right choice given that Peevey is only under investigation. I think our trustees and friends should know that we will not just cut and run on them.”

One person to contact Brady identified himself as a UC graduate and former employee of Pacific Gas & Electric, the company whose under-maintained pipeline exploded in San Bruno in 2010 and killed eight people.

“Peevey and PG&E have violated the public trust and aided in the continued erosion of the public’s faith in regulatory oversight,” David Lewbin wrote. “This neither deserves ‘honoring’ or leveraging for fundraising.”

U-T San Diego on Feb. 24 reported about a disclosure report saying more than $55,000 had been raised at the dinner in the name of commission President Michael Picker.

“This story does not seem to die,” Brady wrote to a university spokesman.

By late February, Brady began hearing from other members of the school’s advisory board. He laid out various options in a memo to Executive Vice Chancellor Claude Steele. In early March, Brady spoke with Peevey, and the commissioner decided to quit his role on the advisory board.

“I have truly enjoyed my time with the Goldman School,” Peevey wrote to Brady on March 10. “This sorry episode has led me to question my value to the school going forward. Hence, I am resigning from the board, effective immediately, a decision I know you support.”

Six days later, school officials let U-T San Diego know about the resignation, and said they would not be accepting "a single penny from the event in question."

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