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Jun 20, 2001
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Published Thursday, July 26, 2001

Adviser to Davis under fire for stocks

Jones says consultant sold energy holdings at a profit after his hiring

By Andrew LaMar


SACRAMENTO -- A top consultant to Gov. Gray Davis bought more than $10,000 worth of stocks in two major energy companies in January and sold them weeks later for a profit after going to work for the governor, according to documents filed with the state.

The revelation was made public Wednesday by Secretary of State Bill Jones, a Republican who will attempt to unseat Davis in next year's gubernatorial election. Jones called on the U.S. Securities and Exchange Commission to investigate whether Vikram Budhraja is guilty of insider stock trading.

Jones alleged that Budhraja's stock trades are a violation of the state's conflict-of-interest law, and "it appears there may also be violations of federal laws against insider stock trading."

Budhraja has a three-year consulting contract with the state that will pay him as much as $6.2 million.

Jones' allegation drew a flat denial from the Davis administration. Spokesman Steve Maviglio said Budhraja, a former senior vice president for Southern California Edison, sold all his stock the day he began working for the state.

Maviglio said he was speaking for Budhraja, who refused to take calls from reporters.

"This is all politics," Maviglio said. "This is about a candidate who has had no traction trying to get his name in the paper. He shouldn't be doing it on the taxpayer dollar."

Budhraja interviewed with Davis on Jan. 25 and began working for the state Jan. 29, according to Maviglio. A contract between the state and Budhraja is dated Jan. 18, but Maviglio said the contract's starting date was set to the day California began buying power for two utility companies and did not correspond to when Budhraja actually began advising the governor.

Jones, one of two Republicans actively campaigning for governor, has attacked Davis relentlessly in recent weeks over hiring a cadre of consultants since the energy crisis broke without first ensuring the advisers did not have conflicts of interest.

Davis failed to ask many of his consultants to file conflict-of-interest forms until Jones made an issue out of it earlier this month. The administration then followed up July 19 by ordering all energy consultants to immediately sell any stocks they had in power companies or lose their jobs.

Barry Goode, the governor's legal affairs secretary, sent the request to 34 people, of whom nine had disclosed a financial interest in an energy firm.

Sources familiar with the Political Reform Act of 1974, which requires the statements, said the governor's delay in requesting them could be a violation of law.

"It creates the impression of something not quite kosher because people are skeptical of politicians," said Sherry Bebitch Jeffe, a political science expert with the University of Southern California.

"In a perfect world, he should have requested those statements up front. In the Capitol scheme of things, one would assume that someone in that office ought to have an understanding of that law."

Jones also has asked Attorney General Bill Lockyer and the Fair Political Practices Commission to examine whether the consultants had improper conflicts of interest while they helped Davis navigate out of California's energy crisis.

Maviglio said the administration is cooperating with investigators from the Attorney General's Office and the FPPC to get to the bottom of the matter.

"We're looking into any possible violations and they will be dealt with appropriately," Maviglio said.

But to Jones, the administration's effort is too little, too late. He accused Davis of evading the law by initially neglecting to require consultants to file the statements.

"Many people in California feel that we have been ripped off and cheated by energy gougers," Jones said. "Regrettably, Californians must now be concerned that the individuals they placed in positions of power and trust to assist California in its time of need have now become suspect."

Jones claimed Budhraja began advising Davis on Jan. 18, the day after the governor declared a state of emergency and started buying power for California's two largest utility companies.

A statement of economic interest filed by Budhraja indicates he bought more than $10,000 in Dynegy stock Jan. 11 and more than $10,000 in Edison International stock Jan. 17 and Jan. 22. The statement discloses that he sold the stocks Jan. 29, after stock prices for the two companies had risen significantly.

Dynegy's stock price increased 28 percent between Jan. 11 and Jan. 29 and Edison's stock went up 47 percent between Jan. 17 and Jan. 29.


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Mar 20, 2001
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Most likely this is a non-story.  Bill Jones is being lead around by the nose now that he's running for Governor and needs to grab some attention from Davis and Riordan.  

jerry d

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Mar 17, 2001
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Don't worry anymore, boys and girls!!! The Gov. is on the case!!!

Our good Gov. Davis has "FIRED" those slick 'ol boys that were stockholders of Calpine and at the same time negotiating power contracts for you and I with this power generator.

See how our governor protects your interest as soon as a problem is brought to his attention. By golly, now I'm sure nothing crooked went on here but it helps me sleep better at nite knowing the good Gov. is looking out for me, just in case.

Wait a minute - why didn't he check these 'ol boys out before he hired em?????? Probably just a simple little slip up, huh. Probably won't happen again, will it.........


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Mar 13, 2001
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Be Careful who you vote for. They might win.           Fubar


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Nov 7, 2001
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No jerry, you know it is just a case of him trying to cover his butt. After the horses got out of the corral though.
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