fw 5 state energy advisors fired conflicts ethics consultants involved buying electricity california generator whose stock owned setting clash official duties personal interests names 5 people fired disclosed 5 state energy advisors fired conflicts ethics consultants involved buying electricity california generator whose stock owned setting clash official duties personal interests jeffrey l rabin daryl kelley rich connell times staff writers 07 28 2001 los angeles times home edition 1 copyright 2001 times mirror company davis administration stung charges excessive secrecy disclosed late friday fired five energy consultants conflicts interest involving official duties personal finances sixth consultant hired help california purchase electricity quit according state records involved purchasing electricity state generator whose stock owned addition top lawyer agency buying power removed position concern way issue potential conflicts handled top advisors gov gray davis told times learned conflicts last week belatedly asking consultants file required economic disclosure statements review documents included stock holdings showed consultants may crossed line said governor senior advisor nancy mcfadden state law prohibits officials participating decisions involving personal financial interests although portraying seriously concerned conflicts could undermine public confidence governor required influential private sector advisors file kind disclosure statements led firings among two wall street veterans influential promoting governor energy rescue plan includes largest state bond sale u history new york firms employ executives joseph fichera michael hoffman paid 275 000 month among things help pitch 12 5 billion bond issue wall street analysts state lawmakers companies stand make additional 14 million state goes purchase utility transmission lines davis contends fichera hoffman associates fall separate category advisor beyond reach state political reform laws critics question distinction governor approach may convenient said jim knox executive director watchdog group california common cause ignores law disclosure crucial public needs know decisions made people conflict interest knox said trying evade law creative use semantics ought firings disclosed friday unlikely diminish criticism surrounding 50 consultants advisors hastily hired administration rushed power trading business year 25 million spent state consultants according state records process seemingly little attention paid routine government ethics laws took six months state officials direct consultants file even basic disclosures personal finances including investments state political reform act normally requires forms filed publicly within 30 days starting work state agencies even hastily ordered disclosures made public thus far circumstances stock transactions remain mystery key information omitted consultants example failed state bought energy stocks one pressing hardest investigation possible conflict interest violations insider trading secretary state bill jones republican hopes challenge davis next year jones accused governor conscious policy secrecy enforcing compliance public disclosure laws week jones called federal securities exchange commission probe stock purchases state energy consultants 4 traders owned shares calpine four traders removed week owned shares calpine corp san jose based power generator landed largest share 43 billion long term state power contracts investments ranged several thousand dollars 100 000 records show working state department water resources officials said bought undetermined amounts calpine power state behalf 14 million worth electricity purchased state calpine first quarter year according recent records available want making governmental decisions holding stocks governor legal affairs secretary barry goode said interview highest ranking consultant removed richard ferreira hired 500 000 contract january assist obtaining bids long term power negotiating contracts records show former assistant general manager sacramento municipal utility district ferreira paid 200 hour state disclosed owning much 10 000 calpine stock officials discovered participated review one company contracts ferreira could reached comment governor office identified four traders william f mead herman leung constantine louie peggy cheng could reached friday times formerly worked energy schedulers power exchange defunct energy market similar stock exchange created early days california electricity deregulation hired state february march four signed temporary contracts calling maximum payments 15 000 21 000 month including living expenses sacramento flights home southern california mead 55 former edison engineer said state officials never warned owning energy stock problem demanded sell stock week ago said bought nearly shares 2 1 2 years ago 12 000 saw value skyrocket stock split three times doubling value time mead said called head state energy buying team thursday fired asked directly stock give answer mead said said services terminated came away home living hotel room trying keep lights trying get state crisis get finger pointed sort criminal guess politics pawns administration officials said also examining actions traders including one bought calpine stock beginning work state trader elaine griffin also came power exchange left state power buying operation july 14 three days disclosing energy industry investment griffin governor office said obtained another job could reached comment griffin reported purchasing 10 000 100 000 calpine stock feb 1 final days working electricity exchange days later calpine signed announced 4 6 billion 10 year deal sell power department water resources feb 20 griffin joined state power buying agency state calpine finalizing additional 8 3 billion power contracts one 20 year deal signed feb 27 longest state awarded calpine 13 billion contracts supply power 20 years addition state consultants bought calpine stock two others reported owning stock texas based power marketing giant enron corp two bought stock southern california edison faltering utility davis committed saving bankruptcy another consultant bought stock reliant energy houston large power plant operator bought several california plants utilities deregulation bernard barretto energy trader buys energy daily spot market said interview bought 2 000 enron stock shortly began work state feb 28 purchase enron stock defended see conflict said time really dealing enron still bought enron barretto said never considered enron ownership possible conflict received notice july 18 sell stocks noon lose job notice came goode governor lawyer expect always expected state consultants uphold highest ethical standards wrote standard met hold financial interest one energy companies trading behalf state energy related matters therefore consultant holds interest energy company must divest interest noon today refuses state sever contract person however governor office taken distinctly different stance closest financial advisors fichera hoffman davis aides cite opinion sought last week attorney raquelle de la rocha former member los angeles ethics commission state fair political practices commission concluded advisors file disclosure statements contractors consultants working less year limited range projects fichera davis point man governor energy rescue plan including unprecedented bond sale pitched plan lawmakers reporters wall street financial community fichera refused comment record fichera hoffman companies saber partners blackstone group prepared controversial analysis helped underpin legislative approval bond measure intended pay past future power buying pact specifies financial advice state contract fichera hoffman firms calls provide financial advisory services state decision require public disclosure financial holdings stands sharp contrast approach taken montague derose associates consulting firm hired 1 8 million contract like two firms hired provide financial advisory services state firm top advisor douglas montague required administration fill disclosure statement reported power company interests governor legal advisors said difference montague longer contract photo barry goode governor legal affairs secretary copyright 2000 dow jones company inc rights reserved