Hauling Ash: Does Sen. Brian Dahle Have A Conflict Of Interest?

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Senator Brian Dahle and his truck, from www.briandahle.com.

In the summer of 2016, the small mountain village of Burney, 53 miles east of Redding, was on the brink of economic ruin.

Earlier that year, Burney Forest Power, the 30-year-old, 31 MW biomass energy facility just outside of town, announced the rate its main customer, Pacific Gas & Electric, was willing to pay for electricity was not high enough to profitably run the power plant.

Therefore, the facility was shutting down, putting not just Burney Forest Power’s relatively small number of employees out of a work, but hundreds of workers at the nearby Shasta Green sawmill, which supplies the power plant with woody biomass in exchange for electricity to run the mill and steam to cure boards.

The potential loss of hundreds of good-paying jobs might have been a lethal blow to Burney’s already fragile rural economy and its 3154 residents. A wave of layoffs was set to begin when then-1st District Assemblyman Brian Dahle rode to the rescue in late August.

Dahle, a climate change skeptic who normally votes against environmental legislation, inserted an amendment into a senate climate bill, SB 859, that allocated millions of dollars from the state’s cap-and-trade greenhouse gas reduction fund to subsidize electricity rates for biomass plants that obtain a majority of their fuel from high fire hazard forests.

“Once they shut down, they don’t come back,” Dahle told the LA Times in a feature published shortly before the bill was passed. The story book-ended on Burney Forest Power’s potential closing and its possible effects on Burney.

Asked by the Times if it was hypocritical for an opponent of the state’s cap-and-trade program to now seek funding from it, Dahle answered:

“If you’re going to ask me to vote for something, wouldn’t you spend some of the money to show me what you’re going to do with it? I think it’s kind of hard to use the whip all the time. Sometimes you need to use the carrot.”

Shortly after SB 859 passed, Dahle took a victory lap in the Redding Record Searchlight for saving Burney an estimated (by his office) 275 jobs.

“We went to see the Burney Forest Power and saw what they are accomplishing,” Dahle said. “Without the provisions of SB 859, the biomass industry cannot compete with wind or solar power. We need to make them competitive.”

Burney Mountain Power, courtesy U.S. Forest Service.

Show Him The Money

But missing from both the Times and Record Searchlight stories was one interesting fact: For the past 15 years, Burney Forest Power has paid Dahle’s trucking company hundreds of thousands of dollars to haul ash from its incinerator.

According to annual statement-of-interest reports Dahle has filed with the California Fair Political Practices Commission dating back to his days as a Lassen County Supervisor, his Big Valley Seed Company/Trucking Company makes “over $100,000” annually. More than $10,000 of that annual income—it could be considerably more—has come from one primary customer: Burney Forest Power.

If the biomass plant had shut down, Dahle would have lost one of his trucking company’s most valuable customers. His timely legislative intervention kept Burney Forest Power’s dynamo humming and his [LINK] trucking company’s solitary big-rig rolling.

It would seem that when Dahle told the Times the state’s cap-and-trade program needs to show him the money, he meant literally, show him the money. Suddenly, his supposedly hypocritical stance comes into sharper relief: He’s got skin in the game.

Dahle’s been chasing the same economic carrot since 2015, when he introduced AB 590, legislation that sought to subsidize biomass energy with greenhouse gas reduction funds. That bill stalled, so he inserted similar language into SB 859 the following year.

In doing so, Dahle may have violated the FPPC’s conflict of interest regulations, which state:

“A public official at any level of state or local government has a prohibited conflict of interest and may not make, participate in making, or in any way use or attempt to use his or her official position to influence a governmental decision when he or she knows or has reason to know he or she has a disqualifying financial interest.”

In June, Dahle won the special election to replace outgoing 1st District Senator Ted Gaines, a conservative Republican who reliably voted against the Dahle-ammended SB 859. Now Megan Dahle, the senator’s wife, is running in the August 27 special election for his former Assembly seat.

In her statement-of-interest filed with the FPPC, Megan Dahle lists herself as the co-owner of Big Valley Seed Company/Trucking Company.

Excerpt from Megan Dahle campaign flier that just came in the author’s mail.

Dahle Denies Conflict Of Interest

Dahle’s familiarity with what Burney Forest Power is “accomplishing” wasn’t based on a recent visit, as he suggested in the Record Searchlight. He’s been hauling ash for them for 15 years, he admitted in a telephone interview from his home in Bieber last Friday.

The politician who continually touts his status as a farmer/small business owner besieged by government bureaucrats and regulations—most recently at the controversial Faith and Values Town Hall in Redding—first told me that he doesn’t usually discuss his businesses. I asked him about Big Valley Seed Company/Trucking Company’s relationship with Burney Forest Power.

“We do trucking for them, for 15 years,” Dahle said. “We do trucking for other people too.”

None of those other people are listed on the senator’s FPPC forms before 2017, when Santa Rosa-based Pacific Biochar Benefit Corporation joined Burney Forest Power as the only clients paying more than $10,000 annually to the Dahles’ trucking company.

It appears hauling biomass incinerator ash is a major part of the Dahles’ trucking business. Fly ash must be disposed of in landfills. But bottom ash and biochar can be used in agricultural applications. In the case of biochar, it can be an effective way of storing carbon in the ground, instead of burning it completely and releasing it into the atmosphere.

“We put it on our farms,” Dahle said. “We do it both ways. It depends on what the haul is. They pay me to haul. We’ve hauled for others over the years, like Sierra Pacific.”

The FPPC’s conflict of interest rules state “a public official has a financial interest in any person from whom he or she has received income, including commission income and incentive compensation, aggregating $500 or more within 12 months prior to the time when the relevant governmental decision is made.”

When asked if his business relationship with Burney Forest Power represented a conflict of interest prohibiting him from working on legislation in its behalf, Dahle first said, “It wasn’t my bill,” which is true in the case of SB 859, to which he tacked on an amendment. But AB 590 the year before was his bill.

“AB 590 was a bill I worked on to get the biomass industry out of the woods,” Dahle said. He added that he consulted with the Legislative Counsel before working on the bill. “The Legislative Counsel said it impacts all the biomass facilities in California, so I don’t have a conflict of interest.”

Technically, SB 859 does apply to the 26 biomass plants currently online in the state. But realistically, the bill mandates that the state’s large investor-owned utilities like PG&E collectively purchase 146 MW from facilities that burn forest debris from high-fire threat areas as their primary fuel. That shortens the list to just six, including Burney Forest Power.

Detail of Brian Dahle’s 2018 statement-of-interest to FPPC showing business relationship with Burney Forest Power.

Contours Of A Conflict

The biomass energy plant on Burney’s outskirts has been burning an increasing amount of slash and forest debris since Gov. Jerry Brown declared a Tree Mortality crisis in 2015.

An estimated 127 million dead trees, mostly in the southern Sierra Nevada, have been killed by insect infestation and drought during the past decade. At the same time, much of the state’s 33 million acres of forest is a tinderbox of bone-dry undergrowth caused by decades of fire suppression, particularly in the wildland-urban interface.

Burney Forest Power, which did not respond to my inquiries by phone and email, is just one of six facilities currently participating in the Bioenergy Renewable Auction Mechanism, known as the BioRAM program. It was established after Brown’s emergency order, modified by SB 859 and administered by the California Public Utilities Commission.

The six plants, which also includes Wheelabrator Shasta in Anderson, provided collectively 153 MW of electricity to investor owned utilities in 2017, according to the CPUC’s 2018 report on the state’s renewable portfolio standards. That’s in excess of the 146 MW mandated by SB 859.

Burney Forest Power, which sits near the edge of a high fire-threat forest, doesn’t face the substantial costs associated with trucking dead trees and forest debris to facilities more centrally located. Dahle should have reasonably known that the company he’s been doing business with for 15 years would benefit greatly from his legislative efforts, which in turn would benefit him financially.

That ticks off boxes five and six on the FPPC’s 8-point check list for potential conflicts of interest. With his claim that his legislative efforts were on behalf of the entire biomass industry, Dahle seems to be relying on check-point seven, “Is the potential effect of the governmental decision on the public official’s economic interests distinguishable from its effect on the general public?”

If we confine that question to Burney, it’s fair to say Dahle benefited no more than many employees and businesses dependent on Burney Forest Power staying in operation. The same can be said for other communities outside his district where biomass plants have remained in operation.

But as an assemblyman and now a senator, Dahle’s “general public” is much broader than just Burney and the biomass energy industry. It’s the million or so constituents of the 1st District.

“For a conflict of interest to be avoided, the official’s interest must be affected in substantially the same manner as the interests of all members of the group that is determined to constitute a significant segment,” states the FPPC. “If the interests of some members of the significant segment will be affected differently from the interests of others, the official may not avoid disqualification.”

Is it in the best interest of all Dahle’s constituents to subsidize biomass energy? It could play an important role in the state’s struggle to prepare for an increasingly warm future, but not without a substantial investment in new facilities and technology, including carbon storage. Burney would be an ideal location for such a Green New Deal investment.

In a CalMatters op-ed last year, CPUC president Michael Picker acknowledged the biomass energy industry’s future role, but cautioned against significantly expanding the industry to respond to the tree mortality crisis and the wildfires that raged across the north state the past several years.

“Building a new sustainable forestry industry in the Sierra and Siskiyou mountains could make biomass facilities more effective as part of a whole array of fire prevention tools, as well as offering jobs and economic development in those communities,” Picker wrote. “But on its own, biomass is a limited fire prevention tool and will require extensive ratepayer subsidies. Even with subsidies, biomass may not work as an effective fire-prevention tool outside pine forests.”

It seems unlikely that Dahle, a fiscal conservative who’s up for reelection in 2020, would support the sort of massive public investment required to make biomass energy viable.

That would require a politician who believes that anthropogenic climate change is an existential threat to humanity and that government can actually solve some problems. The same goes for whoever replaces Dahle in the Assembly in the August 27 special election.

In the meantime, Burney gets to live another day, until Burney Forest Power’s current BioRAM agreement expires in 2021, and the negotiations start all over again.

Dahle told me that transparency in government is important. That’s why he files those statement-of-interest forms with the FPPC documenting his longstanding business relationship with Burney Mountain Power.

But when asked if he should have mentioned that longstanding relationship to the half-dozen journalists who wrote stories portraying him as a small town’s savior back in 2016, the senator was emphatic.

“No!” he said.

Dahle said he’d send me a copy of the Legislative Council’s decision proving he didn’t have a conflict of interest on Monday. I invited both him and his wife to comment further on their business relationship with Burney Mountain Power if they wished.

Instead, on Monday I got no copy of the Legislative Council’s decision and an email from Sen. Dahle’s chief-of-staff, John F.W. Cook.

“Senator Dahle is a seed farmer, as such he works with other businesses in the Big Valley area,” Cook wrote. “All of these business interactions are disclosed to the public each year and are available on the internet. We are very careful in all of our efforts to comply with the law and be transparent to the public. When concerns arise about potential conflicts of interest, our office seeks the advice of the Legislative Ethics office and other legal professionals. Senator Dahle abides 100 percent by the highest standards of ethical conduct and transparency.”

Cook is correct about at least one thing. The Dahles’ business connection with Burney Forest Power has been a matter of public record for years, for those who have the time and the patience to search for it on the FPPC’s website.

But the general public? It looks like most of them just found out.

R.V. Scheide
R.V. Scheide has been a northern California journalist for more than 20 years. He appreciates your comments and story ideas. He can be emailed at RVScheide@anewscafe.com.
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