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Indian adviser gets caught in a political battle

Sukhjit Purewal in San Jose

Caught in the crossfire of the political salvos being hurled between California Governor Gray Davis and the man who wants his job, Secretary of State Bill Jones, are several of the governor's energy aides, including adviser Vikram Budhraja.

The Security and Exchange Commission asked Budhraja, whose company Electric Power Group has a $ 6.2 million contract with the state's water department, for details of his stock transactions for the year.

The request came at the urging of Jones who wrote a letter in July asking the SEC to investigate Budhraja and 10 other employees, whom he said could have engaged in insider stock trading.

Since then, Jones has added the names of another 40 consultants to the list who have been hired to help California find its way out of an energy crisis. Jones, a Republican, has announced he is running for governor next year.

In fact, five of the contract employees named in the letter, were fired for owning shares in two leading energy producers -- Calpine Corp. and Williams Cos.

Meanwhile Davis' chief spokesman Steve Maviglio, who was also caught up in the brouhaha for recently purchasing shares in Calpine, sold his stock after his purchase became public and remains on the staff.

In the letter to the SEC dated July 25 obtained by rediff.com from Jones' office, the secretary of state alleges that Budhraja had investments in power companies while being employed by the state in "what appears to be a glaring violation of securities law."

Insider trading laws prohibit investors from profiting from information not known to the public.

But Budhraja's attorney Stephen Kaufman of Los Angeles told rediff.com, that Jones's allegations were just that and his client had done nothing inappropriate.

Kaufman said it wasn't the SEC that was accusing Budhraja of insider trading, it is strictly Jones.

"My client has not done nothing wrong or acted in any way against federal and state's laws," Kaufman said. "We emphatically deny Mr Jones accusations."

It was in January when Budhraja had purchased shares in Edison International, parent company of energy supplier Southern California Edison, and power producer Dynegy Inc. of Houston, one of the companies Davis has accused of gouging the state.

Budhraja was formerly a senior vice president for Edison International.

Kaufman said his client sold his shares as soon as he was hired by the state on January 29. According to Jones' letter however, Budhraja's contract with the state was dated for January 18, which Kaufman has stated is an error.

And now Davis' administration has fired its own allegations of impropriety, contending that Jones is guilty of using the state's money to fight his campaign battle. Garry South, Davis' chief political adviser told the Sacramento Bee that the ethics problem in the state have to do with the secretary of state.

Jones responded that he has done nothing wrong and that as secretary of state it is his responsibility to raise conflict questions.

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