Monday, January 17, 2011

Daniels' Disturbing Relationship With Jerry Slusser

The Northwest Indiana Times research of e-mails between IURC officials reveal the disturbingly close relationship of Gov. Mitch Daniels to controversial Las Vegas businessman Jerry Slusser, who has been cited for financial hijinks in the past. Slusser's name surfaced during last year's Marion Co. prosecutor's race when questions were raised about why Republican candidate Mark Massa, who previously served as Daniels' chief legal counsel, was accepting large campaign contributions from a controversial businessman like Slusser with a past all too similar with that of Ponzi scheme operator Tim Durham, whose close ties to former prosecutor Carl Brizzi helped sink his political career. It turned out Slusser had donated hundreds of thousands of dollars to Daniels and allowed him to use his personal aircraft during his political campaigns, a point picked up on by the Times. E-mails between IURC officials shed more light on Daniels' close ties to Slusser. The Times reports:

E-mails obtained by The Times show that when a generous campaign contributor and friend of Gov. Mitch Daniels came calling, state regulators knew just who they were dealing with and hoped their effort would be recognized.

In the e-mails, an Indiana Utility Regulatory Commission staffer points out the political connections of Indianapolis businessman Jerry Slusser as he scrambles to set up a meeting between Slusser, Commissioner Jim Atterholt and staff at the Midwest Independent Transmission System Operator (MISO).

IURC staffer Robert Pauley e-mailed David Hadley, MISO vice president of state regulatory relations, on June 29: "This guy is a friend of the Governor's, Mark Lubbers, et al. He also has some times (sic) to Mr. Rosenberg's gasification's proposals."

Lubbers was a reference to Mark Lubbers, Gov. Mitch Daniels former political director. Rosenberg is William Rosenberg, president of Indiana Gasification LLC, which is developing a coal gasification plant in Spencer, Ind.

Slusser has been a prominent Daniels campaign contributor, donating $116,936 to the Mitch for Governor Campaign between 2004 and 2008, according to campaign contribution data at the Indiana Secretary of State's website. Slusser also donated $94,107 to Daniel's political action committee Aiming Higher, which played a key role in returning a Republican majority to the Indiana House in the fall elections.

Slusser did not return phone messages requesting an interview left at the jet charter company he owns, Vitesse Aviation Services, in Greenfield, Ind.

It is standard practice for the IURC to meet with other agencies and people interested in job creation and economic development, said IURC spokeswoman Danielle McGrath in response to a Times inquiry.

She said that Pauley's characterization of Slusser as a friend of the governor was Pauley's own and not the agency's. The July 14 meeting was initiated by the Indiana Economic Development Corp., McGrath said.

The grassroots consumer group Citizens Action Coalition said the e-mails, with their reminders of just who meeting participants will be dealing with, demonstrate how beholden the IURC is to the governor. The governor appoints all five commission members and names the chairperson.

"They don't even see themselves as a regulatory body. They see themselves as a policy body for carrying out the governor's wishes, and that's always been the problem," said Kerwin Olson, utility campaign organizer for the Citizens Action Coalition.

The e-mails were provided to the The Times Media Co. by the IURC after the company made a a public records request.

According to the e-mails, Slusser wanted to power small electric generators using natural gas from wastewater treatment facilities. To sell the power, he needed to find a means of tying his generating plants into the transmission grid.

In the end, Commissioner Atterholt did not attend the July 14 meeting with Slusser because of a scheduling conflict. He had already attended an earlier meeting with the developer, according to the e-mails.

Pauley attended the July 14 meeting at the MISO. He has since left the IURC to work for a federally funded study group seeking to improve the reliability and efficiency of grid transmissions.

When contacted by The Times last month, he said Slusser himself made a point of informing people at the meeting he was a friend of the governor.

Just after the meeting concluded, Pauley e-mailed MISO officials: "I know your efforts 'pay off' with our Commissioners. I hope your efforts are more widely recognized by the Governor's office."
This latest revelation takes the misdeeds happening at the IURC directly to Gov. Daniels and the IEDC, which is run by Mitch Roob, who caused plenty of controversy over his efforts to direct the privatization of FSSA's welfare services when he ran that agency to ACS, his former employer. How can Gov. Daniels possibly explain why he has maintained a close relationship with Slusser after his past controversial business dealings? The Times apparently didn't realize Slusser's controversial past when it stumbled on to these e-mails or it would have focused on those issues, as well as the large amount of contributions he has made to Daniels. Here is what Time magazine wrote about Slusser a few years back:

With some exceptions, the 21st century version of synthetic-fuel plants uses competing coal-altering processes developed by a handful of companies, which make money by licensing their technology. One is Earthco, a mysterious Las Vegas enterprise whose technology is used in 10 plants in six states. An Earthco founding principal was Jerry W. Slusser, 57, who has been involved in a string of curious businesses. In 1998 a Commodity Futures Trading Commission judge found that Slusser and two of his companies "pilfered millions of dollars from customers using the commodities market to carry out their scheme." Some of the money was funneled through accounts of Slusser's Sterling International Bank Ltd., which existed as a post office drop on the Caribbean island of Montserrat. The commission barred Slusser and his firms from trading commodity futures and assessed a $10 million penalty, the largest ever in an administrative hearing. A U.S. appeals court, while acknowledging there had been "multiple frauds," reduced the fines to $600,000, which Slusser has again appealed.

The investor's home in a gated country-club community just off the Las Vegas strip is also the official address of more than 80 Slusser-related business ventures with names like 481TL LLC, CCHDDNV Inc., N15SB LLC and QEAT4 LLC. With their principals scattered across the country, the companies have the appearance of being tax-avoidance devices, just like the synfuels scheme. What, if anything, does Earthco's synfuel process do? Calls for information to Earthco and its employees were fruitless. When TIME reached Slusser, he promptly hung up the telephone after hearing the writer identify himself. A call to Earthco's office in Las Vegas proved equally unproductive. A woman who identified herself as Susan Trimboli said any questions would have to be answered by a Jim Scott in Sacramento, Calif. He turned out to be James Scott, who works out of Earthco's Las Vegas office. He is the president of Mid-Power Service Corp., another Las Vegas energy business. Until two weeks ago it was in bankruptcy court. Scott did not return calls, but Mark Davis, a Sacramento attorney and Scott associate, did. Asked about Slusser's current connection with Earthco, Davis replied, "The answer is zero. Neither as a shareholder, officer—no capacity whatsoever." But Davis declined to discuss Slusser's earlier involvement, the nature or origin of Earthco's technology or how it has reduced American dependence on foreign oil. "That's really all I have to say," he said.
Tell us it ain't so, Mitch.

Read about IURC's clubby relationship with NiSource here and its clubby relationship with Duke Energy execs here, here, here, here and here.


Bradley said...

Oh, it be so I think. The big question now will be if anyone else picks-up on it and the faux-facade of good "ethics" around the governor, that so many people know about, begins to crumble -- even as the majority of people in this state pretend the Teflon Guv is actually a good guy who is doing good work for the benefit of us lesser Hoosiers.

interestedparty said...

Is Mark Lubbers related to Teresa Lubbers, former legislator and present higher ed commissioner?

Gary R. Welsh said...

They're married, interestparty.