PUC fines former chairman
By Mark Brunswick
Minneapolis Star Tribune
Saturday, October 8, 2005

The state commission that oversees Minnesota's public utilities on Friday found that its former chairman violated state law and ethics rules when he solicited a job from an Oregon telecommunications firm while still sitting on the commission.

Greg Scott was fined $2,500, one-quarter of the maximum $10,000.  Some on the five-member Minnesota Public Utilities Commission (PUC) admitted that they found it difficult to sanction a former colleague.

"It's new, it's important and it's very uncomfortable," said commission chairman LeRoy Koppendrayer.

The commission also voted to begin an independent investigation into Scott's relationship with an AT&T attorney and whether it may have affected commission decisions.

Scott was nearing the end of his term on the commission last year when he resigned to become a vice president for regulatory affairs for Integra, a Portland telecommunications firm.

Integra has business and residential phone operations in the Twin Cities.

An anonymous e-mail to the commission sparked an independent investigation into whether Scott and Integra violated a Minnesota law that prohibits PUC members from working for any company subject to rate regulation for at least one year after leaving office.

On Friday, the commission agreed that Scott had violated the law, although some said the statute is ambiguous and open to interpretation.

Commission member Tom Pugh, for instance, suggested that the Legislature should clarify which industries are subject to rate regulation.  But Koppendrayer said vague statutes should provide no cover to even the appearance of a violation of the public trust.

"I think there was a deliberate intention to overlook the spirit of the law in finding employment that would benefit an individual, in this case Mr. Scott," Koppendrayer said.  "There is a responsibility for the public trust, and if there is ambiguity, we should err on the side of the public trust more importantly than personal gain."

Commission members wrestled with the $2,500 fine, acknowledging that Scott had sought legal advice about the propriety of his actions.  Commission member Kenneth Nikolai called the deliberations "unpleasant water."

Besides the state law violation, Scott, who has since left Integra, also was found to have violated several state ethics rules by engaging in the employment talks without disclosing them and by accepting reimbursement for travel to Oregon for a job interview with Integra while a commission member.

Scott's attorney, Doug Kelley, who attended the hearing, said the commission's actions did not reflect the reality of the state statutes, saying the vote was "for a law that is the way they would have wished it to be."

Integra was not sanctioned by the PUC but is expected to be billed for much of the case's costs, including $100,000 paid to an independent investigator.

New probe

The commission also voted to conduct an independent investigation into whether Scott's relationship with an AT&T attorney could have affected his decisions on cases involving the telephone giant.

The Integra investigation revealed that Scott and the lawyer, Mary Tribby, exchanged more than 100 e-mails and spent hours on the telephone with each other.  Although there has been no indication of any wrongdoing, AT&T competitor Qwest and others have filed papers suggesting that the relationship needs investigation to determine if improper conversations occurred.

Qwest, in particular, may have much to gain by the accusation.  It presented the Scott-Tribby e-mails and phone logs in support of a federal court motion filed in August to delay or rescind a $25.9 million fine the commission levied on Quest.

Scott's attorney, Kelley, argued Friday that Qwest's complaint is less about public integrity than the hope of nullifying one of the biggest fines ever to hit a utility in the state.

"What you have here is a fishing expedition with a $25 million motive," he told the commission.  Referring to reams of e-mails and other documents already examined in the case, Kelley said an additional probe is not warranted.  "You have gone through everything but his underwear drawer," he said.

But commissioner Phyllis Reha said the significant number of contacts between Tribby and Scott raises questions about their relationship.

"Where there's smoke, there isn't necessarily fire, but there is an awful lot of smoke," she said.  "If we just dismiss it today, there will always be that doubt that our process was open to the sunshine."

Mark Brunswick is at mbrunswick@startribune.com.