Mediator Received Confidential Information About PG&E Negotiations, Critics Say

City leaders and others today continued their public rebuke of the CPUC by urging the former U.S. senator who was brought on to mediate the PG&E penalty negotiations to withdraw from his appointment.

The city of San Bruno, city and county of San Francisco and consumer advocates sent a letter to former Sen. George Mitchell and his law firm, DLA Piper, saying they had a significant conflict of interest in the negotiations. The letter also expressed disappointment that DLA Piper received confidential information about the case before being contacted by the California Public Utilities Commission.

“Your receipt of such highly sensitive confidential information was a breach of the Confidentiality Agreement…(that) provided that none of the contents of the settlement discussions was to be disclosed to any person outside the negotiations “without the consent ofall Parties,” the letter stated. “Consequently, you should neither have been offered, nor should you have accepted, any information from any party regarding the negotiation positions of the parties.”  Furthermore, ….you should not accept any additional information from any party that relates to any of the confidential settlement discussions…”

The letter concluded, “[F]or the sake of promoting public confidence in the fairness of these proceedings, we respectfully call on DLA Piper to decline to serve….”

The CPUC recently suspended hearings that were supposed to determine whether PG&E would get penalized for record-keeping mistakes and other deficiencies that led up to the 2010 San Bruno pipeline explosion.

The CPUC then suddenly appointed Mitchell and his law firm to help move the negotiations along.

Crtics have blasted both decisions as catering to PG&E's desires.

Mayor Jim Ruane said in a statement that DLA Piper’s conflict and receipt of confidential information “automatically eliminates them as an unbiased party in mediating a settlement fair to the people and City of San Bruno.” 

“Representation of a client whose financial interests will be impacted by the outcome of the mediation is incompatible with DLA Piper’s duty of impartiality,” Ruane said. “Because DLA Piper represents a large insurance carrier that may end up paying costs incurred by PG&E related to the San Bruno explosion, there is an obvious conflict that prevents DPA Piper and Sen. Mitchell from serving.”

The Utility Reform Network and the CPUC’s Division of Ratepayer Advocates have also joined San Bruno and San Francisco leaders to call for Mitchell to step aside.

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