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Wednesday, May 11, 2011

Ind. Gov't. - "Internal emails shed additional light on Duke-IURC scandal"

Another amazing story today from John Russell of the Indianapolis Star, that fills in some of the holes in (or adds depth to) the earlier stories. I started highlighting halfway through the story, with the paragraph that began:

The buzz started as early as May, even before Reed joined Duke, according to one email.

"Rumor is making the rounds at the Commission that we are hiring Mike Reed and Scott Storms," Melanie D. Price, a Duke lawyer, wrote to colleague Kelley Karn in an email May 13. "Not sure where it came from, but Bob Pauley (an IURC staffer) is telling folks."

Karn, Duke's top regulatory lawyer in Indiana, had met with Storms several times to see whether he was interested. But she was later told by her superiors not to hire another IURC official, a sentiment that Rogers had expressed.

Reed wasn't deterred. "I'm still working on the 'you' issue with Duke mgt," Reed wrote to Storms in an email June 27. "Don't sense a concern about making this happen, rather more of an issue of when and how."
Push to please regulator

But Karn was in a bind. Hiring Storms might set off criticism from consumer groups. But not hiring him, she seemed to feel, could upset Hardy, the powerful chairman of the IURC.

Karn turned to her boss at Duke's corporate headquarters in Charlotte, N.C., for guidance. "This could all blow up with Hardy being mad that we won't hire Scott," she wrote in an email July 1 to her boss, Catherine Stempien, senior vice president for legal services. "I'm really not sure how to get out of this mess."

Stempien said she would talk with Reed the following week. "Or do you think I need to act sooner?" she asked.

But Reed was working the issue hard with Turner. On July 20, he wrote to Turner, the second-highest executive at Duke, saying he had recently had dinner with Hardy. "Some reason, (he is) still mad at you," Reed wrote. He suggested that Turner call Hardy the next day to smooth things over. A topic for discussion, Reed said, should be Storms.

"(Hardy) wants to close the deal or move on," Reed wrote. "Important to him, and I think real good for us."

Another topic of discussion, Reed said, should be Edwardsport. "If mood is right, set the 'what if' on Eport," Reed wrote.

A week later, on July 26, Turner wrote to Reed, talking about several issues in Indiana, including Hardy's future. "Let's put our heads together on this vis-a-vis Hardy as well," he said. "I hate to see him grow bitter as he gets closer to handing over the reins. He's too good a guy to lose his cool at this point in his career."

Reed immediately replied, asking whether Rogers had "provided any feedback" on Storms. "That will ease some tensions, if (Rogers) agrees to proceed," Reed wrote.
Link to governor's office

On the same day, Turner seemed to pick up an important ally in the Statehouse: David Pippen, general counsel to Daniels. Turner sent an email to Rogers on July 26, saying he had "just talked with Pippen" and it would "be fine" to move forward with discussions on Storms.

"I was pleasantly surprised by how positive and supportive the gov's chief counsel was," Turner wrote.

The very next day, Turner had good news for Reed. In an email containing the subject line "Storms," Turner wrote: "Got OK from Rogers to hire him."

A Daniels spokeswoman, Jane Jankowski, took issue Tuesday with the suggestion that Pippen had supported the idea of Duke hiring Storms.

"There was no discussion of Duke hiring Storms," she wrote in an email. "Pippen was asked about Storms' work as a state employee. Any other characterization is Turner's."

The lengthy story continues on before it concludes:
"Many of the actions of Duke's upper management appear consistently targeted at pleasing the former commission chairman (Hardy) and increasing the likelihood the Edwardsport cost overruns would be passed on to ratepayers," he said, "regardless of whether such costs are reasonable or whether the plant has been constructed efficiently."
Plus, the Star has posted online a new stack of emails, 19 pages worth. A review reveals a number of items not covered in the story today.

Here is a list of earlier ILB entries containing "John Russell" references.

Posted by Marcia Oddi on May 11, 2011 09:23 AM
Posted to Indiana Government