How Michael Shames became California’s star consumer advocate.

San Diego’s leading consumer activist won’t admit it, but he’s feeling a tad pushed. Michael Shames ’83 (J.D.) is with a photographer on a Friday afternoon. He’s being worked through poses at his desk.

Pick up the phone. Look busy. Look natural. No. Look angry.

“I don’t do angry,” says the executive director of UCAN, the Utility Consumers’ Action Network, a nonprofit watchdog that protects consumers against fraud and utility abuse.

To do angry, Shames says, he needs to be in a meeting with energy company bosses, he needs to hear about their unnecessary rate hikes, he needs to get frustrated when they don’t listen to the consumers’ point of view. “Right before I walk out,” he says. “That’s when I get angry.”

Imagine you’re in a meeting.

He tries on the mask; it doesn’t fit.

“This isn’t working for me.”

The photographer presses: She wants a feistier activist. Shames wants to end the session sooner rather than later. So he gives in, and toughens: “How’s this?” Hard pose, stern gaze.

That’s it.

That may be it for the moment. But that’s not all for the day — not for “the media darling,” as one of Shames’ friends calls him. The even-keeled, photogenic Shames will speak to reporters three times a day; for TV news crews, he’ll endure the makeup brush four or five times a week. It’s all part of how he and UCAN publicize the inappropriate and illegal business practices they uncover. Without what he calls this “healthy symbiosis” between UCAN and the media, the group’s advocacy efforts might go unnoticed.

But the exposure also has made the 48-year-old with the well-kept beard and a runner’s physique instantly recognizable in San Diego. Most people take 15 minutes to pick up a few things from the grocery store, Shames needs at least 30, because he’s constantly button-holed by consumers who want to talk about the outrageous mark-up of local gasoline prices, telecom bills full of cryptic charges or credit-card companies that tack on a fee when they discover you’re behind on your mortgage. But it’s all part of the job for Shames. UCAN exists, he says, as a proxy for consumers’ frustrations.

“They want to talk,” he says, “and I can’t say no.”

Populist for the People

When Shames founded UCAN in 1983 — the organization grew out of a USD law school assignment — he had no idea that his on-camera face would become as important as the legal challenges he would bring against natural gas, gasoline and electricity providers. Back then, he recalls, getting a story in The San Diego Union or the Evening Tribune was a huge thing for UCAN.

“It would happen once every three to six months,” he says. “I remember us thinking, ‘Wow, we’ve really made it now.’ To be on the TV news was a dream — that’s why I created UCAN.”

Today, at its second-story office in San Diego’s Hillcrest area, UCAN is staffed with 10 full-time employees, a second lawyer and a receptionist. In addition to watching over electricity and natural gas prices, the organization monitors San Diego’s gasoline market, which has some of the nation’s highest prices, and tells consumers where to find the cheapest stations. UCAN’s Fraud Squad investigates complaints consumers have with cable television and cell phone companies. The group files lawsuits on behalf of consumers when needed, lobbies on behalf of better energy and telecommunications regulations, and offers consumer educational materials.

At the center of all these fights is Shames, who some call a local icon. Steve Alexander, who runs a public relations firm in San Diego and knows Shames well, calls him ethical, fair, and “respected and revered whether he’s liked or disliked.”

Once, at a cinema society opening, Alexander brought Shames with him. “I couldn’t get into that movie theater without 10 or 20 people stopping him, saying, ‘Great job,’ ‘Keep up the good work.’” says Alexander. “He’s a populist without being a politician. You can’t drive down the street, heat or cool your house, drink the water or use a cell phone where Michael hasn’t done something to affect that — to your benefit.”

UCAN’s bulldog logo, the press conferences and media appearances, taking stands such as branding cell phone companies as “predators” — all are part of what Shames terms the “theater of consumer advocacy.” No wonder the photographer wants poses; no wonder Shames obliges. He’s like a public official whose office is beholden to no one and everyone. Of course, he’d like his private life back, which he finds only when he flies off for adventure travel a continent or two away. But in San Diego, he feels he’s got to make time for every reporter, picture-taker and person on the street. It’s his way of honoring what he calls “the job I have created at UCAN — to represent the public.”

Bully Buster Extraordinaire

Shames’ call to public service arrived early. According to his parents and a childhood friend with a glass eye, he’s hated bullies all his life. In first grade, Shames stood up against the brutes who picked on his glass-eyed buddy.

“I would intervene a lot,” Shames says.

“I stepped in to break up fights. That’s my history. Keep the peace.” He lives by that credo even today. Bowling with friends recently, he and his wife rushed to aid a woman who was being threatened by her husband. “My reaction was to intervene and stop it. I get viscerally angry when I see anyone bullying anyone else.”

His concern for others is coupled with a family trait: fearlessness. As a teen-ager, Shames often flew with his mother, who is a pilot. Once, he and a friend were on board while she piloted a single-prop plane. At 5,000 feet, the plane’s engine began sputtering. Calmly, Shames inquired, “Mom, didn’t you check the tank?” She said, “I thought I did.” The next moment, the engine quit. The plane began gliding — no sound but the whistling wind.

Rather than panic, Shames remembers, he and his mother began calculating their options: “Let’s find a place to crash. Is that a field over there? That looks good.” As they floated down, she said, “You know what? Let me check that other tank” — every plane has two tanks, both of which she believed were empty — “oh, there is fuel.” Flipping a switch, the gas surged and the engine kicked in.

Shames carried that courage into his adult life. As a UCLA undergraduate, he advised students on landlord-tenant issues in a campus consumer advisory office. He also made money writing jokes for comedians — a skill that he says serves him in dealing with the media today.

After graduating, he volunteered for a year at the consumer advocacy group CalPIRG in San Diego. At the time, San Diego energy prices had skyrocketed to the nation’s second highest, and it seemed no one was monitoring the hikes.

“My interest in environmental issues and consumer advocacy converged in a complex array of energy policy issues,” Shames says. “I was hooked.”

He learned about the Center for Public Interest Law at the USD School of Law, headed by Professor Robert Fellmeth, which enables students to learn about administrative law by monitoring state regulatory agencies. He got involved with the center soon after coming to law school at USD, and as a student monitor of the California Public Utilities Commission (CPUC), Shames decided to create a regional consumer group. Fellmeth and another USD professor, Robert Simmons, agreed to supervise his effort. After a year of doing research and attending regulatory meetings, he received approval from the CPUC for a San Diego-based board of citizen regulators — and he named the group UCAN.

As the group’s first undertaking, Shames got access to San Diego Gas & Electric’s records, where he found unnecessary charges and errors. Armed with proof of over-charging and with the right to include a fund-raising flier for UCAN in SDG&E’s customer bills, the group took wing. People joined and sent money. In 1984, membership rose to 60,000 and UCAN became the largest consumer group in the country.

Since then, Shames says UCAN has helped steady electricity costs by encouraging the state not to allow SDG&E to sign expensive long-term contracts, but rather to buy cheaper power. During the mid-1980s, Shames sued the CPUC to require SDG&E to purchase short-term contracts, taking advantage of an energy glut.

By prevailing in the SDG&E lawsuit and other cases, Shames earns his attorney’s fees from those on the losing side. These payments, along with grant-writing and membership donations, fund UCAN. The group’s budget, Shames notes, will be nearly $1 million in 2005.

As he fights for lower prices, Shames admits he is nervous about San Diego staying affordable for the average consumer. Feedback he receives from his 39,000 members has led him to the conclusion that life in Southern California is getting too expensive for some. In fact, according to the North County Times, Californians pay the most in the United States for energy: since 1998, prices in the state have risen 43 percent for natural gas and 83 percent for gasoline. Prices in San Diego — Shames calls it gouging — are always a bit higher.

“It’s harder and harder to stay in San Diego,” he says. “Everything is more expensive, whether it’s the cost of trash, water, electricity or housing.”

-Bulldog for the Underdog

Cordially Detested

Each time the name of his longtime nemesis, SDG&E, comes up, Shames laughs. He says some of the utility’s employees hate him and a few have lied to him, which has consequences: “When you lie to me, you lose the right to talk to me.” If it seems he’s disliked by the power company, he’s also needed: SDG&E communications manager Ed Van Herik admits that the company actively solicits his participation in its grid development and rate hikes.

“Whenever SDG&E wants to do something,” Shames says, “those on the CPUC say, ‘What does Shames think?’”

Shames and UCAN have vigorously opposed SDG&E at hearings and in court for 20 years, and the fight is not likely to end any time soon. Shames says that Sempra Energy, the current owner of SDG&E, has made regional energy matters worse by consolidating energy services companies through its acquisitions. He claims Sempra has all but done away with small businesses, which have been pushed out of the market Sempra now dominates.

“We celebrate business in America,” Shames says, “but we are actually celebrating corporatism.”

As an example, Shames points out that in Los Angeles, there are five refineries that produce gasoline, three of which sell to San Diego. The cost to bring the gas south is one cent per gallon. So why are San Diego’s gas prices the highest in the country? The companies, Shames says, “technically, on paper, agree to compete with each other. But they don’t compete.”

Instead, UCAN claims they have formed an oligopoly, a word Shames subverts to “oilgopoly.” The result: very few independently owned gasoline stations can go toe-to-toe with the big boys.

To Shames, however, consumer advocacy is about more than saving people money and reducing unwarranted fees for ratepayers. Money, he says, is not what drives his work.

“If you look at most of the lawsuits I bring and the projects I pursue and get grants for, they are what I call dignity issues,” he says. “Treating customers with dignity, treating them with respect.”

Practicing What He Preaches

Shames knows firsthand about respecting customers. He and his wife, Deborah Davis, have owned a non-toxic dry cleaning business, Cleaner By Nature, in Los Angeles for many years. Shames says many people have had a precious piece of clothing destroyed by a dry cleaner; it occurs so regularly that people routinely denigrate the clothes-cleaning trade. Shames developed a different kind of business model — he and his wife treat customers well, with fair pricing and guarantees, and they treat employees well by avoiding perchloroethylene, a toxic petroleum solvent that can make them sick.

It’s a whirlwind life. To keep from burning out, a condition common to activists, Shames is proactive about his own life.

He eats right. Exercises three times a week. Runs half-marathons. Travels to remote places like Machu Picchu in Peru or the Kakadu National Park in northern Australia. Regenerates himself physically and spiritually by climbing mountains, Mount Rainier and Mount Whitney, among others. Practices meditation to control pain. Refuses Novocain for dental work. Takes no other drugs, except a Tylenol once when he injured his leg hiking in the Andes. “I pace myself,” he says.

Well, not always. Shames contracted pneumonia during the 2000-2001 California energy crisis, shuttling like a diplomat to weekly CPUC meetings in San Francisco. He tried combating the disease with running but he got sicker.

His doctor told him he couldn’t beat it without drugs, but Shames refused treatment. Soon, though, he had to admit the pneumonia was winning. Despite a regimen of antibiotics, it took him a year to get his vibrancy back.

Shames says he’s often queried by attorney friends who, as he says, “make obscene amounts of money for what they do” — a not uncommon $500,000 a year while he takes home $72,000. They ask (or accuse) him, “‘How can you afford to live that way?’ and ‘Why make that kind of sacrifice?’” Shames laughs: “I don’t view it as a sacrifice. I view them as overpaid.” Besides, he says he wouldn’t be happy doing what they do.

Before going to law school, the forward-looking Shames worked a year and saved money, so that when he graduated, he had no debt. He says that these days, people come out of law school with $150,000 worth of debt. “They couldn’t work at UCAN. They require too much salary.” Instead, Shames finds practicing lawyers who’ve grown disaffected with their firms and who are seeking an ethical change. Only then are they ready for UCAN.

-David vs. the Goliaths

Twenty-two years of activism have spurred Shames to pass on what he’s learned.

A decade ago, USD School of Business Administration professor Marc Lampe hired him to teach the school’s “Business and Society” course. Lampe is thrilled to have Shames on the faculty, calling the adjunct “a hard-working and courageous individual, a David against the Goliaths.” Shames’ classroom approach is to teach critical thinking, and to help students learn to analyze for themselves by relying on their personal values. He stresses current issues and controversies and includes “stakeholder analysis,” in which business decisions must impact more than a company’s shareholders. From his classes, Shames siphons off interns interested in acquiring activist skills at UCAN.

Shames also has a book coming out this month.

“I’ve tapped into my college comedy writing talents to write a ‘handbook’ that is 50 percent spoof and 50 percent substance,” he says. The guide to the new consumer tools and challenges of the 21st century is titled Secrets from the World’s Greatest Consumer. Typical of his confidence and drive, Shames wrote the book in six months.
All this success is not without casualties: After 17 years of marriage, Shames and his wife are divorcing. Deborah is merging Cleaner By Nature with another L.A. dry cleaner and will oversee the $3.5 million business. In 2004, she told Shames that because of the impending merger she would have to live full-time in Los Angeles. She asked him to move — permanently.

Shames thought about the request all year, decided to do it, but then, he says, “one of those epiphany things” hit him.

“You know what? I just love what I do here too much,” he says. “I don’t want to give this up.” The good news, he says, is that he and Deborah remain friends.

Though he faces a scary transition, joining the ranks of single men, that’s about the only thing that will change in his life. The rest — suing the utility monoliths and staying open to the media — will no doubt continue. Just don’t expect Michael Shames to strike a pose.