Lobbyist hit with large fine by state ethics watchdog

SACRAMENTO — Susan Kennedy has had many titles over the years as a political heavyweight in the state — chief of staff to Gov. Arnold Schwarzenegger, deputy chief of staff to Gov. Gray Davis and a commissioner at the California Public Utilities Commission, to name a few. But one title she did not disclose has her facing a hefty fine from the state campaign finance watchdog.

Kennedy failed to register as a lobbyist from 2012 and 2014, despite high-paying contracts with Lyft and Southern California’s San Gabriel Valley Water Co., according to an investigation by the Fair Political Practices Commission.

The commission found that Kennedy and her company, Susan P. Kennedy Inc., violated eight counts of the state’s Political Reform Act, and it

proposed a $32,500 fine that Kennedy has agreed to pay, according to a copy of the settlement agreement released Monday by the commission.

The commission’s five-member board must agree to the settlement before it can be finalized.

Lyft and the San Gabriel Valley Water Co. paid Kennedy more than $200,000 combined to lobby the Public Utilities Commission, according to the settlement. Kennedy herself was a governor-appointed member of the utilities commission from 2003 to 2006.

Kennedy began working as a consultant for Lyft in 2012 on a $15,000-per-month contract. At that time, ride-sharing companies like Lyft, Uber and Sidecar were facing scrutiny from the Public Utilities Commission for operating without permits.

After being retained by Lyft, Kennedy contacted the utilities commission’s then-president, Michael Peevey, and thenexecutive director, Paul Clanon, to “influence the nature of the rules and regulations” being considered by the agency, according to the settlement.

Kennedy’s efforts, the settlement notes, were successful, resulting in rules and regulations mirroring what Kennedy had suggested.

The San Gabriel Valley Water Co., an investor-owned-utility water company regulated by the utilities commission, retained Kennedy in 2013 on a $25,000per-month contract. At that time, the water company was trying to get the utilities commission to approve a rate increase from customers in the San Bernardino County city of Fontana.

The settlement said Kennedy met with Peevey and thenCommissioner Michael Picker, who is now president of the commission. During the meetings and in emails later, Kennedy lobbied the commission to approve the rate increase, according to the settlement. The rate increase was initially denied in May 2014, but a modified increase was approved in November 2015.

As part of the settlement, Kennedy admitted that the contacts she had with the utilities commission on behalf of Lyft and the water agency qualified as lobbying. She has since registered as a lobbyist.

Kennedy told investigators that she no longer works as a paid consultant and “does not intend to resume such work.”

“Ms. Kennedy moved immediately once the discrepancy was identified to provide the necessary information requested by the FPPC,” said James Harrison, a spokesman for Kennedy. “Integrity and character are hallmark principles in how Ms. Kennedy conducts herself in business, which is why she is acting swiftly and looks forward to its resolution.”

Melody Gutierrez is a San Francisco Chronicle staff writer. Email: mgutierrez@sfchronicle. com. Twitter: @MelodyGutierrez