The Case Against John Bryson

The Case Against John Bryson

August 03, 2011
Originally published in The Kansas City Star


President Obama's nominee for secretary of commerce, John Bryson, is a terrible choice for a Cabinet department ostensibly dedicated to promoting economic growth and job creation. In fact, Bryson has made a career out of undermining both. Over the years, he has used his government connections to game the political process and receive billions in bailouts and subsidies. America does not need any more crony capitalists in high places.

Bryson's began as a regulator in California in 1976, when then-Gov. Jerry Brown appointed him to the State Water Resources Control Board. In 1979, Brown appointed him to chair California's Public Utilities Commission (PUC). As chairman, he deliberately drove up electricity rates by using fixed-rate contracts that passed the costs of massive wind energy projects on to consumers.

Bryson readily acknowledges the effects of his policies during this period. "What California has done is knowingly incur higher cents per-kilowatt-hour costs," he boasted in 2009. "They're substantially higher than the U.S. average in order to invest in the kind of systems we have in California. ... That's been part of the regulatory environment for the investor-owned utilities as long as I've been close to it."

As PUC chairman, Bryson helped create a regulatory structure that fixed utilities' profits at a percent of costs. As a result, the utilities make money not by bringing costs down and selling more electricity, but by raising costs with unnecessary, expensive and redundant projects.

Moving from government to industry, Bryson parlayed his intimate knowledge of the regulatory landscape - which he helped create - into a high-level position with the utility Southern California Edison in the mid-1980s. After rising to CEO of parent company Edison International, he then used his government connections to make a series of cushy political deals for the utility.

As part of the Golden State's phony electricity deregulation of the mid-1990s, Edison and other utilities lobbied for a bill in the California legislature that would allow them to pass the costs of their poor investments onto ratepayers. The bill passed the legislature and was signed into law by Gov. Pete Wilson in 1996. Literally overnight, California ratepayers were put on the hook for $27 billion - nearly $3,375 for every family in California.

The deal was a bailout, and it wouldn't be Edison's last. Just five years later, Edison was heading toward bankruptcy and back in Sacramento begging for more taxpayer dollars.

Edison executives and employees gave Gov. Gray Davis nearly $350,000 in campaign contributions, and Bryson used the close relationship to secure another rescue. The state agreed to purchase Edison's electricity transmission system for $3 billion, twice the system's value, but enough money to save Edison from bankruptcy. As a result, Bryson was able to retire in 2008 with a $65 million severance package.

Since retiring from Edison, Bryson has served on a number of corporate boards, including BrightSource Energy and Coda Automotive - both of which rely heavily on government support. Coda is a major beneficiary of electric car subsidies from the Obama stimulus package. BrightSource, where Bryson serves as board chairman, has received one of the largest one-time loan guarantees ever - $1.6 billion to build a solar energy project in California.

A commerce secretary ought to believe in commerce - the voluntary exchange between entrepreneurs and consumers that is the source of real prosperity. Bryson, however, makes it no secret that he lacks faith in free enterprise. For years, he has advocated for energy efficiency standards like the ones that banned the incandescent light bulb and gave Americans low-flow toilets and washers that don't get clothes clean.

Bryson's career demonstrates that he trusts politicians and bureaucrats, not businesses competing in the market, to drive the economy. Just as voters in 2010 rejected bailouts and subsidies for politically favored businesses, the Senate should reject the confirmation of John Bryson.