LePage, utilities commissioner conflict over PUC recusal standards

Link to Original Article

Wednesday, July 30, 2014 | By Naomi Schalit ©Maine Center for Public Interest Reporting

A conflict over ethics between Gov. Paul LePage and a member of the state’s Public Utilities Commission has been settled in the short term, but threatens to produce more controversy over the long term.

The conflict was resolved when Gov. Lepage recently appointed former Superior Court Judge John Atwood to substitute for commission member David Littell on a high-profile case from which Littell recused himself because of a conflict of interest. That was a reversal of LePage’s earlier position, in which he refused to appoint a substitute for Littell, saying he didn’t believe Littell’s reason for recusing himself was legitimate.

The three members of the Public Utilities Commission (PUC) decide how much Mainers pay for water, telephone, electricity and natural gas service.

But LePage also said if Littell is going to recuse himself on this case, the governor has a list of eight other cases he thinks Littell should remove himself from because of similar conflicts of interest, including a prominent case mounted by citizens opposed to the use of so-called “Smart Meters” at their homes.

“The public deserves to have commissioners that do not selectively avoid cases,” wrote LePage in a letter to Littell that was accompanied by the list of cases.

In response, Littell accused LePage of improperly interfering with the PUC, an independent government agency, and “attempting to direct or influence whether a Commissioner … sits on a particular case.”

If the governor wanted to continue the discussion about his participation in cases, Littell wrote, he should raise the issue through proper Commission channels.

“I do not intend to continue this correspondence,” wrote Littell, “and suggest your office follow the legal requirements for participating in Commission cases and communicating with Commissioners on cases in front of us.”

No bias allowed

A variety of laws and rules govern the behavior of PUC commissioners. The rules are meant to prevent situations in which a commissioner appears to, or actually does, favor a former employee, family member, friend or business associate during proceedings.

The state’s Administrative Procedure Act requires that “Hearings shall be conducted in an impartial manner.” The state’s conflict-of-interest laws state that, “Every executive employee shall endeavor to avoid the appearance of a conflict of interest by disclosure or by abstention.” If a commissioner is an attorney, state Bar rules regarding conflicts apply, and the ethics code of the National Association of Regulatory Utility Commissioners also apply to all commissioners.

The argument between LePage and Littell began on May 5, when Littell recused himself from a case involving the multinational Nestle Waters corporation, saying his past association with Pierce Atwood, a prominent law firm involved in the case, created the appearance of a conflict of interest. Littell was formerly a partner at the law firm, which represents Nestle and the Fryeburg Water Co., and he worked there on legal matters for Poland Spring before the brand was acquired by Nestle.

Nestle and Fryeburg Water Co. want commission approval of a 25-year contract allowing Fryeburg to sell water to Nestle. The proposal is opposed by some residents and national water-rights advocates, who say the price Nestle will pay for the water is too low and that the deal could put Nestle’s claim on Fryeburg water ahead of residents’ right to it.

Littell was the third commissioner to remove himself from the case because of conflicts related to ties to a company or law firm. His recusal came seven months after he initially said he did not need to recuse himself, and he said his change of heart came after his potential conflict of interest was featured in news stories in the Portland Press Herald about the conflicts faced by PUC commissioners in the case.

After the first two commissioners, Mark Vannoy and Thomas Welch, recused themselves because they had each previously worked for Nestle Waters, the commission was left without a quorum of two to decide the case, and PUC consideration of the deal couldn’t go forward.

That led lawmakers to join with LePage in passing legislation this past spring that allows the governor to appoint retired judges as substitute commissioners. LePage then used his new power under the legislation and appointed retired Maine Supreme Judicial Court judge Paul Rudman to sit as an alternate commissioner with Littell on the case.

But then, when Littell recused himself, LePage responded that an appearance of a conflict wasn’t enough to disqualify Littell from participating in the case.

“By applying the standard you outlined in your memo, as Commissioner you would be unable to participate in cases ranging from telecommunications to wind development,” wrote LePage in a May 13 letter to Littell.

LePage said that he wouldn’t appoint another judge to replace Littell.

LePage’s rejection of Littell’s recusal rationale has prolonged a discussion among lawmakers and agency personnel of state policy regarding conflicts of interest at the Public Utilities Commission.

That discussion was prompted by public concerns about conflicts of interest in the Nestle case, which led, in part, to a study by the Legislature’s Office of Program Evaluation and Government Accountability. That study, released in October 2013, concluded that the “PUC should take additional steps to minimize risk of actual or perceived bias in its regulatory activities.”

LePage began his part of the discussion by threatening not to appoint a substitute commissioner and then, once he withdrew that threat, by challenging the appropriateness of Littell participating in similar cases to the Nestle-Fryeburg one.

Littell’s response was to tell the governor, “The decision to recuse myself … is my responsibility, and I continue to believe I am making an appropriate and correct decision.”

And Littell threw down his own challenge to LePage: If the governor wants Littell to recuse himself from additional cases because of conflicts between his past association with Pierce Atwood and present cases represented by the law firm, why is he not “asking the same” of the other two commissioners at the agency. PUC Chairman Welch, for example, was an attorney at Pierce Atwood before he joined the commission.

But in between the volley of letters between the two, others have weighed in, suggesting that clarification of recusal standards may be in order.

On July 8, Sen. John Cleveland, D-Auburn and Rep. Barry Hobbins, D-Saco, wrote to LePage, saying that “we are committed to work to make changes, if necessary, to further refine the legislation” that gave the governor the power to appoint replacement commissioners in the event of a recusal.

LePage agrees that something should be done, and in his letter appointing Atwood to replace Littell, told the PUC that, “I will be submitting legislation in the next session that ensures that this does not occur again and recusal standards are consistently applied.”

And despite his boss’s confrontational approach, LePage’s top energy staffer, Patrick Woodcock, took a more conciliatory tack.

“I think the governor was concerned that perhaps a new standard was being used to explain this specific recusal and there are a lot of controversial cases before the PUC, lots of cases involving the former law firm that the commissioner worked at,” said Woodcock. “I think everybody, all of us, should work to create a consistent and clear and understandable recusal standard.”

The Maine Center for Public Interest Reporting is a nonpartisan, non-profit news service based in Augusta. Email: pinetreewatchdog@gmail.com. Web: pinetreewatchdog.org.

 

 

ACTION ALERT: TELL PUC NO DEALS WITH NESTLÉ IN FRYEBURG

We’ve just learned that the private Fryeburg Water Company wants to seal a
deal with Nestlé/Poland Spring to guarantee that Nestlé buys at least 75
million gallons of spring water per year for the next 25 years with the option
to extend for up to four additional five-year terms – a total of 45 years.According to a news story in the Conway Daily Sun on Friday, “The two
companies have had a state-approved agreement since 2008, but the proposed
changes mean the agreement will need to be reviewed by the Maine Public
Utilities Commission.”The newspaper reports:  “The PUC announced it is currently accepting public
comment on the proposal. The comment period is open through Sept. 4.”

There are many reasons to oppose a private contract requiring Nestlé to buy
“at least 75 million gallons per year.”  Of particular concern, because it includes Nestlé drilling an additional well.  But the first step is to call for an extension of time for public comment and for a public hearing.

ACT TODAY!

Call PUC Attorney Matthew Kaply (207) 287-1368 who is in charge of this case
and demand that the public comment period be extended at least to the end of
September.  Also call for a public hearing.

You can also sign in as a registered public user on the PUC website and post
specific comments which will go to the staff and Commissioners.
http://www.maine.gov/mpuc/online/index.shtml  The case number is 2008-00052.

Here are a few talking points.
•       The public comment period must be extended at least to the end of
September. The original period of two weeks during peak vacation time and over
Labor Day weekend is totally unacceptable.

•       The issues need to be aired in a public hearing, not just hidden away
on the PUC website.

•       PUC Chairman Thomas Welch and Commissioner Littell should recuse
themselves from this case due to their past association with Pierce, Atwood
which has a long history of representing Nestlé.  Commissioner Littell was an
attorney at Pierce, Atwood from 1992-2003, the last four years as a partner.

•       Water is a fundamental right for people and nature.   Nestlé’s profit should not come before these fundamental rights. This agreement includes Nestle’s drilling of an additional well.

•       Only the Fryeburg Water Company will get to decide if there is a water
shortage in Fryeburg allowing less water to be sold to Nestlé, not the local
residents or businesses. Then only for 60 days! FWC has a financial interest
in denying there is any shortage.  Town residents and local businesses will
suffer while Nestlé will have its guaranteed 75 million gallons per year to
bottle and ship around the country.

•       This proposed 25-year contract would set a precedent for the state.
Nestlé could refer to this in future cases anywhere in the state.

•       The PUC must reject this proposed agreement.Here is the url for a pdf of the filed agreement.https://mpuc-cms.maine.gov/CQM.Public.WebUI/MatterManagement/MatterFilingItem.aspx?FilingSeq=72309&CaseNumber=2008-00052

Thanks! Ruth and Chris

###

Here is an example letter submitted by Lisa S:

Water is a fundamental right for the people of Maine and their grandchildren, for the fish and other wildlife in our state, and for the farmers who feed us all.Fresh, potable water will surely become the scarcest resource on the planet during the 21st century. Allowing corporations to gain access to Maine’s incredible aquifer for profits to benefit their shareholders does not and should not come before these fundamental rights.The issues around allowing the Nestlé corporation broader access to pumping out and bottling Maine’s water as a consumer product are fundamental to life as we have known it here.

Therefore, the public comment period for Case 2008-00052 must be extended at least to the end of September, 2012. The original period of two weeks during peak vacation time and over Labor Day weekend is unacceptable. Further, it creates the impression that the Maine PUC is attempting to limit public input into this important decision.

Also, PUC Chairman Thomas Welch and Commissioner Littell should recuse themselves from this case due to their past association with Pierce, Atwood which has a long history of representing Nestlé.  Commissioner Littell was an attorney at Pierce, Atwood from 1992-2003, the last four years as a partner.

Under the proposed change, only the Fryeburg Water Company (FWC) would have the power to decide if there is a water shortage in Fryeburg allowing less water to be sold to Nestlé. Local residents and businesses would have no say in how to manage future water shortages.

Note that FWC has a financial interest in denying there is any shortage, so that town residents and local businesses could suffer water shortages while Nestlé enjoyed its guaranteed 75 million gallons per year to bottle for profit.

This proposed 25-year contract would set a precedent for the state. Nestlé could refer to this in future cases anywhere in the state. This suggests itself as a reason why the contract is being rushed through the PUC approval process.

ACTION ALERT: TELL PUC NO DEALS WITH NESTLÉ IN FRYEBURG

We’ve just learned that the private Fryeburg Water Company wants to seal a
deal with Nestlé/Poland Spring to guarantee that Nestlé buys at least 75
million gallons of spring water per year for the next 25 years with the option
to extend for up to four additional five-year terms – a total of 45 years.According to a news story in the Conway Daily Sun on Friday, “The two
companies have had a state-approved agreement since 2008, but the proposed
changes mean the agreement will need to be reviewed by the Maine Public
Utilities Commission.”The newspaper reports:  “The PUC announced it is currently accepting public
comment on the proposal. The comment period is open through Sept. 4.”

There are many reasons to oppose a private contract requiring Nestlé to buy
“at least 75 million gallons per year.”  Of particular concern, because it includes Nestlé drilling an additional well.  But the first step is to call for an extension of time for public comment and for a public hearing.

ACT TODAY!

Call PUC Attorney Matthew Kaply (207) 287-1368 who is in charge of this case
and demand that the public comment period be extended at least to the end of
September.  Also call for a public hearing.

You can also sign in as a registered public user on the PUC website and post
specific comments which will go to the staff and Commissioners.
http://www.maine.gov/mpuc/online/index.shtml  The case number is 2008-00052.

Here are a few talking points.
•       The public comment period must be extended at least to the end of
September. The original period of two weeks during peak vacation time and over
Labor Day weekend is totally unacceptable.

•       The issues need to be aired in a public hearing, not just hidden away
on the PUC website.

•       PUC Chairman Thomas Welch and Commissioner Littell should recuse
themselves from this case due to their past association with Pierce, Atwood
which has a long history of representing Nestlé.  Commissioner Littell was an
attorney at Pierce, Atwood from 1992-2003, the last four years as a partner.

•       Water is a fundamental right for people and nature.   Nestlé’s profit should not come before these fundamental rights. This agreement includes Nestle’s drilling of an additional well.

•       Only the Fryeburg Water Company will get to decide if there is a water
shortage in Fryeburg allowing less water to be sold to Nestlé, not the local
residents or businesses. Then only for 60 days! FWC has a financial interest
in denying there is any shortage.  Town residents and local businesses will
suffer while Nestlé will have its guaranteed 75 million gallons per year to
bottle and ship around the country.

•       This proposed 25-year contract would set a precedent for the state.
Nestlé could refer to this in future cases anywhere in the state.

•       The PUC must reject this proposed agreement.Here is the url for a pdf of the filed agreement.https://mpuc-cms.maine.gov/CQM.Public.WebUI/MatterManagement/MatterFilingItem.aspx?FilingSeq=72309&CaseNumber=2008-00052

Thanks! Ruth and Chris

###

Here is an example letter submitted by Lisa S:

Water is a fundamental right for the people of Maine and their grandchildren, for the fish and other wildlife in our state, and for the farmers who feed us all.Fresh, potable water will surely become the scarcest resource on the planet during the 21st century. Allowing corporations to gain access to Maine’s incredible aquifer for profits to benefit their shareholders does not and should not come before these fundamental rights.The issues around allowing the Nestlé corporation broader access to pumping out and bottling Maine’s water as a consumer product are fundamental to life as we have known it here.

Therefore, the public comment period for Case 2008-00052 must be extended at least to the end of September, 2012. The original period of two weeks during peak vacation time and over Labor Day weekend is unacceptable. Further, it creates the impression that the Maine PUC is attempting to limit public input into this important decision.

Also, PUC Chairman Thomas Welch and Commissioner Littell should recuse themselves from this case due to their past association with Pierce, Atwood which has a long history of representing Nestlé.  Commissioner Littell was an attorney at Pierce, Atwood from 1992-2003, the last four years as a partner.

Under the proposed change, only the Fryeburg Water Company (FWC) would have the power to decide if there is a water shortage in Fryeburg allowing less water to be sold to Nestlé. Local residents and businesses would have no say in how to manage future water shortages.

Note that FWC has a financial interest in denying there is any shortage, so that town residents and local businesses could suffer water shortages while Nestlé enjoyed its guaranteed 75 million gallons per year to bottle for profit.

This proposed 25-year contract would set a precedent for the state. Nestlé could refer to this in future cases anywhere in the state. This suggests itself as a reason why the contract is being rushed through the PUC approval process.