« Ind. Decisions - Still more on suit between one Indiana state agency and another | Main | Ind. Decisions - Upcoming oral arguments this week and next »

Sunday, November 28, 2010

Ind. Gov't. - Another amazing IURC / Duke Energy story today

Following on this long list of earlier entries, John Russell reports in a front-page story in the Sunday Indianapolis Star, under the headline: "IURC chief and Duke exec were pals, e-mails show: Regulator, utility power player discussed a lot -- including Duke's hiring process." The "Duke exec" in the story is not the recently fired president of Duke Energy-Indiana, but the second in command to Jim Rogers himself. Some quotes:

James L. Turner, the second-highest-paid executive at Duke Energy Corp., liked keeping in touch with Indiana regulators, even on a long holiday weekend when he was riding in a boat.

On July 2, Turner sent an e-mail to David Lott Hardy, then chairman of the Indiana Utility Regulatory Commission, telling him he was heading out on a channel to Lake Michigan.

"Would the ethics police have a cow if you and the woman came up some weekend?" he wrote.

Hardy wrote back: "Probably -- we might 'be in the area' some afternoon, but I won't be doing this forever."

A few minutes later, he added that driving to the lake would be a fun outing in a high-performance BMW M5. "It would be a nice run in the M5 and a cheaper [Michigan] journey as usually we only go to [Michigan] so the woman can go to Nieman Marcus."

In dozens of e-mails, obtained by The Indianapolis Star under an open records request, the two men schmoozed and joked over all sorts of personal topics, sometimes trading messages eight or 10 times a day. At one point, Hardy offered advice on what kind of BMW Turner should buy. Another time, they talked about Butler University's basketball championship games. Several times, they had frank discussions on private personnel matters involving Duke officials and job candidates.

Taken together, the e-mails paint a picture of a cozy relationship that extended far beyond a professional association between a utility executive and a powerful state regulator.

And from the end of the long story:
How far the cozy relationships with Duke executives extended into state government is unclear. But the subject of Storms' hiring by Duke was raised with Daniels' chief of staff, Earl Goode, nearly two months before Storms left the IURC.

The Star reported last week that Reed was concerned by comments Goode made to him about Storms during a golf game Aug. 1.

According to e-mails, Reed told Hardy he had run into Goode, who said he would be surprised if the state's ethics panel cleared Storms, because of his role in presiding over Duke's $2.9 billion coal-gasification plant in Edwardsport.

Goode said last week that his comments to Reed meant only that Storms would have to go before the state ethics panel, as would any state administrator considering a private sector job offer. He said he had no opinion on Storms at that time. Only later would Daniels' office issue findings that Storms had a conflict of interest.

Asked why he was golfing with Reed, Goode said they were playing together in an event for GTE workers. He and Reed previously worked for GTE.

Reed apparently was worried about Storms' possible difficulties with the ethics commission. Later that same day, he sent Hardy an e-mail suggesting a way to address those difficulties. He urged Hardy to have the IURC's ethics officer, Loraine Seyfried, "clearly spell out how [Storms] would be walled off from Edwardsport, and therefore meet the test."

A few weeks later, Seyfried sent a three-page memo to Storms, stating her opinion that his prospective employment with Duke would not violate the state ethics code. Storms presented that opinion to the ethics panel Sept. 9, when he asked for approval to take the Duke job. The ethics panel gave him the green light in a ruling that largely mirrored Seyfried's memo.

Storms and Hardy later joked by e-mail that they were impressed that no one laughed during the ethics hearing. Later, after Storms went to work for Duke, Hardy offered [Storms'] old job as administrative law judge to Seyfried, presiding over Duke's Edwardsport project.

Daniels' office later found Storms had not walled himself off from Duke cases while discussing career options there.

Posted by Marcia Oddi on November 28, 2010 02:03 PM
Posted to Indiana Government