The California PUC Can Collect Millions in Fines Owed the State—Legislation Will Give Them Tools They Need

[courtesy of California Progress Report]

By Ted Lieu
Chair
California State Assembly Banking and Finance Committee

Last year, the State Controller audited the California Public Utilities Commission’s accounting and collection procedures and found that more than $32 million in fines and restitution have gone uncollected since 1999. This audit found that the CPUC did not aggressively pursue collection efforts and that a vast majority of the uncollected fines were levied against telecommunication companies that CPUC launched investigations or imposed fines for fraudulent or questionable activities. Those companies either ceased to operate or filed for bankruptcy immediately after the investigations had commenced.

At a time when California is dealing with a huge budget deficit that could cripple our state, we cannot afford to let utility companies get away without paying their fair share. It is not acceptable for these companies to skate any responsibility by declaring bankruptcy or simply closing shop.

These companies are simply calling it quits and walking away from fines and taxes owed to the state. We need to hold these companies accountable and make them take responsibility for their part in our budget problems. They cannot simply walk away from their debts and wash their hands clean of these charges of fraudulent and questionable activities.

For these reasons, I introduced AB 2578, which would improve the State’s ability to collect fines and restitution from public utilities and common carriers by:

• Allowing the CPUC to collect fines and restitution directly from the individuals who engaged in fraudulent or malicious activities, regardless of whether or not their company filed for bankruptcy.
• Granting the CPUC judgment creditor status so that they can enforce without needing to get a court order.
• Requiring companies to demonstrate their ability to pay fines and restitution.

AB 2578 will give the tools necessary for the CPUC to hold these companies and individuals responsible, and help provide needed funds during this budget crisis.

Ted Lieu is the Chair of the California Assembly Banking and Finance Committee, and represents the 53rd Assembly District, which encompasses the Southern Coastal region of Los Angeles County.