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David Peffer, who informed the board of Utllity Consumers' Action Network of financial irregularities, has resigned, saying the new board continues to cover up the mess rather than try to straighten out the organization. Peffer, a lawyer, originally informed the board that former executive director Michael Shames was officially holding himself out as a lawyer when he was inactive in the bar; that Shames was wrongly taking bonuses off the top of intervenor fees, and that misspelled financial accounts were suspicious, among many other things.

The board then hired a supposedly independent investigator, a friend of Shames, at Shames' suggestion. Then came twisted explanations for the various misdeeds; the board brought on University of San Diego law professor Robert Fellmeth, who had founded UCAN and put Shames in place in 1983. In short order, the one board member who had listened to the whistleblowers, Niel Lynch, was off the board. A board member and a new executive director, both former Fellmeth students, were recruited. "UCAN is not going to be saved, not going to be turned into a legitimate organization that serves the public," says Peffer. "The current UCAN is committed to the coverup of what went on there. By staying on at UCAN, I could be exposed to civil or criminal liability." The Federal Bureau of Investigation has been poring over the UCAN books for more than a year, but there is believed to be pressure on the U.S. Attorney's office to drop the probe.

Shames, who parted company with UCAN after a succeeding executive director -- now gone -- discovered what he had done, has filed suit against UCAN and Peffer. Shames's lawyer, Hallen Rosner, worked closely with UCAN in the Shames years, gaining clients and much money from his relationship with the organization. But UCAN's lawyer in the suit does not move to disqualify Rosner for this obvious conflict of interest. That lawyer, James Crosby, graduated from the USD law school in Shames's class.

"Why in the world is not UCAN moving to disqualify [Rosner]?" asks Peffer. He thinks UCAN "wants to force a settlement with a gag order and retraction of allegations," forcing him to sign. "It is not going to happen. The truth is going to come out," says Peffer. Current UCAN management has tried to get UCAN's insurer not to insure Peffer. However, Peffer and his attorney are chomping at the bit to get Shames and others under oath in depositions.

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