Memo from David Pippen, general counsel to Gov. Daniels
To: All Agency Heads/General Counsels
From: David Pippen, General Counsel to the Governor
Re: Ethics
Recently, a former general counsel and administrative law judge
(ALJ) for the Indiana Utility Regulatory Commission left state
government to work for Duke Energy of Indiana, a regulated entity.
I wrote a letter to the IURC explaining the Governor's
interpretation of the spirit and intention of the ethics reform he
spearheaded when he came to office. In short, he will not tolerate
even the appearance of impropriety.
Upon the Governor's direction, an internal review of the matter
revealed the lawyer was communicating with Duke regarding a
position with the company at a time he was presiding over
administrative hearings concerning Duke. Additionally, the agency
head was aware of the communications and did not remove the lawyer
from matters for which the lawyer was now conflicted.
So you understand the seriousness of this matter, I want you to
know our response:
1. The Governor has terminated the employment of the chairman of
the IURC;
2. The administrative opinions over which the ALJ presided
regarding Duke will be reopened and reviewed to ensure no undue
influence was exerted in the decisions;
3. The one-year cooling off period for decision makers are to be
considered to include ALJs who preside over information gathering
and order drafting; and
4. The matter has been referred to the Inspector General to
determine if any laws were broken or misinformation given to the
Ethics Commission when requesting a formal opinion;
To reiterate the ethics rules as they relate to regulated
entities:
1. No ALJ should engage in communications with regulated
entities regarding possible employment without recusing oneself
from matters appearing before that regulator;
2. Administrative opinions over which an ALJ presided while
pursuing employment opportunities with the regulated entity will be
reopened and reviewed to ensure no undue influence was exerted in
the decision;
3. The one-year cooling off period for decision makers includes
ALJs who preside over information gathering and order drafting;
and
4. Violations of these points will be referred to the Inspector
General.
Please advise your staff to avoid this circumstance in the
future.
INDIANAPOLIS | Gov. Mitch Daniels fired the chairman of the
state's utility regulating agency Tuesday for an appearance of
impropriety in how he handled the recent departure of an agency
lawyer to work for Duke Energy.
The termination of David Lott Hardy, chairman of the Indiana
Utility Regulatory Commission, is effective immediately, the
governor said. Daniels named IURC Commissioner Jim Atterholt the
new chairman.
The firing follows the departure of IURC general counsel Scott
Storms, who left for a job with Duke Energy of Indiana in
September, according to a statement from the governor's office.
An internal review by the governor's office found that Storms
was talking with Duke about taking a job there while still serving
as an IURC administrative law judge hearing cases involving
Duke.
Hardy knew Storms was communicating with Duke about a job and
did not remove Storms from Duke-related cases, said David Pippen,
general counsel to the governor.
Shortly after the governor's announcement, Duke Energy said it
was placing Storms and Duke Indiana President David Reed, a former
director of the IURC, on administrative leave pending a full review
of Storms' hiring by outside counsel.
Reed left his post as commissioner of the Indiana Department of
Transportation to become president of Duke Indiana earlier this
year. Before his INDOT job, Reed was executive director of the IURC
from September 2006 to February 2009.
Shortly after Storms was hired by Duke, Daniels sent a letter to
Hardy outlining expectations of the IURC in upholding a formal
ethics opinion on the matter.
That opinion was cited on Tuesday by Duke Energy in defense of
its hiring of Storms.
"Duke Energy Indiana hired Mr. Storms after receiving a formal
opinion from the Indiana Ethics Commission clearing him to work at
Duke Energy with certain limitations that we have complied with and
gone beyond," the company stated in a release Tuesday.
"Nevertheless, because of the recent announcement by Indiana's
Governor's Office regarding this matter, we have launched our own
internal review to thoroughly examine those questions."
Duke Energy said it will cooperate fully with the Indiana
inspector general's investigation of the matter as well as the
IURC's review of recent cases it ruled on regarding Duke
Energy.
