Mongiardo Files Ethics Complaint Against Attorney General Conway –

The following excerpts are taken from the complaint filed by U.S. Senate Candidate Dan Mongiardo against candidate and Attorney General Jack Conway.   The complaint was filed with the Executive Branch Ethics Commission on May 4, 2010.

Allison Hayley of the Conway campaign responds: “These accusations are baseless and false.  Even the Courier-Journal’s Al Cross called them trumped up.  This is just another act of desperation by a campaign whose support is just slipping away,” she said.

Though the Public Service Commission is the regulatory agency which rules on rate hikes and adjustments, an office under Kentucky’s Attorney General is designed to represent the interests of consumers before such governmental rate making agencies.

The complaint raises a issue that an attorney general as an attorney should not accept political contributions from persons he is litigating against. 

Mongiardo press release:

FRANKFORT — Lt. Governor and Democratic Senate candidate Dr. Daniel Mongiardo today filed a formal complaint against Attorney General Jack Conway with the Executive Branch Ethics Commission stating that Conway has “violated the public trust” by accepting over $70,000 in campaign contributions from utility companies, their executives, and lobbyists while approving millions in rate hikes.

In addition, the complaint charges Conway’s approval of higher rates for Atmos Energy financially benefits Conway, since Atmos Energy is a business partner of Kinder Morgan, a Texas natural gas company, in which Conway has invested millions.

The complaint asks the Ethics Commission for an expedited ruling on both matters as Kentucky Utilities and Louisville Gas & Electric have formally filed a $262 million rate hike request with the Public Service Commission and their request is currently pending action by the Attorney General.

“Attorney General Conway’s duty is to represent rate payers-not big utility companies. It is a clear conflict of interest for Attorney General Conway who is supposed to negotiate rate increases on behalf of Kentucky rate payers to have accepted over $70,000 in campaign contributions from utility companies he is negotiating with,” said Mongiardo, who held a news conference in front of the Ethics Commission.

“By approving rate increases for Atmos Energy, Attorney General Conway also financially benefits, since Conway has invested millions in Kinder Morgan, a Texas natural gas company which is a business partner with Atmos. The better Atmos Energy does, the better Kinder Morgan does, the better Jack Conway does,” said Mongiardo.

Mongiardo listed examples that he believes constitute violations of Kentucky ethics laws, specifically KRS 11A.005(1)(a)–:

  • In January, 2009, Attorney General Conway personally approved a $22 million negotiated rate increase for Louisville Gas & Electric (LG&E), a subsidiary of utility giant E.On. Before January 2009, Conway was actively considering a race for U.S. Senate. In fact, within weeks of formally announcing his candidacy for U.S. Senate, the Attorney General solicited and accepted thousands of dollars in campaign contributions from LG&E executives and their registered lobbyists. Does the fact that the Attorney General solicited/accepted campaign contributions from the utility executives and registered lobbyists of E.On/LG&E for which he/his office negotiated and approved a $22 million rate increase constitute a violation of KRS 11A? Does it constitute a conflict of interest or the appearance of a conflict of interest?
  • In June 2009, Attorney General Conway solicited and/or accepted nearly $10,000 in campaign contributions from the executives and registered lobbyists with Atmos Energy, a gas utility company based in Texas that serves 176,000 gas customers in 32 Western Kentucky counties. After accepting thousands in campaign donations from Atmos executives and their registered lobbyists, Attorney General Conway once again personally approved a negotiated multi-million ($5.9 million) dollar rate increase. Does the fact that the Attorney General solicited/accepted campaign contributions from the utility executives and registered lobbyists of Atmos Energy for which he/his office negotiated and approved a $5.9 million rate increase constitute a violation of KRS 11A? Does it constitute a conflict of interest or the appearance of a conflict of interest?
  • While Attorney General Conway and or his office staff was negotiating the $5.9 million rate increase for Atmos Energy, Conway failed to disclose the fact that Atmos Energy – with whom he/his office was negotiating – has a business partnership with a Texas-based energy company called Kinder-Morgan. According to Attorney General Conway’s Personal Financial Disclosure statements filed with this Commission and with the Secretary of the United States Senate, the Attorney General has up to $5 million dollars invested in Kinder-Morgan – 90% of his entire stock investment portfolio.
  • Does the fact that a business in which the Attorney General has invested millions of dollars directly or indirectly benefits as a result of the actions taken by the Attorney General constitute a violation of KRS 11A? Does the fact that the Attorney General failed to publicly disclose his financial interest in Kinder-Morgan, a business partner with Atmos Energy for whom Attorney General Conway approved a negotiated $5.9 million rate increase that directly or indirectly benefited from the actions taken by the Attorney General and his office constitute a violation of KRS 11A?
  • Earlier this year, LG&E and KU formally applied for rate increases with the PSC totaling $262 million. It is unclear at the time of this complaint whether or not the Attorney General or his staff has entered into settlement negotiations with either KU or LG&E. What is clear is that there are on-going public hearings being held across this Commonwealth to solicit public comment regarding their $262 million rate increase request. It is also clear that registered lobbyists for LG&E and KU hosted a fundraiser – while LG&E’s and KU’s rate increase request is pending.
  • Does the fact that the Attorney General attended and accepted campaign contributions at a fundraiser hosted by the registered lobbyists of LG&E and KU, while their rate increase request is pending constitute a violation of KRS 11A? Does it represent a conflict of interest or the appearance of a conflict of interest? Given the fact that the Attorney General profited from a campaign fundraiser hosted by registered lobbyists for LG&E and KU while their $262 million rate increase request is pending, should the Attorney General publicly recuse himself from having any direct or indirect involvement in negotiating with the utilities’ representatives or from approving any possible negotiated rate increase that may result from efforts by his Office of Rate Intervention?

To read the full letter and download a PDF of the supporting documents click here . 

FRANKFORT — Lt. Governor and Democratic Senate candidate Dr. Daniel Mongiardo today filed a formal complaint against Attorney General Jack Conway with the Executive Branch Ethics Commission stating that Conway has “violated the public trust” by accepting over $70,000 in campaign contributions from utility companies, their executives, and lobbyists while approving millions in rate hikes.

In addition, the complaint charges Conway’s approval of higher rates for Atmos Energy financially benefits Conway, since Atmos Energy is a business partner of Kinder Morgan, a Texas natural gas company, in which Conway has invested millions.

The complaint asks the Ethics Commission for an expedited ruling on both matters as Kentucky Utilities and Louisville Gas & Electric have formally filed a $262 million rate hike request with the Public Service Commission and their request is currently pending action by the Attorney General.

“Attorney General Conway’s duty is to represent rate payers-not big utility companies. It is a clear conflict of interest for Attorney General Conway who is supposed to negotiate rate increases on behalf of Kentucky rate payers to have accepted over $70,000 in campaign contributions from utility companies he is negotiating with,” said Mongiardo, who held a news conference in front of the Ethics Commission.

“By approving rate increases for Atmos Energy, Attorney General Conway also financially benefits, since Conway has invested millions in Kinder Morgan, a Texas natural gas company which is a business partner with Atmos. The better Atmos Energy does, the better Kinder Morgan does, the better Jack Conway does,” said Mongiardo.

Mongiardo listed examples that he believes constitute violations of Kentucky ethics laws, specifically KRS 11A.005(1)(a)–:

  • In January, 2009, Attorney General Conway personally approved a $22 million negotiated rate increase for Louisville Gas & Electric (LG&E), a subsidiary of utility giant E.On. Before January 2009, Conway was actively considering a race for U.S. Senate. In fact, within weeks of formally announcing his candidacy for U.S. Senate, the Attorney General solicited and accepted thousands of dollars in campaign contributions from LG&E executives and their registered lobbyists. Does the fact that the Attorney General solicited/accepted campaign contributions from the utility executives and registered lobbyists of E.On/LG&E for which he/his office negotiated and approved a $22 million rate increase constitute a violation of KRS 11A? Does it constitute a conflict of interest or the appearance of a conflict of interest?
  • In June 2009, Attorney General Conway solicited and/or accepted nearly $10,000 in campaign contributions from the executives and registered lobbyists with Atmos Energy, a gas utility company based in Texas that serves 176,000 gas customers in 32 Western Kentucky counties. After accepting thousands in campaign donations from Atmos executives and their registered lobbyists, Attorney General Conway once again personally approved a negotiated multi-million ($5.9 million) dollar rate increase. Does the fact that the Attorney General solicited/accepted campaign contributions from the utility executives and registered lobbyists of Atmos Energy for which he/his office negotiated and approved a $5.9 million rate increase constitute a violation of KRS 11A? Does it constitute a conflict of interest or the appearance of a conflict of interest?
  • While Attorney General Conway and or his office staff was negotiating the $5.9 million rate increase for Atmos Energy, Conway failed to disclose the fact that Atmos Energy – with whom he/his office was negotiating – has a business partnership with a Texas-based energy company called Kinder-Morgan. According to Attorney General Conway’s Personal Financial Disclosure statements filed with this Commission and with the Secretary of the United States Senate, the Attorney General has up to $5 million dollars invested in Kinder-Morgan – 90% of his entire stock investment portfolio.
  • Does the fact that a business in which the Attorney General has invested millions of dollars directly or indirectly benefits as a result of the actions taken by the Attorney General constitute a violation of KRS 11A? Does the fact that the Attorney General failed to publicly disclose his financial interest in Kinder-Morgan, a business partner with Atmos Energy for whom Attorney General Conway approved a negotiated $5.9 million rate increase that directly or indirectly benefited from the actions taken by the Attorney General and his office constitute a violation of KRS 11A?
  • Earlier this year, LG&E and KU formally applied for rate increases with the PSC totaling $262 million. It is unclear at the time of this complaint whether or not the Attorney General or his staff has entered into settlement negotiations with either KU or LG&E. What is clear is that there are on-going public hearings being held across this Commonwealth to solicit public comment regarding their $262 million rate increase request. It is also clear that registered lobbyists for LG&E and KU hosted a fundraiser – while LG&E’s and KU’s rate increase request is pending.
  • Does the fact that the Attorney General attended and accepted campaign contributions at a fundraiser hosted by the registered lobbyists of LG&E and KU, while their rate increase request is pending constitute a violation of KRS 11A? Does it represent a conflict of interest or the appearance of a conflict of interest? Given the fact that the Attorney General profited from a campaign fundraiser hosted by registered lobbyists for LG&E and KU while their $262 million rate increase request is pending, should the Attorney General publicly recuse himself from having any direct or indirect involvement in negotiating with the utilities’ representatives or from approving any possible negotiated rate increase that may result from efforts by his Office of Rate Intervention?

To read the full letter and download a PDF of the supporting documents click here .

 

 

       

/s/ Dan Mongiardo

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