The FBI said that Sempra may have violated the Foreign Corrupt Practices Act to get this liquid natural gas plant built near Ensenada.
  • The FBI said that Sempra may have violated the Foreign Corrupt Practices Act to get this liquid natural gas plant built near Ensenada.
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Bonnie Dumanis

Every time local media report that District Attorney Bonnie Dumanis got $200,000 in subterranean money, plus gifts, from Mexican tycoon José Susumo Azano Matsura, Dumanis’s election opponent, local attorney Robert Brewer, steps up his attacks on her.

Robert Brewer

But very few San Diegans know that it was Brewer who suggested, three years ago, that the United States government pursue Azano. Brewer was representing Sempra Energy, the parent of San Diego Gas & Electric. In early 2011, the Federal Bureau of Investigation concluded that there was sufficient evidence that “Sempra and its business executives may have engaged in criminal activity so as to justify the opening of a full investigation into possible violations of the Foreign Corrupt Practices Act,” according to documents that San Diego attorney Gary Aguirre got from the federal government through the Freedom of Information Act.

José Susumo Azano Matsura

Gary Aguirre

Former Sempra accountant Rodolfo Michelon had filed a whistle-blower complaint. Among many things, he charged that Sempra had set up a multimillion-dollar trust in Ensenada, built an expensive fire station in Tijuana that was quickly abandoned, and passed $100 bills to the governor of Baja California — all for the purpose of greasing the skids to build a liquefied natural gas plant near Ensenada. After complaining internally about these practices, Michelon had been fired. So he filed whistle-blower complaints with the federal government. Ultimately, he was rebuffed. Now, Aguirre and attorney Dan Gilleon represent him as he tries again.

Dan Gilleon

Eugenio Elorduy Walther was governor of Baja in 2003. At the time, Marathon Oil was well ahead of companies wanting to build a natural gas plant there. Suddenly, around the time that Sempra wanted to build farther south, Baja condemned Marathon’s property. Marathon hired the prestigious law firm of Boies, Schiller & Flexner to investigate. The firm hired an international investigative operation, Interfor, to probe the activity. Interfor found that Elorduy had bank accounts in offshore havens: the Cayman Islands and Switzerland. Further, “Governor Elorduy has also been linked to giving preferential treatment to Sempra Energy,” said Interfor.

In response to the federal investigation, Sempra hired two outside law firms, allegedly to look into the matter. One of those firms was the San Diego office of Jones Day. That’s how Brewer, a partner in that office, got to be working for Sempra.

In early 2011, representatives of the Federal Bureau of Investigation and Securities and Exchange Commission, Michelon, Brewer, and others held meetings about Sempra’s possible bribery escapades in Mexico.

According to the redacted documents Aguirre received, the critical meeting was on February 16, 2011. One attendee said the FBI should investigate two individuals he believed were culpable. One of them had an arrangement to get 55 percent of monies that Sempra might pay to settle a dispute over the property near Ensenada. That had to be Azano: in a civil suit filed last year, Sempra complained that Azano had an arrangement to get a 55 percent cut of whatever Sempra might be forced to pay.

But who at that meeting pointed the finger at Azano? The finger-pointer “couldn’t have been anybody other than Bob Brewer,” says Gilleon, who was Michelon’s only lawyer at the time.

Charles La Bella

One of the key government attendees at the meeting was Charles La Bella, a former United States attorney in San Diego and the senior Department of Justice attorney at the meeting. La Bella had also been a partner at a law firm with Robert Brewer.

According to Aguirre, the federal government closed Michelon’s first complaint and did “little, if any,” field investigation. Jones Day, Sempra’s law firm, “selected and screened virtually all evidence” considered by the Federal Bureau of Investigation and Securities and Exchange Commission. “Neither agency carried out an independent investigation of the allegations,” says Aguirre in the second whistle-blower complaint he has filed to get the government to reopen the Michelon matter. It appears the securities agency is, indeed, reopening the case.

I went to Brewer with a list of questions. He deferred most of them to Sempra, which came back with a brief statement saying that Michelon’s allegations were false. “The company cooperated fully with the government, provided documents, and made employees available for interviews,” said Sempra. The statement seems to suggest that the government did some of its own work, although Sempra’s words could be interpreted another way. Who interviewed the employees and looked at documents? The government? Or Jones Day?

At the time, the Washington Post wrote a story on the incident, noting it could not find a lick of evidence that the government did any investigating of its own. In November of 2010, Aguirre attended a conference of securities attorneys in New York. The head of the enforcement division of the Securities and Exchange Commission said that when it received a whistle-blower complaint, it would have the company do an internal investigation. If the agency felt the internal investigation had been “thorough and complete and honest and candid, the likelihood of us independently conducting that review is lessened.” In short, companies can have their own law firm investigate them.

Indeed, in 2001 and 2010, the securities agency announced initiatives that would give great latitude to a company investigating itself. Highly respected financial journalists such as Gretchen Morgenson of the New York Times and Christopher Matthews of the Wall Street Journal have written articles criticizing the federal government for permitting companies to investigate themselves.

Aguirre says this isn’t the first time a federal agency didn’t do its own investigation of Sempra. In another case, in 2009, one Securities and Exchange Commission official said to another, “Okay, I’m just a little concerned that we are just relying on what [Sempra’s counsel] tells us.”

The American Bar Association’s canon of ethics states, “The lawyer owes entire devotion to the interest of the client.” So how can a law firm hired by a company under investigation do anything but exonerate its own client?

Brewer did respond to one critical question. I asked him about the government’s practice of not investigating some charges but rather permitting companies to hire a law firm to probe their own potential wrongdoing. Said Brewer, “I am unaware of any governmental agency outsourcing criminal or civil investigations to law firms hired by the entity being investigated.”

Hmmm. I have always had very serious questions about Bonnie Dumanis. Now I have questions about Robert Brewer.

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Comments

aardvark March 12, 2014 @ 10:57 a.m.

And I was all set to vote for Brewer, if for no other reason than to get Dumanis off of her throne...

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Don Bauder March 12, 2014 @ 11:20 a.m.

aardvark: Brewer has to answer some questions. Ditto Sempra. Let's hope the federal investigation into Sempra's possible violations of the Federal Corrupt Practices Act is reopened...and investigated thoroughly by the government, not by a law firm hired by Sempra. Best, Don Bauder

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aardvark March 12, 2014 @ 12:14 p.m.

Don: The bad part of all this is the other person who has expressed a desire to run for DA doesn't have that much name recognition (which is shown by the fact that I don't know her name off the top of my head), which probably means that Bonnie stays on her throne for another 4 years.

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Don Bauder March 12, 2014 @ 12:34 p.m.

aardvark: Dumanis has been a thoroughly political DA -- the kind of DA that is least desirable. The big question about Brewer is this: Is he Sempra's candidate for the post? It's probable, and if so, that would be disastrous. Best, Don Bauder

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alexroth March 13, 2014 @ 5:35 p.m.

I'm on my 25th reading of this article and still can't figure out what the point is. As communications director for Brewer's campaign, I'm wondering if Don Bauder is truly suggesting that Brewer, with a snap of the fingers, somehow has the power to control the entire U.S. Department of Justice. Also, to the extent anybody made the feds aware of Azano's activities, shouldn't that person be commended? After all, given the federal complaint that was filed recently, looks like the feds should have been looking into Azano a long time ago. Don Bauder wouldn't be able to stub his toe without becoming convinced that it was all the result of a giant conspiracy involving shady, powerful people. I'm gonna cross my fingers, read the piece for a 26th time and hope I finally figure out what exactly Bauder's trying to say here. Wish me luck.

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Don Bauder March 13, 2014 @ 8:31 p.m.

alexroth: I would not expect Brewer's campaign manager to admit he understands what the point is. Both you and Brewer should learn more about how U.S. government agencies often permit companies to hire a law firm to investigate themselves. This story was greatly about Sempra, and about the SEC and the DOJ, as well as about your client. Maybe you will get it on 35th reading. Best, Don Bauder

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GhostofJDavid March 12, 2014 @ 4:46 p.m.

I'm shocked-- SHOCKED-- (in the "Casablanca" sense of the word) that Sempra would send a white-collar criminal defense attorney down to Baja to clean up its trail of bribery and corruption. Who better than Nancy Hoover Hunter's defense attorney? Architect of the "I'm-Just-A-Dumb-Blonde" defense. How that guy kept a straight a face in the court room is beyond me.

I wouldn't blame rank-and-file federal officers for their unusual stand down on the case. Sempra's tentacles bypass the bureaucracy. Simply put: Sempra buys and trains elected officials to do their bidding as we witnessed with SDG&E's Sunrise Powerlink: Arnold Schwarzenegger. Jerry Sanders. Dianne Feinstein. Ron Roberts. Cheryl Cox. Ben Hueso. Shills all of them.

The administrative law judge and the CPUC Commissioner assigned to the Sunrise project concluded that the line wasn't needed and posed a huge fire risk. None the above idiots even read the draft decisions. They kept their mouths shut and did exactly as Sempra paid them to do. Schwarzenegger essentially ordered his appointees on the CPUC to greenlight the needless line. Now it runs right through the footprint of the 2003 Cedar Fire carrying electrons produced by LNG from Sempra's Baja terminal. CalFire planes can make water drops over the energized line but Sempra profits are just fine. That's how things go in San Diego.

Good to know ahead of time that the guy who wants to be DA appears to be a Sempra shill too.

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Don Bauder March 12, 2014 @ 7:15 p.m.

GhostofJDavid: Yes, Brewer represented Nancy Hoover Hunter, now Nancy Fletcher. Yes, she used the dumb blonde defense, but Gay Hugo-Martinez, the prosecutor, has always said Hoover was no dumb blonde-- in fact, has qualities that she should teach all women.

Hoover Hunter Fletcher was sentenced to 10 years but got out after two years. She tearfully admitted that she had lied under oath when she said she had not thrown canceled checks in the fireplace, and, crucially, had not knowingly invented false monthly returns for Dominelli's investors. In short, she was in on the Ponzi scheme. I never knew why she was let off after that admission; she should have gotten more time.

As to Sempra, your analysis is right on the money. The company continues to get away with its multifarious plots to filch money from ratepayers and send it to shareholders with the blessings of the CPUC. Best, Don Bauder

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danfogel March 12, 2014 @ 7:52 p.m.

I thought she served three yrs, or close to it. Anyway, I believe the reason she never got more time was because a couple of yrs after her conviction, she agreed to testify against Ted Pulaski and the reduced sentence from 10 to 6 1/2 was part of the deal as long as she admitted lying during her own trial. Ironic since Pulaski's trial ended in a hung jury and US attorney decided against a retrial. Hard to believe that the whole JDavid thing was almost 30 yrs ago.

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Don Bauder March 12, 2014 @ 8:50 p.m.

danfogel: Yes, the reason given for her early dismissal was that she was to testify against Ted Pulaski. I assume she did so (I had other fish to fry at that point), but apparently her testimony carried little weight, because Pulaski got off. Yes, the J. David Ponzi scheme began hitting the headlines in 1984, almost 30 years ago. Best, Don Bauder

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danfogel March 12, 2014 @ 9:24 p.m.

My wife and I were living at her aunt's house in La Jolla in her guest house during this time. My wife's aunt knew her personally and she and her partner had invested with Dominelli. I don't know the intimate details, but I'm sure it was in the thousands. She was PFW, so I'm sure it didn't hurt her finances much, but I know that it pissed her off to no end that someone she thought of as a friend at one time screwed her without so much as as a kiss. Generally speaking my wife's aunt was a pretty mellow woman and pretty much never held a grudge that I can remember.I think in this case it was the principal more than the money and she pretty much held that grudge the rest of her life.

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Don Bauder March 12, 2014 @ 10:26 p.m.

danfogel: I don't know your aunt's name, but I may well have interviewed her, or at least tried to. Every scam I have covered (in the hundreds now) manifests the same pattern: initially, the victims refuse to believe they have been had. They blame the press and prosecutors for ending their Golconda. Later, many of them admit they were fleeced, and open up. Some never accept it. Best, Don Bauder

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MURPHYJUNK March 13, 2014 @ 8:47 a.m.

the plan to delete old city emails won't happen soon enough for Bonnie

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Don Bauder March 13, 2014 @ 10:14 a.m.

Murphyjunk: Yes, Bonnie is salivating over the prospect. So is Goldsmith. So are Gloria and Faulconer. Best, Don Bauder

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MrsKramer March 20, 2014 @ 11:03 p.m.

FYI, The third candidate for San Diego District Attorney is Terri Wyatt. I don't know much about her, but do see from her site that the Honorable Judge Victor Rimerez (retired) appears to have good things to say of her. I respect his opinion. http://terriwyattforda.com/2014/node/2

Speaking of endorsements, Bonnie Dumanis appears to be handing them out all over the county and racking up quite a few for herself. I think that's great.

All I have to do is look on a candidate's website to see if they are proudly displaying the Dumanis endorsement, or look on her website to see if a candidate is endorsing her. If they are, then I know its probably wise to vote for the other person running for same office.

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Don Bauder March 31, 2014 @ 8:51 p.m.

PUBLICATION SAYS DUMANS CLAIMS ARE ABSURD. The publication PublicCEO today (March 31) argued that District Attorney Bonnie Dumanis's claim that she knew nothing about illegal campaign contributions by Ernesto Encinitas, who has pleaded guilty to charges of conspiring with a foreign national to get $200,000 in campaign contributions.

Dumanis's claim "is nearly impossible to square with reality," says the publication, particularly since Encinas pleaded guilty to taking money from Mexican national Susumo Azano. Best, Don Bauder

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Burwell March 31, 2014 @ 10 p.m.

I think Dumanis is going to be indicted. She had to know the money was dirty. She might be better off at this point just retiring and locking her pension in before she does the perp walk. She may be facing three hots and a cot at Lompoc for a very long time. Dumanis is washed up.

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