What happened to Hearst?
 	 		 		
What happened to Hearst? | October 10, 2001 | SFBG News
 		 		 		 		
HOW SAN FRANCISCO ended up with Pacific Gas and Electric Co. as 
its utility company is an intriguing tale of federal 
investigations, corrupt city officials, and a greedy energy 
corporation that stopped nothing short of extorting votes to do 
business here despite a public power mandate.
 						
Perhaps it's one of the biggest scams ever to be pulled off in 
the United States – certainly in San Francisco. And it's always 
been intriguing to look at the role the city's newspapers played.
 						
In the early days, when the San Francisco Chronicle was firmly 
behind PG, William Randolph Hearst's Call and Examiner were 
strong proponents of municipal power, running big front-page 
stories rooted in populist, anti-big business belief.
 						
But by the mid 1920s, Hearst's papers were promoting a position 
much friendlier to PG. No longer would Hearst stand in the way of 
a privatized water and electricity system.
 						
Many have speculated as to why. For example, Frank Havenner, a 
longtime San Francisco supervisor and later a U.S. 
representative, told author Joe Neilands in a l969 Bay Guardian 
story that Hearst was paid off by PG after the utility started 
buying full-page ads in Hearst's papers.
 						
But according to The Chief (2000, Houghton Mifflin), a new Hearst 
biography written by David Nasaw, there may be another reason why 
Hearst abandoned the Raker Act mandate.
 						
In the mid 1920s, overleveraged and desperate that no bank would 
lend him funds to keep his growing and nationwide empire afloat, 
Hearst turned to Herbert Fleishhacker, president of the London 
and Paris National Bank in San Francisco.
 						
Fleishhacker was one of the leading advocates in the push to 
privatize the city's water and electricity systems.
 						
Soon after, according to a Hearst-penned letter that appears in 
Nasaw's book, Hearst was instructing his ranks to maintain 
"pleasant relations" and to refrain from criticizing "Mr. 
Fleishhacker or his enterprises."
 						
Nasaw did not relay the precise deal that Hearst and Fleishacker 
struck, but we do know that Hearst changed its policy on public 
ownership of Hetch Hetchy and supported PG and generally censored 
or distorted its PG coverage up to the present day. (For an 
example of how PG influences the press, see "How PG Wired City 
Hall," 3/30/88.)
 						
For a complete chronology of San Francisco's fight for public 
power go to www.sfbg.com/News/pgande/pgechron.html 
[http://www.sfbg.com/News/pgande/pgechron.html] .
 						
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