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.
They also show that the friendly relationship between Duke and Indiana regulators, which resulted in the firing of Duke's Indiana president, Mike Reed, in an ethics scandal earlier this month, extended all the way to Duke's headquarters in North Carolina.
Turner is one of Duke Energy's top executives, responsible for the company's regulated business segment, which is Duke's largest, and for legislative and regulatory strategy and rates. He oversees a vast portfolio, with responsibility for power delivery, gas distribution, customer service and several other functions.
Last year, Turner earned a salary of $650,000, plus stock awards, cash incentives and other compensation worth a total of $4.35 million. That made him second in total compensation only to Chairman and CEO James Rogers, whose package was valued at $6.93 million, according to the company's proxy filing.
That made him far better paid than Hardy, the man he spent hours cajoling by e-mail. Hardy made $109,000 as chairman of the Indiana Utility Regulatory Commission. He was fired in October by Gov. Mitch Daniels in what has become a major ethics scandal for the state, after the IURC's general counsel, Scott Storms, accepted a job to work for Duke as a regulatory lawyer . . .
The FBI is investigating, according to the IURC, and Daniels has ordered an investigation into all Duke cases that might have been tainted by Storms' activities . . .
Turner, once Indiana's utility consumer counselor, did not return a call made to his cell phone Friday to discuss his e-mails or his close relationship with Hardy.
As Russell's story mentions, Turner once worked as the utility consumer counselor for the IURC back during the Bayh years, which is why I think this investigation will go nowhere as long as U.S. Attorney Joe Hogsett has any say. Hogsett is close to top officials at Duke and to Kip Tew, a former Duke official and lobbyist for the utility. Tew still lobbies for Duke as an attorney at Krieg DeVault. Tew headed up Barack Obama's presidential campaign in Indiana and played a key role in Hogsett's appointment as U.S. Attorney. Practically everyone associated with Evan Bayh, including Bayh himself, have always been in bed with top Duke officials, dating back to the days when the company was known as Public Service of Indiana (PSI).
Make no mistake about it. The people at the IURC who should to be representing the public's interest were/are bought and paid for by the regulated. This has always been the case. The only people who ever get appointed to any position of significance with the IURC are tight with officials of one of the utilities. That is the way it has been under Republican and Democratic governors alike. Former Lt. Gov. John Mutz served as president of PSI Indiana after leaving public office. Last week, Russell had a story discussing applicants for the open position created by the firing of IURC Chairman David Hardy. Russell's story noted how three of the four current commissioners have ties to utilities:
James D. Atterholt, a commissioner since 2009 who succeeded Hardy as chairman in September, formerly worked as a lobbyist for AT&T Indiana, which is regulated by the IURC. He has a long political resume, having served as Indiana state insurance commissioner; a special assistant for U.S. Rep. Dan Burton, R-Ind.; and an Indiana state representative seated on the committee overseeing utility legislation.Russell's story notes Hardy, a Fort Wayne attorney, worked for Duke while it was known as PSI before he was appointed by Gov. Daniels to serve as the IURC's chairman. Several of the 12 applicants for the open position created by Hardy's departure have ties to the utilities as well. Even Gov. Daniels once served on the board of Indianapolis Power & Light, a position that made him millions when the company sold out to an out-of state utility, AES. Whether Democrats or Republicans are in charge, it simply does not matter. Only the people who advocate for utilities have a voice at the IURC.
Larry S. Landis, a commissioner since 2002, once worked at the former marketing firm of Handley & Miller, whose clients included AT&T Indiana. He also had worked as a campaign aide in Richard Lugar's first Indianapolis mayoral race, and later as a vice president for advertising at American Fletcher Corp., now part of JP Morgan Chase.
Carolene R. Mays, a commissioner since February, comes from a family with utility ties. Her father, the late Theodore Clarence Mays Jr., served on the board of directors at Vectren, an Evansville gas and electric utility. Her uncle is a principal in BMHH Energy Services, which was awarded a recent bid by the Indianapolis International Airport board to build and run an airport electric plant. BMHH includes Citizens Energy Services, a subsidiary of Indianapolis-based Citizens Gas & Coke, a utility regulated by the IURC. Mays was previously the publisher and president of the Indianapolis Recorder newspaper and the Indiana Minority Business magazine.
David E. Ziegner, a commissioner since 1990, has made the IURC a career. He previously served as a staff attorney for the Legislative Services Agency and was general counsel for the IURC.