UCAN Demands Shames Return $474,000 in Bonuses

Michael Shames, former head of financially ailing watchdog Utility Consumers' Action Network (UCAN), has been told to return $474,019 to UCAN as a result of consultation with the Attorney General's office. As reported by the Reader in July of 2011, Shames was taking for himself 10% bonuses off the intervenor fees that UCAN received from California Public Utilities Commission (CPUC) hearing participations. Board members didn't know of the practice, although Shames claimed they did.

Yesterday (Oct. 2), Kendall Squires, UCAN chairman, wrote to Shames. Squires told how UCAN had reviewed the 10% bonuses with the charitable trust section of the AG's office. "On the basis of its investigation, UCAN's board concludes that your bonuses from 2005 through 2012 were unauthorized and improper," Squires wrote. "This letter demands the return of $474,019 in unauthorized compensation you arranged to be paid to yourself between 2005 and 2011." In the letter, Squires said Shames did not report the dollar amount of each bonus payment to the board, and did not report the total amount of his annual compensation including bonuses in UCAN's 990 reports to the IRS. Also, there are no records showing the board approved any bonus payment at any time.

It appears that Squires had delayed sending the letter. On September 23, Kim Malcolm, who recently resigned as the executive director, wrote to a board member and said, "As far as I know, UCAN's board has not followed up on compliance with the Attorney General's directive that the UCAN board demand repayment of Shames's bonuses...If I were on the board of an agency that is under investigation for all kinds of possible malfeasance, I would not delay compliance with any law enforcement agency's directive."

I have heard from several reliable sources that the FBI/U.S. Attorney investigation of UCAN's finances is intensifying. Today, UCAN said that it has been asked to provide additional documents to the U.S. Attorney. UCAN has waived the attorney/client privilege in relation to communication with certain lawyers and law firms between Jan. 1, 2010 and the present.

Comments

Wonderful! The chance that the dirt will come to light just keeps getting better. It is so gratifying to know that agencies with some muscle and guts (meaning not our DA) are on the job. There was something very, very rotten there, with "Shameless" running the place as his private fiefdom and money machine. Too bad that many others who were involved are probably dirty or at least dirtied now. There was something very rotten going on there and for a long time. If it eventually is revealed that he was actually doing a roll over for SDGE on rate cases ans other matters, it will really be devastating. I can't wait for the next episode. Criminal charges are probably coming soon.

Visduh, I know the FBI is hot on this one, but have no idea when or if criminal charges will come. You have put your finger on the big question: Is Shames in SDGE's pocket? That is, can we describe the whole game -- at least in recent years -- as a charade? SDGE would request a ridiculously high return from the commission; Shames would say it should be lower, and SDGE would wind up with a return that was much higher than it had dreamed of. There are good reasons to suspect that. If so, you can be sure that anti-consumer Peevey and probably other commissioners will do their best to make sure that Shames's new organization, SDCAN, gets intervenor fees that should be going to UCAN. If it all is a charade, the commission will do everything in its power to support Shames and SDGE. That would be the death knell for UCAN. Shames wanted to dissolve UCAN in March of last year and the board wanted a dissolution by fall of last year and perhaps earlier. Best, Don Bauder

I have a dream. Shames doing a "perp walk" in the federal court house. Priceless! No, Shameless.

Here's one angle for the Internal Revenue Service to ponder. (My guess is that it already has.) 1. Shames claims that his ex-wife (the second one) prepared the taxes, and he really didn't know his income. (An incredulous judge warned him about perjury.) 2. She says that he never told her of the bonuses. 3. Thus, if she is right that he didn't tell her, and she prepared the returns, those tax returns would have been false, and wouldn't have been her fault. UCAN says Shames did not report the bonuses on the IRS 990 form. Did he report them on his 1090? This is all something to think about. Best, Don Bauder

I do think that Shames has problems, SurfPup. Best, Don Bauder

If Shames thinks he going to be indicted, then he might be better off leaving the U.S. for Israel where there's no extradition treaty. If he's convicted there won't be anything left for him in the U.S. When he leaves prison he will face the prospect of paying large fines and restitution with a $12 an hour job. If he's facing indictment, he needs to make some hard decisions before the ax falls.

Once he's in a courtroom under criminal charges, the court will pull his passport. Let's say he takes off for Israel now. Admission of guilt? I'd say so, and so would everyone else. That would shut off the gravy train, and he'd have a very hard time ever coming home. Deep doo-doo hardly does his situation justice.

Israel does allow extradition. It has been in force since December 5, 1963. In 1978, the Knesset passed the Offenses Committed Abroad Act. It eliminated extradition of Israeli citizens. Crimes committed by Israeli citizens abroad could be prosecuted in Israel. The Extradition Act was thus amended so that no Israeli citizen could be extradited except for offenses committed before he/she obtained citizenship. In April, 1999, the Knesset passed an Amendment Number 6 to the Extradition Act, which permitted the extradition of Israeli citizens who had committed crimes abroad.

Israel is our biggest ally in the Middle East, are you sure we have no extradition treaty with them???

Burwell, Shames's lawyer told the divorce court judge that the U.S. Attorney's investigation was no big deal. He also said the same thing in a letter. Perhaps he believes that having influential University of San Diego folks on his side will get him out of any consequences. But I repeat, and hope the FBI/IRS will see this: Shames claimed his ex-wife prepared his taxes; he said in court he didn't know how much he makes; she said she knows nothing about the bonuses. It certainly appears the tax returns were false if she did not know about the bonuses and she prepared them. Best, Don Bauder

Visduh, Shames has his right to defend himself. His mentor Bob Fellmeth, now a UCAN board member, says Shames hasn't had the opportunity to defend himself. Other board members and staff members question that. They say he has had plenty of time. Best, Don Bauder

In re question of whether we have an extradition treaty with Israel: Burwell has a very good track record, SurfPup. Anybody could check this online. I hope whoever does will check back in here. Best, Don Bauder

I was too lazy to research it- we do have a treaty with them for extradition/.

Tom: It looks like there IS an extradition treaty with Israel that would cover potential charges in this situation. Best, Don Bauder

It looks like? OK, even allowing for your apparent lack of interest in anything other than "scams", scores of extraditions from Israel have been publicized in recent years. Not too long ago,NY extradited a guy who fled to Israel after murdering his own parents. Not long before that, two brothers and three of their "partners", all of whom are Israeli, were extradited from Israel to face charges of murder, money laundering, blackmail and drug trafficking. Allegedly, they ran their operation out of the San Fernando Valley. Earlier this year, Brooklyn man of Israeli heritage was extradited to the U.S. after an arrest warrant was issued for 2nd degree assault and a hate crime. A few months ago, a guy who was convicted of hit and run in Florida and took off to Israel in 2000 was returned to the U.S. Extradition of criminal, even those of Israeli descent, are not a rare or even an uncommon occurrence.

Yeah, it takes an extraordinary effort to type Israel extradition treaty. LOL!!!!!!

Well, not only do you have to type it in, and I could not even spell it, you then need to wait for the selections to come up, and then click on one or possibly multiple selections........I am a busy camper these days.

You're way too funny, surfpuppy619. Unless you're serious, in which case you're probably the laziest m-f-er I've ever heard of. LOL left click, highlight, right click copy, right click paste, left click search, five seconds. Less than 1 second, 900k entrees first entry "EXTRADITION IN ISRAEL - Israel Ministry of Foreign Affairs". Well you said it not me "I was too lazy to research it". LOL!!

$474K in bonuses to one's self sure is nice work if you can get it - and if you truly have no scruples.

Tom: It may be easy to type "Israel," but it might not be so easy for SurfPup, who types too fast. Best, Don Bauder

Yeah, but he's an expert at copy and paste. LMFAO!!!

Shames used to tell people he only made $70,000 a year. People felt sorry for him. But when it came out that he was taking these 10% bonuses on intervenor fees, it was clear that he was making around $200,000 a year. That's good money. Best, Don Bauder

Tom and SurfPup: We are going to make SurfPup write "Israel" a hundred times on the blackboard. Best, Don Bauder

Tom: If SurfPup is an expert at copy and paste, whose prose is he copying and pasting? It ain't Shakespeare's. Best, Don Bauder

Oh come now Don Bauder. As poor as surfpuppy619 is with his spelling and grammatical structure, do you really believe that some of those longer posts, the ones more than 5 lines long and error free, are really of his own doing? That seems to stretch one's credibility just the slightest bit, don't you think? LOL

I never copy and paste, if I do I say so, I also have spell check, have had it for months now, but only use it 25% fo the time (and still words are missed).

The question is whether SurfPup takes credit for those perfect posts. If he does, I have missed it. Best, Don Bauder

It's called sarcasm, Don Bauder. Personally, I will admit that I'm not young enough anymore to know everything. But fortunately for us, surfpuppy619 has never been known to use a word that might send us reaching for the dictionary. In fact, if push comes to shove, I would be forced to admit that when he isn't posting here, it's so, so miserable without him, it's almost like having here posting. But you know what they say, the only thing worse than being talked about is not being talked about.

Tom: SP says he doesn't cut and paste and only uses a spellchecker 25% of the time. Do you challenge that assertion? Best, Don Bauder

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