News Intelligence Analysis
Updates on the Governor-Elect
Arnold to Settle Lawsuits for Pennies on the Dollar?
Reported by Katherine
Yurica
On October 12, 2003 the Yurica Report posted what we considered to be one of the most important pieces of information for the people of California today. Faced with huge deficits and the prospects of the California economy going further south, the Governor-elect announced through his aides that he intends to settle lawsuits filed by Governor Davis and Cruz Bustamante against the companies that cost California citizens over $71 billion. The object of the suits is to regain the $9 billion in profits that were taken from the people of California. Mr. Schwarzenegger intends to settle these suits. Had the people of California been given this information in time, would they have placed this man in a position of power. Evidence is mounting that Schwarzenegger has adopted the deregulation system of Ken Lay and Enron that was so easily and fraudulently manipulated. Also note that Mr. Schwarzenegger plans to amend the code section that requires companies to repay their illegal profits.
[Editor's note: The original October 12, 2003 article has been edited slightly to reflect several word changes for clarification purposes.]
The Yurica Report has learned that only three days after Mr.
Schwarzenegger won his victory in California, an aide announced
that the governor-elect intends to settle pending energy fraud
lawsuits. This apparently includes the suit filed by Cruz Bustamante
under the California statute, Civil Code section 17200, of the Unfair Practices Act.* The purpose
of the act “is to safeguard the public against the creation
or perpetuation of monopolies and to foster and encourage competition”
the Act expressly prohibits, “unfair, dishonest, deceptive,
destructive, fraudulent and discriminatory practices by which
fair and honest competition is destroyed or prevented.”
According to news talk show host Bernie Ward of KGO radio, San
Francisco, who reported the story Friday night on his radio show,
(October 10th), Schwarzenegger's aid stated that the governor-elect's
administration did not want to be saddled with someone else's
lawsuits. The Unfair Practices Act, however, has provisions that
require businesses who profit from unfair practices to pay the
victims those profits. Although the Act does not authorize recovery
of damages in a representative action, according to Hiliary
N. Rowen, an attorney from the law firm of Thelen Reid &
Priest, “the plaintiff—who need not have been harmed
by the challenged conduct—may seek injunctive and restitutionary
relief, including the disgorgement of profits on behalf of all
those injured.” (See
Hiliary Rowen's article).This provision would make the power
companies, who profited an estimated $9 billion from the California
energy scam, the losers.
In the meantime, Claire Cooper of the Sacramento
Bee reported Friday on another lawsuit in the Federal
Court. She reported the judges from the 9th U.S. Circuit Court
of Appeals seemed skeptical of the Federal Energy Regulatory
Commission's (FERC) “ contention that it acted legally three
years ago, when it relied on competition among energy wholesalers
to determine the cost of California's power supply and did not
require them to file the rates they would charge.” California
sued FERC, claiming it is due a refund of $9 billion in gouged
profits because the Federal Power Act didn't authorize FERC to
approve a fluctuating marketbased rate structure. The question
is, does the governor-elect intend to settle the federal suit
also?
Mr. Schwarzenegger's announcement to settle the lawsuits comes
on the heels of an article written on the eve of the election
by investigative reporter Greg Palast. Palast, whose reports
appear on BBC television's Newsnight, said that the Los Angeles
based Foundation for Taxpayer and Consumer Rights uncovered Enron
internal memos regarding Mr. Schwarzenegger's secret meeting
in May 2001 with Kenneth Lay, the former CEO of Enron. The intent
of the power company, according to Palast, was to sabotage the
Davis-Bustamante plan to win back the $9 billion dollars in illegal
profits earned by power moguls. The plan has worked so far. Clearly
Mr. Schwarzenegger should be questioned about his agenda.
*Editors Note Posted October 19, 2003: Mr. Schwarzenegegger plans to amend Civil Code section 17200 as recorded in his agenda.
Katherine Yurica was educated at East Los Angeles College, U.S.C. and the USC school of law. She worked as a consultant for Los Angeles County and as a news correspondent for Christianity Today plus as a freelance investigative reporter. She is the author of three books. She is also the publisher of the Yurica Report.
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