Miami Herald: Public Service Commission lobbyist flagged for ‘poor judgment’

This article was published in the Miami Herald on September 3, 2009

BY MARY ELLEN KLAS
Herald/Times Tallahassee Bureau

As state police investigate the Public Service Commission for possible ethics violations, an inspector general found Wednesday that the agency’s lobbyist used “poor judgment” and may have violated rules by attending a party at the home of a Florida Power & Light executive during a pending rate case.

Although the PSC inspector general could not prove whether lobbyist Ryder Rudd broke PSC rules on gifts and communication by attending the Kentucky Derby party, a state senator and a PSC commissioner immediately called for his ouster.

“The inexcusable conduct of this employee undermines the public trust and confidence in the regulatory process and impugns the integrity of this commission,” Commissioner Nathan Skop wrote in a statement. “This is a clear cut ethics problem and perception issue.”

Rudd has defended his attendance at the party, saying he was “information gathering” — a defense roundly rejected by state Sen. Mike Fasano, R-New Port Richey.

“He doesn’t believe he has done anything wrong . . . Why are you wining and dining with an executive of a company who is asking for a 30 percent rate increase?” Fasano said.

The report comes a day after PSC commissioners and staff director Mary Bane told the Herald/Times that commissioners and some PSC staff are being interviewed by the Florida Department of Law Enforcement for potential violations of state laws that prohibit commissioners and their staff from communicating or accepting anything of value from the utilities they regulate.

PSC rules prohibit commissioners and their staff from accepting anything of value from the utilities they regulate, and state law bans commissioners from discussing rate cases with representatives of utility companies.

In Rudd’s case, he attended a party at the Palm Beach Gardens home of Ed Tancer, an FPL vice president. He told the inspector general that he paid Tancer $50 in cash one day after the May 2 party to compensate Tancer for food and drink Rudd and his wife consumed — but he said no receipt or documentation was made.

The report by PSC Inspector General Steven Stolting said Rudd stayed at Tancer’s party for about 90 minutes, with about 300 people in attendance. Tancer told Stolting that he considered Rudd a friend and did not specify when he received the reimbursement.

Rudd made no mention of the payment when contacted by a Herald/Times reporter on Aug. 21, though he acknowledged attending the party.

He said he and his wife were in Miami for the weekend and stopped in “briefly” at Tancer’sparty as part of his attempts to gather information about the industry issues.

“I do as much information-gathering as possible,” Rudd told the Herald/Times in August.

“It was a good opportunity to meet people who are pushing some of the issues I’m following.”

In the report, Stolting noted that Rudd felt “in hindsight . . . his attendance at the party was not a good decision.”

An ethics complaint filed in May by Tallahassee businessman Steven Stewart accuses PSC Commissioner Lisa Edgar of violating state ethics laws by allegedly using her aide as an intermediary to discuss a pending PSC issue with FPL executive Ken Hoffman.

Edgar denied any wrongdoing Wednesday. “There was no inappropriate or illegal communication,” she said.

According to Fasano, when Edgar was seeking confirmation by the state Senate for her reappointment to the commission, Rudd worked closely with her, escorting her to senators’ offices.

At the same time, Rudd was in frequent contact with utility lobbyist Jorge Chamizo, who represents FPL and Progress Energy of Florida, according to phone records obtained by the Herald/Times.

Edgar said she knew nothing of any phone calls by Rudd to the utility lobbyist.

Stewart, an engineer who worked for three years in the Office of Public Counsel representing consumers in rate cases and then spent 15 years as an expert witness in utility cases, also made a conflict of interest allegation against another PSC commissioner, Katrina McMurrian.

McMurrian agreed to serve on a utility-sponsored conference this year with FPL executives at the same time she was being asked to review their rate case — which would be the first increase for the company in 24 years.

As a member of the board of the Energy Efficiency/Smart Grid Public Advisory Group, she attended private dinners with FPL executives. McMurrian responded that she joined the group to better educate herself on the issues.

State law prohibits PSC commissioners from discussing a pending rate case with utility officials but it specifically excludes PSC staff from the ban.

A 1991 grand jury report recommended that the statute be changed to close that loophole but it was never amended.

Fasano said he will call on Senate leaders to conduct hearings into PSC behavior.

“I’m going to ask the next chairperson to conduct at least one, maybe two, hearings and ask them questions about their staff,” he said.

“Perception is everything. They better start answering some questions. They better get their act together.”