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Michael Hiltzik: Of initiative politics and corporate flapdoodle

June 12, 2010 |  8:28 pm

Only occasionally do a company's customers get the opportunity to sound off about the company's goods or services in a way that counts.

As my Sunday column reports, one such opportunity came in Tuesday's election, when Pacific Gas & Electric Co.'s claim to the respect and loyalty of its ratepayers was put to the test. The subject was Proposition 16, the Trojan horse placed on the ballot by PG&E in an attempt to cripple the competition it faced from public power agencies.

PG&E claims in its PR material to be sedulously devoted to ethical standards as "the foundation of a successful business." In presentations to securities analysts, it lists "delighted customers" among its goals, and states among its values that it will "act with integrity and communicate honestly and openly."

How does that square with the Proposition 16 campaign, in which PG&E concealed its involvement as best it could and spent $46 million raised from ratepayers on a nakedly dishonest television campaign? Let's see what the ratepayers thought: In the counties within PG&E's service area, Proposition 16 lost by margins of up to 40 points.

Far from being "delighted," PG&E's customers apparently hate this company. On the evidence of its behavior in the election, they're entirely justified.

Such is the legacy of Peter Darbee, its chairman. Is there a corporate executive in America who has proven himself or herself less qualified to run a customer-based business? If you have a candidate, feel free to send the name along.

PG&E -- and Mercury Insurance, which promoted a similarly self-serving Proposition 17 -- set out to subvert citizen democracy. Darbee told analysts during the campaign that the company would mend the fences broken by its Proposition 16 campaign after the election. Let's hope that its customers and the regulators at the Public Utilities Commission don't make the process too easy.

The column starts below.

We may finally have discovered a remedy for corporate executives with more greed than brains: Let them invest corporate funds by the millions in California ballot initiatives, then vote the things down.

Isn’t that the lesson of Tuesday’s balloting on Propositions 16 and 17, those majestically cynical initiatives sponsored by Pacific Gas & Electric Co. and Mercury Insurance Group?

To recap for the 82% of eligible voters statewide who didn’t bother to vote last week, Proposition 16 was an initiative concocted by PG&E, the state’s biggest private utility, to hamstring the public power agencies that are its chief competitors — pretty much its only competitors. Of the $46 million in cash contributions raised to pass the initiative, $46 million, or 100%, came from PG&E.

Proposition 17 was an initiative concocted by Mercury to undermine the insurance consumer protection system put into place by Proposition 103 of 1988. Of the $13.56 million in cash raised to promote Prop. 17, $13.5 million came from Mercury, whose founder and chairman, George Joseph, has turned the punching of holes in Prop. 103 into a personal obsession. That spending may make Mercury a cheapskate by PG&E standards, but by any rational standard of democratic process, the scale of it was obscene.

Yet these initiatives went down in defeat by almost identical margins, losing about 52%-48%.

Read the whole column.

-Michael Hiltzik

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