IURC, Citizens Action Coalition and John Russell

Dateline: Tue 07 Dec 2010

Huge kudos to the Citizens Action Coalition and the Indianapolis Star's John Russell, for continuing investigative stories on the cozy relationship betwen Duke Energy brass and the Indiana Utility Regulaory Commission's top dogs.

Every time I read one of Russell's front-page stories, I am comforted by knowing that real teeth-in-the-throat journalism is still alive and well at the newspaper, and that citizen watch-dog groups such as the CAC do this community and state an enormous service...and that their role often goes unnoticed and untold.

Honestly, I thought it could not get any better after last Wednesday's story, when Russell printed an email from Michael Reed, the former (fired) boss of Indiana Duke Energy, to David Lott Hardy, the former head of IURC until Gov. Mitch Daniels ousted him in October.

The email was, Reed speaking to Hardy: "It was impressive that you did not laugh during the Ethics hearing."

Hardy, as we all now know, was wrangling to get a cushy job with Duke, and both men were thumbing their noses at anything resembling a professional, ethical, values-based process; they are the essence of the greedy screw-you good-old-boy network, and they have been exposed. Throw in one good old girl, since the ethics officer for the IURC, Loraine Seyfried, has been rassigned for turning a blind eye to these shenanigans.

Today's story, on Page 1, has James Turner of Duke quitting his job; he was the second-highest-paid exec at Duke, and he, too, (gasp!)  was in bed with IURC regulators. The email printed in today's Star, front page, is from Turner to Hardy. Turner wrote: "Would the ethics police have a cow if you and the woman came up some weekend?"

Good lord. Turner earned $4.3  million in 2009 -- well, earned may not be the correct word -- and he's such an idiot he sends compromising emails without, apparently, any knowledge that email and anything on the net leave footprints....not to mention the fact that he called a woman, presumably Hardy's wife, "the woman."  What a swine.

I attended IURC hearings back in the day when some folks in little Henry County were fighting a Duke energy project that was to be placed in a rural bean field, at great cost and with much opposition from neighbors; it was a flawed and financially costly concept from the get-go. Even then, it was often apparent that Duke had its way with the IURC -- this was when Bill McCarty ran the IURC show, and I had the impression he tried to be fair and hear both sides.

Credit here goes to CAC lobbyist Kerwin Olson and to Russell, for breaking and covering the heck out of this story and for not giving an inch. And even though we all "know" such back-door deals go on, it's bracing to actually see the proof, and oddly, refreshing. This is a case of truly shining light in a dark corner.

And thanks to Russell et al at the paper for printing all those emails...they are the delish icing on a rather toxic cake.




varangianguard [unverified] said:

Presuming that a reference to "the woman" (which was used by both, repeatedly) meant a wife, might be presuming too much. It might mean "the wife", yet it might not. There was already a lot of "wink, wink, nudge, nudge" going on with those two.

2010-12-07 14:08:02

ruthholl [Member] said:

I think you are right. I assumed too much -- thus making an ass out of you and me. (Old journalism lingo, ho ho).
I'm going to try to talk to the lobbyist tomorrow; maybe he will know.
At any rate, calling a companion/partner "the woman" is a bit tacky, whether she's a wife or not...
These guys are gutless and characterless.

2010-12-07 16:34:25

whosear [Member] said:

Good to see consumer advocates at work. I'll support any group that supports reasonable capitalism while at the same time working to keep the big boys from becoming a monopoly.

2010-12-07 16:39:15

hendy [Member] said:

More. More. More.

2010-12-08 01:30:44

Tell The Truth [Member] said:

More, indeed.

Ruthie, in another life, after newspapering and before my current life, I worked for the utils. I represented them on certain Clean Air Act issues in DC and at the legislature on related matters. I was one of many...I made few decisions...I was only a hired gun. I believed in the narrow set of issues I had on my plate, and I still do.

It was the most disgusting thing I've ever done in my life. I had to get out of it. The utility folks are awash with money. They openly talked about "owning" certain legislators. They spent money like drunken sailors, with apologies to drunken sailors.

I saw things on an ethical scale, that would make your hair curl. Within a few months of my seeking other employment, the feds were all over Larry Mohr (former head, Indiana Electric Association). Turns out, he owned a small aircraft fleet. He "leased" it to the CEOs of utilities, at a huge profit. He also owned part of several banks, including Carmel Bank & Trust. The improper loans those banks gave, to inside friends, were enormous, and ultimately, led to the collapse of those banks. It all fell down when regulators discovered some Mohr pals, had loans secured at two different Mohr-owned banks by the same over-valued racehorse. No, I'm not kidding. A glue factory propped up hundreds of thousands, maybe millions, in bad loans. Two or three lobbyists, Gutman and Freutenicht among them, former House leaders-turned-utility wonks, went to prison along with Mohr. They were even involved with the "reassessment' of downtown properties. They formed an reassessment appeal company, which was corrupt, too...I could go on, but you get the point.

They had a revolving door with the (then) Public Service Commission. Wink and nod was putting it mildly.

Nothing's changed. Only the faces. Remember Marble Hill? When Gov. Orr finally turned on his utility friends, they ravaged him. Traitors among those ranks were not welcome.

Ratepayers of Indiana have been paying for this playground for decades. Pardon me if I have little hope it will stop. It's a disgusting cesspool.

Everything thee guys touched, was slimy.

2010-12-08 06:40:10

ruthholl [Member] said:

Disgusting cesspool is right. The revolving door is something we all know about, from politics to cushy attorney firms and lobbyist positions. It's not a huge surprise to know that utilities are not immune, but it is a disappointment.

2010-12-08 09:24:37

sjudge [unverified] said:

You have to remember that all this started with an ALJ trying to get a job. It's first worth noting that at IURC, Judges don't make final decisions - they determine the facts and present them to the IURC, who actually does make a decision. For the most part, ALJ's in Indiana are notoriously low paid. Also almost entirely, they work for the agencies. Young lawyers talk ALJ jobs because the agencies train them, and, the jobs serve as an extended job interview for both law firms and for the regulated industry, both of which actually pay decent wages. Otherwise, these jobs would go empty. Is there a better way?


2010-12-08 11:09:49

Modern Luddite [unverified] said:


Kudos for the positive coverage on this issue. Keep up the good work.

As a point of clarification, "the woman" does refer to Hardy's wife, Sherry. In a number of chummy emails I've seen from open records requests, Sherry is cc'd and commonly signs replies as "the woman."

2010-12-08 14:30:58

ruthholl [Member] said:

Oh! How funny.
the woman

2010-12-08 20:42:09

Tell The Truth [Member] said:

sjudge, your post is welcomed, but a fact-check is in order:

True, ALJ salaries are low.

The fact is, 99.9% of the ALJ's decisions are ratified by the full commission with nary a discussion. Sometimes, by phone-conference without a single citizen in attendance.

Technically, you're correct. The ALJs do not ultimately determine what will happen--only the commission does that. By administrative rule, the commission has delegated its fact-finding role mostly to ALJs. The ALJ's written opinion or ruling, is almost always followed.

In fact, I'd challenge anyone to find an ALJ ruling that was NOT followed.

That's just the way it works.

And another fact: the ALJs are paid almost entirely by the filing fees utililties pay for their rate cases to be heard. Very little, if any, state money flows into those salary pools. If we did help pay for it via taxes, and we should, those ALJs would earn more.

The rate cases are puposely complicated. Utility attorneys are paid huge fees to make them complicated.

Kudos to the Utility Consumer Counselor's office and other interveners, who fund the challenges. Their halos are bright.

2010-12-09 10:37:45

sjudge [unverified] said:

I think you're assuming the ALJ opinion drives what the IURC does, as opposed to the IURC driving what the ALJ does - I'd be more comfortable assuming that if the ALJ were further removed from the IURC.

As to the funding, wouldn't it be cleaner if the IURC 'fees' were paid to an outside agency? If a 'pool' charged IURC for whatever it cost to hear a case, perhaps the ALJ 'pool' would be paid more?

2010-12-09 20:57:44

sjudge [unverified] said:

I think you're assuming the ALJ opinion drives what the IURC does, as opposed to the IURC driving what the ALJ does - I'd be more comfortable assuming that if the ALJ were further removed from the IURC.

As to the funding, wouldn't it be cleaner if the IURC 'fees' were paid to an outside agency? If a 'pool' charged IURC for whatever it cost to hear a case, perhaps the ALJ 'pool' would be paid more?

2010-12-09 20:57:44

sjudge [unverified] said:

not sure why the last posted twice. Perhaps I stutter? One does have to question just how the state regulates in highly technical fields. Ideally, one supposes, the state would have a group of experts rivaling those employed by those being regulated, but of course paid only a fraction of the other's pay. They would, of course, refrain from all contact with those who might have an interest in their decisions, probably including the general public as well. They would, presumably, be allowed contact with theoriticians in the general field being regulated, except of course for those having themselves have had some relationship to the fields being regulated, or, for that matter, the general public, since whatever we do regulate, we regulate for the good of the public, as expressed by whomever claims to be representing that public before them.

I probably need more coffee, this isn't going to be easy.

2010-12-10 09:21:11

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