The agency is facing three criminal probes.

By Jeff McDonald
March 26, 2015 – 6:26 p.m.

The California Public Utilities Commission has arranged to spend as much as $5.2 million on criminal-defense lawyers to respond to ongoing state and federal investigations.

According to a four-page amendment to a contract that was first signed late last year, the Sheppard Mullin law firm is authorized to bill up to that amount to represent the commission and certain employees through June 2016.

The original agreement was signed in November, days after state investigators executed a search warrant at the commission’s San Francisco headquarters and left with boxes of materials and potential evidence in an ongoing public-corruption case.

Raymond Marshall, the firm’s top white-collar crime defense attorney, is being paid a discounted rate of $882 per hour. Marshall’s usual rate is $990 per hour. Other attorneys listed in the agreement are billing the commission more than $700 per hour each.

The first contract was capped at $49,000, money that likely ran out quickly at those rates.

The amendment allowing the additional payments was signed Thursday by the commission’s acting executive director Timothy Sullivan.

Commission spokeswoman Terrie Prosper did not immediately respond to questions about the agreement.

The utilities commission has been the subject of unrelated state and federal criminal investigations since last summer, when thousands of publicly released emails showed the unusually friendly relationships commission officials had with utilities they are supposed to regulate.

Among other things, the emails showed, commissioners conducted private discussions with utility executives about pending business, altered commission schedules at the executives’ request and shared meals and overseas trips with the company officials.

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